A Ghanain fintech company, Dash, has raised a whopping $32.8 million seed capital to build a wallet for Africans to eliminate the interoperability problem of mobile money transactions between two countries.
Founder and CEO Prince Boakye Boampong who started the company in 2019, noted that global financial transactions are facilitated mainly by payment processors such as Visa or Mastercard. He indicated that the payment processors are responsible for communication between banks and fintechs to settle transactions for consumers and businesses swiftly. However, he stated that Africa has it different.
“It’s [Africa] not a predominantly card continent. Telecoms and banks lead the majority of online financial transactions carried out in the region via mobile money wallets and bank accounts. But here’s the challenge; while both systems tend to work well when users make transactions within their unique environment, there’s no interoperability for transactions between them.”Prince Boakye Boampong
An alternative payment network with connected wallets allowing a mobile money user to transact with a bank account would fix this problem. The CEO indicated that it is against this background that Dash was innovated.
Mr Boakye Boampong stated that the pace at which Dash managed to quadruple the size of its initial investment in the space of five months is intriguing. As such, he intimated that the $32 million is an incredibly large seed that could boost the operation of the three-year-old company.
“For most products, it’s either you are figuring stuff out, or you figured it out. We were kind of caught off guard with the crazy growth in a very weird way. We didn’t prepare for the growth, so when it happened, we raised more money to meet that demand and we believe it can only get better with this new seed.”Prince Boakye Boampong
How Boampong Came out with the Idea of Dash
The CEO asserted that two years before forming the company, he travelled to Kenya and was fascinated by how unbanked Kenyans send and receive money while paying bills with mobile money- a system of payments pioneered by Safaricom’s M-Pesa, which has close to 30 million customers. However, he said “having coming from a mobile money background myself, being a Ghanaian, I experienced how interoperability posed a challenge within and outside mobile money systems”.
“I was blown away by the ubiquity and convenience of mobile money in 2014 when I visited Kenya for the first time. However, there are over 200 mobile money wallets and 100 banks across the continent that [do] not work with each other. Here’s what that means, a Kenyan who uses M-Pesa and travels to Ghana finds it difficult to send money to a Ghanaian who uses MTN Ghana because both mobile money operators don’t permit transactions between each other.”Prince Boakye Boampong
Similarly, the CEO noted that a Nigerian or South African with a bank account cannot make transactions with an M-Pesa mobile money account or an MTN Ghana account due to the difference in payment ecosystems. “Thus, when they travel, they’d need to swap currencies or get necessary bank or mobile money accounts that work outside their home countries”.
Mr Boakye Boampong averred that Dash’s alternative payment network brings together this mobile money and traditional banks and facilitates transactions for consumers and businesses. He added that it doesn’t aim to replace mobile money or banks, but instead, its wallet allows users to access a plethora of services they can’t find on their traditional provider.
“We’re building this interoperability so a Kenyan traveling to Ghana or Ghanaian travelling to Kenya would be able to pay for stuff without having to change currencies or setting up accounts when they touch ground. We’re taking a page from AliPay and PayTm by building features that will make the lives of our users easier without having to switch from different providers.”Prince Boakye Boampong
Meanwhile, Dash’s playbook is similar to Visa or Mastercard, routing payments through banks and telcos regardless of who issued it. The CEO averred that users from different countries such as: Ghana, Nigeria and Kenya, for now can connect their bank or mobile money accounts to Dash and pay bills, send and receive money to other users, while the platform handles currency conversions.
Mr. Boampong indicated that the funding will help the Techstars-backed company expand to new markets such as: Tanzania and South Africa to get the licenses needed to operate there, and build out its team, invest in technology and launch new features.