BD Insider, Letter 132: Glo launches MoneyMaster PSB

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BD Insider, Letter 132 covers:

  • the launch of Globacom payment service bank, MoneyMaster in Nigeria
  • a $570 million hack on Binance-linked blockchain
  • how Google is delivering on its $1 billion commitment in Africa

and other noteworthy information like:

  • the latest African Tech Startup Deals
  • BD Trivia: The Bitcoin search
  • opportunities, interesting reads and more.

The Big Three!

#1. Globacom's payment service bank, MoneyMaster is now live in Nigeria

The News: Two years after securing a Payment Service Bank (PSB) license from the Central Bank of Nigeria (CBN), Globacom has officially launched its PSB, MoneyMaster.

In 2020, the company poached about 20 top employees of M-Pesa— Safaricom’s mobile money subsidiary—to assist in the development of its PSB.

Why it matters: With 133.5 million bank accounts in Nigeria as of December 2021 according to the Nigeria Inter-Bank Settlement System (NIBSS) and with only 54 million BVNs registered as of April 10, 2022, MoneyMaster will join competitors like MTN's MoMo and Airtel's SmartCash in the mobile money market to bank about 79 million unbanked Nigerians.

How it works: Like every other Nigerian PSB, MoneyMaster will:

  • facilitate payment and remittance services within Nigeria
  • accept deposits from individuals and small businesses
  • issue debit and prepaid cards
  • operate electronic wallets and inbound remittances
  • invest in interest-bearing FGN and CBN securities and offer saving products

Despite the possibilities, the PSB license comes with significant restrictions. According to the regulations, MoneyMaster PSB cannot:

  • directly provide loans or advances
  • underwrite insurance
  • accept and hold foreign currency deposits
  • engage in foreign exchange transactions except for inbound remittances
  • accept alternative means of value like airtime as a means of payment.
The unique selling point of PSBs

‌In addition to these limitations, 25% of physical activity must take place in rural areas with a high unbanked population as defined by the CBN. To create an account, customers can dial *995# and then follow the prompts from a Glo line or any other telecommunications network as MoneyMaster PSB is network agnostic.

About Globacom: Founded in 2003, Globacom is a Nigerian multinational company. A September 2022 report by Nigerian Communications Commission (NCC) indicated that more new phone subscribers settled with Globacom in the month of July.

According to the report, Globacom added over 2 million new customers in July taking its subscriber base to 58,330,200 from 56,226,479 the previous month. This represents 83% of the total 2,523,276 new phone users recorded in the country in July.

Deep dive on how PSBs enhance financial inclusion

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#2. A Binance-linked blockchain hit by $570 million crypto theft

The News: Last week, Binance, the world's biggest cryptocurrency exchange confirmed that assets were stolen from the Binance Smart Chain network.

Why it matters:  Following the incident, Binance temporarily suspended its blockchain network, BNB Smart Chain, "due to irregular activity," the company tweeted Thursday. According to the company, the hackers had stolen two million BNB cryptocurrency tokens—which are issued by Binance—worth about $570 million at the time.

Binance CEO, Changpeng Zhao initially tweeted that an estimated $100 million worth of crypto had been stolen. "Your funds are safe," Zhao tweeted last Thursday.

The company said $100 million worth of tokens remain “unrecovered” and were moved off-chain by the hacker. The remaining funds have been frozen on the BNB Chain. In order "to stop the incident from spreading," the BNB blockchain was reportedly offline for about nine hours. In a statement, Binance said it was "able to minimize the loss".

💡
Cross-chain bridges are designed to solve the challenge of interoperability between different blockchains. A cross-chain bridge is a protocol that lets a user port digital assets from one blockchain to another.

What else?: "Software code is never bug-free," Zhao, said in an interview with CNBC. He emphasized that no users had lost money in the hack but said that so-called cross-chain bridges were particularly vulnerable to hacks and the industry needed to get better at learning from them.

"I just checked my account, my funds are there," an anonymous user told Benjamindada.com on Saturday (October 8, 2022).

Zoom out: Vulnerabilities in cross-chain bridge protocols emerge as a top security risk, according to Chainalysis. In August 2022, the blockchain research company estimated that $2 billion worth of cryptocurrency had been stolen in 13 cross-chain bridge attacks, mostly in 2022.

Vitalik Buterin, co-founder of the Ethereum network — and the second-most-popular cryptocurrency, Ether—is one of the vocal critics of cross-chain bridges, noting that they have "fundamental security limits."

#3. Google spends 20% of its $1 billion fund on African innovation

The News: One year after Google announced its five-year plan for African projects worth $1 billion Naira, the big tech company revealed that it has already spent about 20% of the budget—which includes the launching of its first African cloud region in South Africa.

What else?: During the 2022 Google for Africa event last week, Nitin Gajria Google's Sub-Saharan Africa, Managing Director said that the company has spent a $1.5 million investment in Career Certifications this year bringing the total Google.org funding to more than $3 million since 2021.

Google also supported the expansion of AirQo's work on monitoring air quality from Kampala to ten cities in five countries on the continent. Aside from the aforementioned, the company has continued to support African entrepreneurs through the Google Black Founders Fund,  Hustle Academy and Google Business Profiles.

With its $50 million Africa Investment Fund which targets equity investments in tech startups, Google has invested in three businesses over the past 9 months— SafeBoda, a transportation app in Uganda and Nigeria, Carry1st, a South African mobile gaming startup and Lori Systems, an e-logistics company based in Kenya.

Other milestones include: the subsea cable, Equiano, now running through Togo, Nigeria, Namibia and South Africa, which is expected to deliver faster, lower-cost internet to the continent.

Moving forward: A recent economic impact assessment conducted by Africa Practice and Genesis Analytics found that by 2025, the cable is set to accelerate economic growth with the GDPs of Nigeria rising by $10.1 billion, South Africa by $7 billion and  $260 million in Namibia.

During the same time, Equiano should indirectly create 1.6 million jobs in Nigeria, 180,000 in South Africa and 21,000 in Namibia, driven by the expansion of the digital economy and peripheral sectors.

🧩 BD Trivia

Which crypto bro/sis will be the first to get the Bitcoin?

💰 BD Africa Funding Tracker

In African startup funding deals, Talk360's additional $3 million seed was the highest amount that was the highest amount raised last week. The startups jointly raised $9.11 million.

Get free access to our carefully-curated, real-time updated Funding Database for 2022.

📚 Noteworthy

Here are other important stories in the media:

💼 Opportunities

Jobs

Every week, we carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth.

Product & Design:

Data & Engineering

Admin & Growth

Other opportunities:

  • For Ghanaian startups: Applications for the next cohort of the UNICEF StartUp Lab is open. The accelerator programme supports impactful tech-driven startups in Ghana working to advance the SDGs for children and young people. Up to GHS25,000 in prototyping, funding is available for each participating startup.
  • For cleantech startup founders: Apply for the AWS Sustainable Cities Accelerator. Applications are due by October 21, 2022
  • For Nigerian final-year undergraduates and graduates: Bloomberg will be coming to Nigeria for its Africa Campus Recruiting. The recruitment process requires one to complete a HackerRank upon application submission.
  • For content creators: Apply for the World Nomads Content Creator Scholarship and stand a chance to win 1-of-4 scholarship worth over $5,000

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