Africa’s financial systems are far ahead of United States of America – says John Chaplin

He disclosed this while speaking with the Business Insider Sub-Saharan Africa at the sideline of the Interswitch Connect's Digital/Tech Payment Conference 2017 in Lagos.

Mr Chaplin said the best tech payment systems are in Asia, followed by Europe and then Africa.

John Chaplin is a professional with over 25 years’ experience in the payments and fintech industries. At present, he leads the Global Payments Innovation Jury which comprises of 50 global payments and fintech CEOs.

Prior to Payments Innovation Jury, John spent 17 years at Visa culminating his career as Executive Vice President.

With your experience with Africa Payments Innovation Jury, how do you see tech ecosystem of Nigeria compared with peer in Africa?

I still think there is a lot of change needed here, though the system is developing, there is still a long way to go. I wouldn’t like to compare Nigeria to others - Nairobi or Johannesburg. But I think what is important is that we got a number of areas that the ecosystem is working better.

Also, there is a need to better funding of startups, greater access to skills and greater support for startups especially non-banks.

What is the role of Africa Payments Innovation Jury, the scope of activities and how it is driving the growth of fintech innovations in Africa?

The innovation jury is a not-for-profit organization whose role is to collect the opinion of best people in payment industry. Also to analyse them and present them back so that people that are in big company trying to up their game or startup and new business understands can access the experience and brainpower of those guys that have already done it before.

So, the jury is trying to raise the bar for everybody and if everybody does better then the whole industry grows.

What future do you foresee for cashless technology in Africa?

The best technology payment systems are in Asia, China in particular. Second is Europe and Africa are very close behind Europe and it is ahead of the United States of America. When I explain this to people that the Jury thinks Africa is ahead of US, a lot of people say whoa!, with the Silicon Valley and all of the money there.

And the answer is so because the payments systems in the U.S is being very slow to change and got a lot of old-fashion networks. But here in Africa mobile is what it is all about. There is a need to things to capture the large unbanked population, so there is a great necessity to do.

And then not being held back by systems of fifty years ago is a great potential, but we have to overcome the problems like funding.

Is funding the major constraints to the development of fintech in Africa?

It is one of them, as funding is not the only major issues. There are skills shortages as well. We at the jury looked at the where is the major skills shortages, and the answer is in the strategy and product development areas. Maybe the entrepreneur, himself, has a great idea then he needs a team to work with him and he finds it quite difficult to recruit all manpower needed.

So I will like to more training in education around these areas.

What is your view on cybercrime and it being a threat to fintech and payment industry development in Africa?

We can’t underestimate the impact of cybercrime, and it is just here in Africa as you said it is global. And cybercrime is coming for a single reason, the bad guys these days don’t bother to rob banks as they just do it electronically through the internet. So every country in the world got a feel of cybercrime.

Cybercrime can lower people’s desire to adopt electronic payment products. But I must say that having been coming to Nigeria for many years, my view is that many of the systems here in Nigeria have more security against cybercrime than some of the systems in the U.S.A. For example, the card systems here in Nigeria is more secure than that in the U.S.A.

Are you saying Nigeria’s system can effectively curtail cybercrime incidence more?

Yes, but and it is a big ‘but’. Everybody has to focus on eliminating cybercrime and reducing it. So it is a continuous battle with the bad guys but the solution is genuinely technology and you have to keep investing in technology. As you can never it (cybercrime) but get it down to a certain level. As they move on, then you move on with better systems.

This is an area, am afraid, you going to continually invest and invest.

What are the major challenges curtailing tech startups, especially fintech, from scaling their business in Africa?

In the jury report which we just published, the jury members identified two top reasons why tech startups fail. The first one is that the business model doesn’t scale. So people build businesses and just discover that it doesn’t work, and not for technical reasons for a business model reason. So finding a scalable business model is the best thing.

The second reason is that there is not enough funding. And this reason for that is simply as it takes a long time for startups to scale particularly in the payment area. Maybe the funding would have been enough if the business model is scalable. So, those are the top two reasons tech startups fail in Africa.

Africa’s financial systems are far ahead of United States of America – says John Chaplin

Mr John Chaplin says the electronic financial payment structure in Africa is far ahead of that in the United States of America.

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