Banking-as-a-Service (BaaS) platforms are crucial in expanding access to digital financial services by bringing fintech capabilities to non-bank businesses. These businesses are leveraging BaaS platforms to avoid building their own tech infrastructure and navigating the bureaucratic process of acquiring regulatory approvals necessary to offer financial services like card payments and lending.
Projections indicate that over the next decade, businesses worldwide will continue using BaaS platforms to launch new financial services, increase revenues, and enhance customer experience and retention. This growing adoption is expected to drive the BaaS market value to $22.6 billion by 2032, with a compound annual growth rate (CAGR) of 19.3%, according to a recent Allied Market Research report.
Egyptian fintech Connect Money is capitalizing on the rising popularity of BaaS to explore emerging business opportunities in African markets. The startup enables trade companies to issue white-label debit and credit cards, providing customers access to various financial services, including payments and credit.
Launched earlier this year, Connect Money is now planning growth within and outside Egypt, targeting markets such as Morocco and Kenya. This expansion is supported by $8 million in seed funding from a round co-led by Egypt-based VCs DisrupTech Ventures, Algebra Ventures, and Lorax Capital Partners, with participation from One Stop Capital and MDP.
Connect Money was co-founded by Ayman Essawy (CEO), Wadi Jalil (CTO), and Abdelaziz Sarhan (COO), who identified an opportunity to help businesses bank their customers.
“We have seen this in Amazon with their payment services and in many other digital platforms. We believe even traditional businesses can bank their customers, increasing consumer stickiness and potentially becoming real banks. Our goal is to build a one-stop shop for both traditional and digital businesses so they don’t have to invest in infrastructure or CapEx. They just pay a subscription fee per card per month, which we manage from the back-end,” said Essawy. Before founding Connect Money, Essawy co-founded LuckyOne, a consumer app for credit, offers, and cashback rewards. He was also part of the team that launched DSquares, a loyalty platform provider operating across several markets, set to IPO in Saudi Arabia within the next few years.
Essawy highlighted that Connect Money has many use cases across various industries, including agriculture, where supply chain companies can provide white-label cards and act as banks for farmers.
“The core value proposition is connecting businesses to cash users. We are focusing on embedded finance as the primary market,” he said.
Essawy noted that the platform could be especially beneficial for businesses with long and costly settlement cycles, allowing them to make instant payments and disbursements. Companies can also integrate loyalty programs into the cards, while lenders can use the technology to digitize their operations and offer credit. Connect Money’s clients can access these capabilities at a fraction of the cost and without the long wait times associated with acquiring regulatory licenses.
Connect Money’s services to businesses include card issuance, KYC, customer support, and mobile banking app development.
The startup joins a growing number of fintechs in Africa’s nascent BaaS space, including Nigeria’s Anchor, Maplerad, and Bloc, which are making financial services more accessible by enabling businesses to offer tailored financial services to their customers.
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