Sparco Payments Infrastructure

Over 60% of Africa's adult population do not have bank accounts and/or lack access to the internet. However, the majority have mobile phones that have active mobile money wallets. Additionally, for those with bank accounts, most African central bank have banned cross-border payments. For  For this reason, it's very hard for Africans to do business on a global scale. Countries like Tanzania and Kenya face challenges with country-exclusive mobile money services, preventing seamless transactions across borders.

Nigeria ranks 131st in the World Bank's Ease of Doing Business Report (https://cseaafrica.org/nigeria...), indicating the difficulty that Nigerian business owners face. Cross-border payments are one of the major challenges facing businesses in Nigeria. Nigerian merchants cannot transact seamlessly with merchants in other neighbouring countries due to cross-border payment regulations.

While it is difficult to provide an exact number of people affected, the potential impact of addressing this problem is substantial, given that Africa's e-payment industry generated approximately $24 billion in revenues in 2020, with revenues expected to reach $40 billion by 2025. The rapid shift to e-payments is likely to accelerate, with 84% of payment experts expecting e-payments to grow by at least 20% per year through 2025 (https://www.mckinsey.com/industries/financial-services/our-insights/the-future-of-payments-in-africa).

Sparco's solution is a digital payment platform designed to empower African businesses by enabling them to make and accept payments from anywhere in the world. It addresses the challenges of limited financial inclusion and transactional barriers faced by African merchants, particularly in cross-border payments and accessibility for marginalized segments of society. 

In simple terms, our solution works as follows:

Payment infrastructure: We provide a robust payment infrastructure that allows businesses to transact online with ease. Merchants can register via a portal, receive API and keys for integration with their websites, and accept payments through various channels, including mobile money, cards, and bank transfers.

Cross-border transactions: We partner with service providers and banks in countries like Nigeria to enable African businesses to transact seamlessly with international clients, overcoming central bank restrictions and other limitations.

 Mobile money integration: By partnering with mobile money service providers, we allow African businesses to transact using mobile money with businesses outside of Africa, overcoming the limitations posed by country-exclusive mobile money systems.

 USSD and SMS integration: To ensure financial inclusion for all, including those without access to the internet or smartphones, we are integrating USSD and SMS services into our platform. This enables individuals with feature phones to participate in e-commerce and m-commerce activities, bridging the digital divide.

 Our solution leverages technology such as APIs, mobile money services, USSD, and SMS to provide an accessible, user-friendly, and secure platform for conducting transactions. Through this innovative approach, Sparco empowers African merchants to overcome transactional challenges, expand their reach, and thrive in the global market.

Below is a demo of an application that we made using our infrastructure for Nigerian businesses to make payments to anywhere:

https://youtu.be/jfDZkUdfzXI

Sparco's target population consists of African merchants and businesses, as well as marginalized segments of society who face challenges in conducting seamless transactions with local and international customers. These individuals and businesses are often underserved due to limited financial inclusion, restrictive cross-border payment regulations, country-exclusive mobile money services, and a lack of accessible payment solutions for those without access to the internet or smartphones.

 African merchants, particularly in countries like Nigeria, Tanzania, and Kenya, face difficulties in conducting cross-border transactions due to central bank restrictions and the limitations of country-exclusive mobile money services. These challenges hinder the growth of businesses and limit their ability to participate in the global market.

 Marginalized segments of society, including those without access to the internet or smartphones, are often excluded from the growing digital economy. These individuals are unable to access essential financial services and participate in e-commerce and m-commerce activities, which further exacerbates the digital divide and economic inequality.

 Sparco's solution addresses the needs of the target population in the following ways:

 Seamless cross-border transactions: By partnering with service providers and banks, Sparco enables African businesses to transact seamlessly with international clients, overcoming central bank restrictions and other limitations in cross-border payments.

 Mobile money integration: Our partnerships with mobile money service providers allow African businesses to transact using mobile money with businesses outside of Africa, overcoming the limitations posed by country-exclusive mobile money systems.

 Financial inclusion for marginalized segments: By integrating USSD and SMS services into our platform, we ensure that individuals without access to the internet or smartphones can participate in e-commerce and m-commerce activities, bridging the digital divide and promoting financial inclusion for all.

