[TL;DR]
- In Nigeria, a USSD transfer on a feature phone costs 10 naira and takes 12 seconds, whereas a crypto app transfer costs 183 naira over four minutes—18x more expensive—and with 89% of users still on feature phones or low-end Androids, an app-first strategy can’t even enter the market.
- Firms that dominate the invisible B2B infrastructure layer—MFS Africa connecting 500+ mobile money systems across 37 countries, Gluwa building on-chain credit history rails, and WaaS providers offering key-management APIs—will ultimately govern the market.
- Protocols being tested in Africa—USSD-blockchain bridges, behavior-data credit scoring, and cross-border on-chain credit histories—are not just local fixes; they are early drafts of global standards for 4 billion people in resource-constrained countries like India, Pakistan, and Indonesia.
1. Why Your Service Fails: Broken Assumptions
1.1 Money Moves Without Smartphones
In Nigeria, the fastest way to send money isn’t an app. On a button phone, dial *966# and press call. A menu appears. Enter a few numbers and the transfer is done—in 12 seconds. No internet, no data charges. USSD works wherever there’s a 2G signal.
Now compare that with a crypto app. You need Wi-Fi to download it, and at least a 4G signal to run it. A single transaction can consume 15MB of data. The app freezes twice while loading, and the same transfer takes four minutes. The user won’t open it again. Eighty-nine percent of Nigerian users still rely on feature phones or low-end Androids. Crypto firms burn millions building beautiful apps, but they failed to start from the user’s environment.
This isn’t about technological maturity. Local banks have delivered financial services over button phones for a decade. Zenith Bank, First Bank, and Access Bank each have their own USSD codes, and users memorize them like phone numbers. No app to install, no login required. One code handles balance checks, transfers, and bill payments.
To compete, crypto services need an infrastructure strategy, not just app-building chops. Can you design UX for low smartphone penetration and unstable internet? How will you integrate with existing telco rails? Without clear answers, even excellent tech won’t clear the market-entry bar.
1.2 The Invisible Wall: Data Costs
In Nigeria, 1GB of data costs about 500 naira. With a monthly minimum wage around 30,000 naira, 1GB equals ~1.6% of monthly income—the equivalent of someone earning ₩2,000,000 spending ₩30,000 on data, consumed in days, not a month. Downloading a crypto app, signing up, and making a few transactions can burn through that.
A USSD transfer costs 10 naira. A crypto app transaction costs ~133 naira in data, plus fees, totaling ~183 naira—18x more. It’s not just cost. With unstable connectivity, a stuck transaction triggers fear of losing money. USSD avoids that. 2G is more stable than 4G, and a USSD request either completes immediately or fails immediately—no limbo.
Succeeding in Africa means minimizing data consumption—or better, working without data. Bundle Africa once grew quickly in Nigeria but shut down in 2023. App-centric strategies couldn’t beat the cost efficiency of existing rails.
Some crypto teams now integrate USSD: a user dials a code on a button phone, the backend executes a blockchain transaction, and the result arrives via SMS. Technically complex; simple for the user. This hybrid can work, but only with coordination across telcos, local FIs, and blockchain infra. That orchestration is hard.
1.3 The Key Distribution Channel Isn’t an App Store—It’s a Dial Code
In smartphone markets, users discover apps via Google Play or the App Store. In Nigeria, reaching the app store is itself a hurdle. A Google account requires email; email requires internet. On low-end phones, Play often malfunctions.
USSD codes travel differently. Banks print codes on TV and radio ads and flyers. “Memorize *966#.” Bank agents scattered across the country teach customers and demo usage. No install—use it on the spot. This instant accessibility is USSD’s edge.
To mirror that, crypto services must rethink distribution, not just build tech. You’ll need an offline channel or partnerships with those who have one. For example, telco shops or bank agents could also teach a crypto service’s code. That’s less “marketing” and more distribution redesign.
Some players piggyback on existing USSD menus: after dialing a bank’s *966#, the user sees “crypto services” alongside transfers and balance checks. No new codes to memorize; a familiar interface introduces a new service—lowering the entry barrier.
1.4 Ask: “Who Is This Technology For?”
Crypto often fixates on technology: faster chains, lower fees, sleeker wallets. Nigerian users care about different things: 12-second completion, data spend, and offline availability. There’s a gap between technical excellence and user need.
