One of Africa’s largest payments processors, Flutterwave, is acquiring API-driven fintech Mono, a move that could reshape how lenders assess creditworthiness in the absence of standardized credit scores.
Mono has made a splash since it was founded five years ago, and its APIs connect a significant portion of Nigeria’s digital banking system. For its part, Flutterwave facilitates domestic and cross-border payments across more than 30 African countries. The acquisition will expand both the reach and the breadth of services offered by the two companies.
This open-banking-based partnership could have particularly meaningful implications in Africa, where consumers lack standardized credit scores. The limited scope of many credit bureaus in these markets means lenders are often forced to rely on banks’ transaction histories to evaluate creditworthiness.
A Critical Juncture
The combined infrastructure of Flutterwave and Mono could improve access to borrowers’ banking data at a critical juncture. According to Mono’s CEO Abdulhamid Hassan, Africa is undergoing a transitional period in which regulators are increasingly promoting lending initiatives that will drive financial inclusion.
These inclusion efforts not only create new opportunities for consumers, but also unlock significant potential for banks and businesses. Research from Galileo found that roughly half of global financial leaders surveyed reported their organizations had lost 10% or more in potential business due to absence of truly inclusive technology.
The Inevitable Adoption
Open banking technology—especially APIs offered by third-party providers—is at the heart of this transformation. Due to the eclectic financial infrastructures across the world, open banking has gained traction at varying rates.
However, the flexibility, security, and inclusion benefits of open banking make its widespread adoption inevitable.
“The idea of having open access via APIs to data and to accounts—that’s not going to go away,” James Wester, Co-Head of Payments at Javelin Strategy & Research told PaymentsJournal. “It may change based upon the way regulations are crafted and the way the market develops, but at its core, that open-banking paradigm where you and I have access to our bank account and to the data—that’s going to continue. Customers want that, small business customers want it, and commercial clients want it.”
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