Banking as a Service (BaaS) platforms play an essential role in enhancing access to digital financial services by offering fintech capabilities to non-banking businesses. Many companies exploit these platforms to circumvent the need to build their own technical infrastructure and bureaucratic processes to obtain regulatory approvals necessary to provide financial services including card payments and lending.
Globally, expectations are that over the next decade, companies will continue to leverage BaaS platforms to launch new financial services, increase their revenues, and improve customer experience and retention. Increased adoption will increase the market value of BaaS $22.6 billion By 2032, supported by a CAGR of 19.3%, according to a recent report by Allied Market Research.
With BaaS becoming more ubiquitous, Egyptian fintech company Connect Money is seeking to leverage its popularity to explore emerging business opportunities outside African markets. The startup enables merchants to issue white-label debit and credit cards to their customers to access various financial services, including payments and credit.
Launched early this year, the fintech now plans to grow inside and outside Egypt, including markets like Morocco and Kenya, backed by $8 million in seed funding from a round co-led by venture capital firms DisrupTech Ventures, Algebra Ventures, and Lorax Capital Partners. . With the participation of One Stop Capital and MDP.
Connect money Participated in its founding Ayman Al-Issawi (CEO), Wadi Jalil (CTO) and Abdul Aziz Sarhan (COO), who saw the opportunity to help companies provide banking services to their customers.
“We’ve seen this at Amazon with payment services and in many other digital platforms. We believe that even brick-and-mortar businesses are able to offer banking services to their customers and increase consumer adoption, eventually becoming true banks. And that’s what we’re trying to build. A one-stop shop for brick-and-mortar businesses even You don’t have to build infrastructure or invest millions in CapEx, “They just pay a subscription service per card per month, which we then manage,” said Al-Issawi, who before founding Connect Money co-founded LuckyOne, a consumer app for credit, offers and cashback rewards. From the back end.” He is also part of the team that launched DSquares, a 12-year-old loyalty platform provider with operations in several markets, which is set to go public in Saudi Arabia “within the next two years.”
Al-Essawi said Connect Money has many use cases in different areas, including agriculture, where supply chain companies can, for example, provide white-label cards and become banks for farmers.
“Basically, the whole value proposition is to connect those companies with cash users. So we’re talking about blended finance as the core market,” he said.
Overall, Al-Issawi said, businesses can leverage the platform, especially those with long and expensive settlement cycles, to make instant payments and disbursements. Businesses can also embed loyalty programs into cards as lenders exploit technology to digitize their operations and provide credit. Al-Essawi said their clients get these capabilities at a fraction of the cost and without long waiting periods to obtain licenses from regulatory authorities to provide financial services.
Connect Money corporate support includes card issuance, know your customer, customer support and mobile banking app development.
The startup joins a handful of fintech companies in the emerging BaaS space in Africa, including Anchor, Maplerad and Bloc in Nigeria, which are making financial services more accessible to the masses by enabling companies to offer tailored financial services to their customers.