Services that missed that gap exited. Not just Bundle Africa—countless wallets, exchanges, and remittance apps entered Africa and pulled out. The tech worked; the context didn’t. App-first design, heavy data usage, and complex onboarding were blockers.
Winners leaned on local partners and existing rails—integrating USSD with telcos or sharing offline agent networks with micro-finance institutions. They didn’t push tech into the market; they embedded tech into what already works. From a pure tech perspective, it looks inefficient. In reality, it’s how you get through the door.
To thrive, crypto teams must ask not “How do we sell our tech?” but “In what form can locals actually use this?” Most answers live outside the tech—in distribution, cost, and trust structures. Understand those first; the technology becomes meaningful after.
2. The Invisible War: Own the Interface Layer
2.1 It’s Not the App That Wins—It’s the Protocol
In the U.S., Plaid is barely known to consumers. But Venmo, Robinhood, and Coinbase connect bank accounts through Plaid’s APIs. Plaid seized the data interconnect, and hundreds of apps sit atop it. Users don’t see Plaid; their transactions flow through it.
Africa is forming the same structure. Users see remittance apps, payment apps, and crypto wallets. The real contest is for the interface layer: APIs that stitch together cross-border payments, protocols that federate telcos and banks, schemas that standardize credit data. Whoever owns that layer rules the market.
MFS Africa links mobile money systems across 37 countries. An M-Pesa user in Kenya can send money to an MTN Mobile Money user in Nigeria because MFS handles the mid-stream FX, formatting, and settlement. Users never see MFS Africa; their transactions pass through its API hub.
B2C apps are replaceable; better UI or lower fees can win users away. Protocol layers are not. They’re integrated with dozens of partners and sit in the middle of the data flow. Apps compete; protocols become standards.
2.2 A Hidden Interface Binding 37 Countries
Africa isn’t one market. Fifty-four countries, each with different currencies, rules, and telco infrastructure. A success in Kenya won’t copy-paste into Nigeria. Languages, payment habits, and trusted institutions differ. Cross-border transfers are “simple” technically but must traverse every country’s rails and rules.
MFS Africa’s job isn’t just serving an API. It signs agreements with each central bank, telco, and mobile money operator, integrating each one-by-one. Safaricom (Kenya), MTN (Nigeria), and Vodafone (Ghana) all run different protocols. MFS Africa acts as translator and coordinator.
FX is computed in real time, with opaque mid-stream fees layered in. Users see what their app shows, but hidden costs accrue across layers.
Building this is less about code than about negotiation and trust—persuading regulators, agreeing rev-share with telcos, aligning partner incentives. It takes years. Once built, replicating the network is nearly impossible. The first mover becomes the de facto standard.
2.3 Why Telcos Became Banks First
Kenya’s M-Pesa launched in 2007—by telco Safaricom, not a bank. No bank account needed; a phone is enough. Today, roughly 40% of Kenya’s GDP flows through M-Pesa. The telco became the financial backbone.
Why telcos over banks? Banks had few branches and excluded people without IDs. Safaricom had tens of thousands of agents. SIM card kiosks doubled as cash-in/cash-out points. Fund your phone wallet with cash; send money via phone number; the recipient withdraws cash at a nearby agent.
Telcos were the trusted intermediary. People interact with telcos daily; banks, rarely. So telco-led finance faced less friction.
Nigeria’s MTN is on the same path—licensed to offer mobile money, extending into micro-loans and savings. Crypto firms must either ally with telcos or become equally trusted. Both are hard.
2.4 Why B2B Infra Survives
Consumer apps grow fast and fade fast—fierce competition, low loyalty, weak unit economics. B2B infra grows slowly but, once embedded, sticks—long contracts, high switching costs, and network effects.
Gluwa doesn’t court consumers. It partners with MFIs, telcos, and fintechs in Nigeria and Ghana. When those institutions lend, Gluwa’s rails record the credit events on-chain. Consumers don’t know Gluwa; their credit history accrues there.
This model scales and endures. Land one partner, and you onboard their entire user base—no one-by-one CAC. Partners won’t switch easily; migrating historical data is painful.
