Banking-as-a-service (BaaS) platforms have become instrumental in promoting access to digital financial services by introducing fintech capabilities to non-banking businesses. Many businesses leverage these platforms to bypass the need to build their own technology infrastructure and the bureaucratic processes of obtaining the necessary regulatory approvals to offer financial services, including card payments and lending.
Globally, forecasts show that businesses will continue to leverage BaaS platforms over the next decade to launch new financial services, grow revenue, and improve customer experience and retention. Increased adoption will drive the market value of BaaS $22.6 billion by 2032, at a compound annual growth rate (CAGR) of 19.3%, according to a recent report by Allied Market Research.
As BaaS becomes ubiquitous, Egyptian fintech Connect Money is set to leverage its popularity to explore emerging business opportunities from African markets. The startup allows commercial companies to issue blank debit and credit cards to their customers to access various financial services, including payments and credit.
Launched earlier this year, the fintech is now planning expansion in and outside of Egypt, including markets such as Morocco and Kenya, backed by $8 million in funding from a round co-led by VCs DisrupTech Ventures, Algebra Ventures and Egypt-based Lorax Capital Partners. , with participation from One Stop Capital and MDP.
Connect the money co-founded by Ayman Essawy (CEO), Wadi Jalil (CTO) and Abdelaziz Sarhan (COO), who saw an opportunity to help businesses bank their customers.
“We’ve seen this at Amazon with its payment services and many other digital platforms. We believe that even traditional businesses are able to bank to their customers and increase consumer loyalty, to eventually become real banks. This is what we are trying to build. a one-stop shop for traditional and digital businesses so they don’t have to build the infrastructure or invest millions in CapEx. They just pay a subscription service per card per month, which we then manage from the back-end,” said Essawy, who before founding Connect Money co-founded LuckyOne, a consumer app for credit, offers and cash back rewards. He is also part of the team that launched DSquares, a 12-year-old loyalty platform provider active in various markets and set to list in Saudi Arabia “within the next two years”.
Essawy said Connect Money has many use cases in various spaces, including agriculture, where, for example, supply chain companies can provide white cards and become banks for farmers.
“Fundamentally, the whole value proposition is about connecting these businesses with cash users. So we are talking about embedded finance as a core market,” he said.
In general, Essawy said, the platform can be leveraged by businesses, especially those with long and costly settlement cycles, to make instant payments and disbursements. Companies can also build rewards programs into cards as lenders use technology to digitize their operations and provide credit. Essawy said their customers get these capabilities at a fraction of the cost and without long waiting periods to obtain licenses from regulatory authorities to offer the financial services.
Connect Money’s business support includes card issuance, KYC, customer support and mobile banking application development.
The startup joins a handful of fintechs in the nascent BaaS space in Africa, including Nigeria’s Anchor, Maplerad and Bloc, which are making financial services easily accessible to the masses, enabling businesses to provide personalized financial services to their consumers.