 In summary, Sparco's solution directly and meaningfully improves the lives of African merchants and businesses, as well as marginalized segments of society, by addressing the challenges they face in conducting seamless transactions and accessing essential financial services. By providing innovative and accessible payment solutions, Sparco empowers these individuals and businesses to thrive in the global market and fosters a more inclusive financial landscape across the continent.

We are the right people to design the solution because we have experienced the problem first-hand. I, the Team Lead live in Zambia. I travel a lot between African countries and yet it's almost impossible to transact as I travel or to receive money from back home. As I travel, I interact with different communities and understand that this is a common problem for many Africans. In 2020, we developed a platform for a Fintech in Zambia which was funded by an Italian donor (IFAD) to allow rural farmers to make payments. During this project, we interacted with farmers in rural areas and understood their challenges. We are developing the solutions using Human Centred Methods while we engage the affected communities. 

Currently, we have onboarded over 1,300 businesses in Zambia and Nigeria and these businesses serve over one million users.

We are applying to Solve because we need mentorship and access networks of global market players such as other fintechs, telecommunication companies and banks. We feel Solve can help us get in the same room as these players and start the conversations.

Our solution is promoting inter-operability between mobile money wallets and bank accounts globally. We are also allowing cross-currency transactions via SMS. This is something that has not been done before. Also, since the platform is  infrastructure based, we are allowing other players to integrate with us and expand the solution to more financially excluded communities.

1. The next year:

We would like to see more than 10 million Africans be able to  use our platform to accept payments from anywhere and therefore be able to expand their businesses to different geographies.

2. The next five years:

We would like to have connected over 400 million mobile money wallets which account for over 75% of Africa's mobile money wallets. This means that we shall be powering cross-border payments for over 400 million subscribers, most of whom do not own smart phones. This will consequently reduce the levels of poverty as most underprivileged communities will have access to financial infrastructure that will allow them to transfer money and invest.

We shall measure by monitoring :

-  the number of rural people transacting using our tools

- the number of individuals that have invested using our tools. This shall be collected from our transaction database.

- the number of individuals whose lives have improved due to access to financial services. This will be achieved through survey tools.

Sparco's solution is expected to have a significant impact on the problem of limited financial inclusion and transactional challenges faced by African merchants, particularly in cross-border payments and accessibility for marginalized segments of society. Our theory of change can be summarized as follows:

Activities: We provide a digital payment platform, partner with service providers and banks, integrate mobile money services, and incorporate USSD and SMS services for financial inclusion.

Immediate Outputs: These activities result in a user-friendly and secure payment platform that enables seamless transactions, empowers African businesses to transact internationally, and ensures accessibility for marginalized segments without access to the internet or smartphones.

Longer-term Outcomes: The outputs lead to improved financial inclusion, increased business growth, and a more inclusive financial landscape that benefits the target population by promoting economic growth and reducing economic inequality.

Our theory of change is supported by evidence, such as:

Third-party research: McKinsey's report on Africa's e-payment industry indicates a significant market opportunity, with revenues expected to reach $40 billion by 2025 and e-payments expected to grow by at least 20% per year through 2025.

Findings from impact evaluations: The World Bank's Ease of Doing Business Report highlights the challenges faced by African businesses, particularly in Nigeria, which ranks 131st in the report, emphasizing the need for seamless cross-border transaction solutions.

Data from interviews with the target population: Conversations with African merchants and businesses reveal the difficulties they face in conducting cross-border transactions and accessing essential financial services, further supporting the need for our solution.

In conclusion, Sparco's solution is expected to have a considerable impact on the problem by providing a digital payment platform that addresses the challenges faced by the target population. Our theory of change establishes logical links between our activities, immediate outputs, and longer-term outcomes for the target population, and is supported by evidence from third-party research, impact evaluations, and data from interviews with the target population. By implementing our solution, we aim to foster a more inclusive financial landscape and promote economic growth across the continent.

We are building our payment infrastructure using blockchain, USSD and SMS technologies. 

On the management team, we have 2 males and 2 females in executive roles and are all of African decent. One of the females identifies as lesbian in a country where same-sex relationships are considered illegal. 

We generate revenue by charging low transaction fees. We are able to sustain our business because we conduct many transactions serving many customers. The wallets that are integrated to our APIs allow users to transfer money globally and we charge fees on transactions and currency conversion. Our customers need our services as they need to make and receive payments when they export or import goods.

We plan to raise capital from Venture Capital investors.

So far, we are we profitable and have been able to fund our operations ourselves. As we scale, we have decided to start talking to investors.