Same for MFS Africa. Mobile money operators could build cross-border themselves, but MFS is cheaper and faster—already integrated and pre-cleared with regulators. It’s infrastructure, not a platform.
Common traits: little consumer touch, heavy B2B integration, and ecosystem design over UI polish. Over time, these become the rules of the market. For crypto to win long term, target this infra layer.
WaaS (Wallet-as-a-Service) exposes key management and recovery via APIs so fintechs can add wallet features with a few lines of code. On/off-ramp providers abstract fiat–crypto exchange—turning Nigerian naira into USDT or Kenyan shilling into Bitcoin behind a single API.
Node infra matters too. Running your own nodes is costly and skill-intensive. Services like Infura or Alchemy outsource node ops. In Africa’s unstable networks, local node providers are even more critical: lower latency and queue-and-forward when disconnected. Add KYC/identity, smart-contract audits, blockchain analytics, and stablecoin issuance infrastructure—these B2B layers are the crypto stack’s invisible backbone.
Crypto companies can follow suit: sell infra to incumbents—on-chain credit history, cross-border crypto transfer APIs, USSD bridges. You can’t sell these to consumers, but in B2B they have clear value.
3. Redesigning Trust: Building Credit in a Score-less Society
3.1 Credit Scores Are Meaningless for 600 Million Unbanked
Credit scores require a track record—loans taken and repaid, card usage, delinquencies. Over 600 million Africans lack bank accounts, so there’s nothing to score. Traditional systems classify them as unevaluable.
But that doesn’t mean they’re untrustworthy. Farmers buy seeds seasonally and pay after harvest. Shopkeepers buy wholesale and repay days later. These repeat for years but stay off bank ledgers—cash-based or recorded in informal notebooks.
The data isn’t missing; we’re looking in the wrong place. Instead of bank statements, consider mobile top-ups. Instead of card swipes, look at mobile money transfers. Instead of delinquency reports, examine telco bill regularity. Telcos and mobile money operators already hold this data.
Some fintechs convert that into financial credit. Regular top-ups signal stable income. Repeated small transfers to the same recipient indicate family or business ties. Such patterns underpin behavior-based credit.
3.2 When Top-ups, Transfer Frequency, and Location Become Credit
Phone-based services like Phone Bank let users convert prepaid airtime into blockchain assets. No ID required; instead, phone-usage patterns proxy identity: how long the number has been active, top-up regularity, and typical locations.
Telcos already collect this, but historically used it for marketing—not finance. Middle layers like Phone Bank now connect telco data with financial rails.
Kotani Pay allows USSD access to blockchain services. Users can send crypto and access smart-contract loans without internet. Every event is recorded on-chain—repayments, frequencies, counterparties. The data is publicly verifiable and portable across services.
Crucially, this credit data isn’t locked to a single institution. Traditional scores are monopolized by bureaus. Switch banks, and you rebuild from zero. On-chain credit histories are user-owned and reusable anywhere. That’s not just convenient—it changes the ownership model of trust.
3.3 The Real Value of On-Chain Credit: Cross-Border Verifiability
A diligent Nigerian farmer moving to Kenya leaves his credit history behind. In the new country, he’s “thin file” again, rebuilding for years. Credit information is trapped within borders.
On-chain credit solves this. A blockchain history can be verified anywhere. A Kenyan lender can verify a Nigerian MFI’s records without a central authority—no need for inter-bureau treaties, just a protocol.
Gluwa builds this on the Creditcoin blockchain. When a local institution originates a loan, the record is uploaded automatically—amount, schedule, and delinquencies—stored cryptographically. PII remains private; patterns stay verifiable.
The payoff is transparency and mobility. Investors can monitor repayment rates across countries in real time. Lenders reference out-of-country histories for sharper risk models. Users carry their credit wherever they go. Credit shifts from nation-centric to person-centric.
3.4 Turning Behavior Data into Financial Access: The Tech Stack
Turning behavior into credit is complex. It’s not enough to collect data. You must identify which signals correlate with repayment, analyze patterns, and translate them into a score—often via machine learning.
Even top-ups carry rich signals: same-day monthly top-ups suggest regular income; consistent amounts imply budget discipline; highly irregular, tiny top-ups can indicate unstable cash flow. Models trained on this produce credit predictions.
