The trade relationship between Africa and Asia is on the rise. In the first quarter of 2021, Africa-China trade jumped 27%, to $52.1 billion compared with 2020. However, such transactions come with a huge cost, as sending and receiving money can be as high as 20 per cent. Notwithstanding the time it takes for payment to be processed.
Wapi Pay, a fintech startup that claims it can process payments within a day and reduce transaction charges as low as 3%, has closed a $2.2 million pre-seed round.
Wapi Pay bypasses traditional payment networks, optimizing efficiency and cost for our customers. Users choose the delivery channels they want, such as bank to bank, wallet to wallet, bank to wallet and wallet to bank options to transfer funds as well as make merchant payments, with settlement done within 24 hours.” CEO Eddie Ndichu
Founded in 2019 by brothers Paul Ndichu and Eddie Ndichu, Wapi Pay provides a payments gateway for African businesses to receive and send money from Asia via mobile money platforms and bank accounts. The Kenyan startup has offices in China and Singapore and currently works with local banks and platforms in China, Indonesia, India, Japan, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam.
“We started Wapi Pay having seen how fragmented the payment infrastructure is and how horrifying the experience and expense of making or receiving a payment to and from Asia,” Paul Ndichu said in an interview with TechCrunch.
“We spent some time in Asia, given the growing trade relationship between the two corridors [Africa and Asia], and saw the growing need to make this more efficient, faster and cheaper, evolving from remittances to global payments. These transactions are already complex in nature; how do we make them as simple and easy as mobile money?” he added.
The round is one of the largest of its kind in East Africa and the continent. The venture firms that took part include China-based fund MSA Capital, known to have invested in unicorns Meituan, Nubank and Klarna; Pan-African and Africa-focused firms EchoVC, Kepple Africa and Future Hub; and Pan-Asian firms Transsion Holdings and Gobi Ventures.
“Africa to Asia is a large trading corridor overlooked and underserved by tech today. We believe Wapi Pay is the best team to build the necessary infrastructure to support its growing trade volumes. We are excited to support them with our extensive China fintech network and playbook." Tim Chen, vice president at MSA Capital
Wapi Pay will use the investments to engage regulators for licensing across Africa and scale, product and geographical expansion.
According to Eddie, "These funds will help Wapi Pay diversify our products range and drive growth so that we can evolve remittances into real-time global cross-border payments, starting with Africa and Asia. All while minimising the cost of transactions, it needs to be as easy as sending M-PESA."
Kenya in focus
GDP: $98.843 billion in 2020 compared to $95,503 billion in 2019
Population: 53,771,300 in 2020 compared to 52,573,967 in 2019
GDP per capita: $1,838 in 2020 compared to $1,816 in 2019
Inclusion Times Newsletter
Join the newsletter to receive the latest updates in your inbox.