A few years back, executing cross-border payments was a cumbersome task, particularly in Africa. The interconnected challenges of segmented systems, excessive fees, and inadequate infrastructure hinder swift and affordable financial transactions for both individuals and businesses.
Many still depend on antiquated agent networks or struggle with mobile wallet integrations. However, there’s a significant demand for more cost-effective and user-friendly solutions, especially in neglected areas like Francophone Africa.
The fintech firm Cauridor, based in Guinea, aims to tackle this issue and has successfully secured $3.5 million in seed funding to enhance its payment infrastructure, allowing merchants, banks, telecom firms, and money transfer services to facilitate transactions in and out of Africa.
Cauridor’s platform allows for mobile wallet transactions, bank transfers, and cash pickups via a network of over 25,000 agents across Guinea, Senegal, Ivory Coast, Sierra Leone, and Liberia. These agents, often small business owners with point-of-sale (POS) systems, provide essential services like cash deposits, withdrawals, and bill payments.
By utilizing a hybrid strategy, Cauridor addresses the money transfer challenges, similar to how other fintech companies in the area blend cash networks with digital solutions for local payment necessities. This tactic has enabled the firm to operate remittance corridors to crucial markets such as Ghana and Nigeria and form group-level agreements with industry giants including Ria, MoneyGram, and Western Union, as well as collaborations with Orange and MTN.
Transitioning from remittance to B2B payments
The founders of Cauridor, Oumar Rafiou Barry and Abdoulaye Bah, personally experienced the difficulties of sending money back to Guinea while studying in Canada. They encountered slow and costly remittance services in Francophone Africa, a region that has been largely neglected by the global remittance industry.
In 2019, this frustration led them to launch BNB CashApp, a consumer-friendly remittance platform enabling users in Canada to transfer funds to Africa. The application integrated directly with banks and mobile wallets, like MTN, along with an agent network equipped with a mobile portal for cash payouts.
However, as the platform expanded, the founders faced a more significant hurdle: the fragmented and inefficient payment systems in Africa. “We quickly recognized that the payment infrastructure in Francophone Africa was nearly nonexistent. We had to take the initiative and begin establishing payment systems in the region due to the fragmentation of services,” CEO Barry told TechCrunch.
Realizing the potential, the team shifted focus in 2022 to construct payment corridors for the region. By 2023, they consolidated their consumer remittance service and B2B payment infrastructure under the Cauridor brand, emulating the operational blueprint of Tanzania’s Nala and Rafiki.
This change proved fruitful: over 90% of the company’s income now derives from its payment infrastructure. In 2023, Cauridor handled 2 million transactions and registered a total payment volume (TPV) of $300 million, which is projected to rise to $500 million in 2024, according to the company.
Competitive Landscape and Future Prospects
While Barry acknowledges more established players like Onafriq (previously MFS Africa) and Thunes as Cauridor’s primary competitors, he believes his company has maintained its relevance by establishing payment infrastructures in overlooked markets like Guinea and Liberia.
He highlighted that their proactive customer service and competitive pricing have contributed to customer retention. The fintech provides support to resolve common challenges, such as rejected mobile money transactions caused by incomplete KYC processes. For instance, if a recipient can only access $10 of a $700 transaction, Cauridor intervenes to help upgrade the account and ensure the transaction is successful.
Barry believes that Cauridor’s strong regional presence allows it to secure more favorable forex margins, which are then passed on to clients. This advantage has attracted major customers like MoneyGram, which switched from rivals to benefit from Cauridor’s rates and enhanced support.
Interestingly, competition in the cross-border payments scene doesn’t eliminate the possibility of collaboration. Some of Cauridor’s competitors depend on its infrastructure in particular areas, and Cauridor partners with companies like Thunes to extend its global reach.
Cauridor employs around 200 individuals worldwide and has offices located in Ivory Coast, Senegal, Guinea, Sierra Leone, and Liberia.
The recent seed funding round was spearheaded by Pan-African venture capital firm Oui Capital, with contributions from Rally Cap, BKR Capital, and various angel investors.
With this new influx of capital, the company aims to branch out into additional markets (with new offices launching in Mali and Nigeria this year), enhance its workforce, and intensify marketing efforts. Barry mentioned to TechCrunch that Cauridor is gearing up for a Series A funding round and is investigating blockchain integration to streamline settlements while tapping into the increasing adoption of stablecoins for cross-border transactions in Africa.
Compiled by Techarena.au.
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