But risks abound. Biased data or naïve interpretations produce unfair scores. Rural incomes spike seasonally; irregular top-ups around harvest aren’t “instability” but agricultural cycles. Algorithms must encode local context.
Leading teams co-develop models with local lenders. An agri-finance MFI in Nigeria bakes harvest cycles into repayment schedules; those domain insights improve model accuracy. Tech alone isn’t enough; you need field knowledge.
Ultimately, behavior-based credit doesn’t just add a data source; it redefines credit: patterns of economic activity over bank histories, consistency over collateral, digital footprints over ID cards. This opens a new pathway to inclusion.
4. The Final Protocol War: In Five Years, It’s Too Late
4.1 Once Standards Stick, Newcomers Obey the Rules
Early markets entertain many contenders: which protocol, which connections, which data formats? Over time, one approach becomes the de facto standard. From that point, newcomers must conform to join.
Plaid did this in the U.S. It launched in 2013 among many competitors, but it connected to major banks first and shipped dev-friendly APIs. Today, much of U.S. fintech runs on Plaid. Launch a new money app? You build to Plaid’s protocol—direct bank integrations take years.
Africa is at this standard-setting moment. MFS Africa is wiring cross-border payment interfaces; Gluwa is codifying on-chain credit. Once these crystallize, entrants will build to them. You can propose alternatives, but prying partners off an entrenched network is nearly impossible.
For crypto firms, this is the last window to help design the system. In five years, infra will be set; your choice will be “integrate or stay out.” Today you can still define how USSD maps to blockchain, how on-chain data is formatted, and which protocol governs cross-border crypto transfers.
4.2 Plaid’s Playbook Will Repeat Here
Plaid won by connecting first and most—one API to reach thousands of banks. Devs chose the shortest path; banks got distribution to hundreds of apps through one deal. Then network effects kicked in: more apps → more banks → more apps. Even better tech couldn’t overcome the network lead.
Africa shows the same pattern. MFS Africa already spans 37 countries and 500+ mobile money systems. Building a new remittance service? Their API is the fastest path. DIY deals with each telco and regulator take years. MFS Africa has become the barrier to entry.
Crypto will crown an equivalent. Whoever standardizes USSD-to-blockchain, and integrates the most telcos and FIs first, will own the choke point. Many are experimenting now; in five years, one or two will remain—the Plaid of African crypto infra.
4.3 Africa Is Not a “Future Market”—It’s a Testbed for New Rules
Many treat Africa as “next”—small now, big later. That misses the point. Africa isn’t just smaller; it runs on different rules—rules likely to spread.
M-Pesa’s model started in Kenya and went global. India’s Paytm, China’s Alipay, and Southeast Asia’s Gojek echo it. Phone-first finance without bank accounts is now a global norm—born in Africa.
Crypto will echo this. USSD access to blockchain, behavior-based credit, and on-chain credit histories are pioneered in Africa. If they work, India, Pakistan, Indonesia, and the Philippines will follow. Writing protocols in Africa is drafting global standards for places with low smartphone penetration, shaky internet, and sparse bank accounts—i.e., over half the world. African protocols will become developing-world protocols.
4.4 Will You Build Apps—or Write the Rules?
Crypto teams face a fork. One path builds consumer apps—better UI, faster TPS, lower fees—to acquire users. It’s crowded; hundreds of wallets, exchanges, and remittance apps are already fighting.
The other path builds infrastructure: telco-blockchain bridges, on-chain credit standards, USSD-based wallet APIs. It’s slower, partner-hard, and monetization is later. But once embedded, it’s nearly irreplaceable.
Apps compete; infra monopolizes. Users churn between apps; partners rarely switch infra. Apps can sprint early; infra taxes the whole market later. Visa is a network, not a consumer app. SWIFT is a protocol, not a bank app. Plaid is an interface, not a consumer brand.
Who wins Africa’s crypto market? The app with the most users—or the infra with the most partners? History favors the latter. To win long term, crypto firms must stand on the side of rule-making: define how USSD codes map to blockchain addresses, how on-chain credit is schematized, and which APIs govern cross-border crypto. Once those definitions become standards, every app builds atop them. Many build apps; few write the rules. Those few rule the market.
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