Access Bank, Nigeria's largest bank by assets, has made a significant move to expand its African footprint by acquiring South African Bidvest Bank in a R2.8 billion ($159 million) deal. This acquisition is part of Access Bank's strategy to dominate the continent by 2027, having already received approvals to start a bank in Malta and planning to expand into 26 new countries over the next five years.

The acquisition is also seen as a move to diversify risk in its biggest market, Nigeria, where the bank expects its income to dwindle. Access Bank expects revenue from the Nigerian market to decline to 52% by 2027 and the share of profit before tax to drop to 33% from 63%. The bank has already snapped up acquisitions in Kenya, Angola, Sierra Leone, and Namibia, with a recent acquisition of a Mauritius bank.

In other fintech news, Palmpay, a Nigerian fintech app, has partnered with Jumia, the e-commerce platform, to allow its 35 million customers to pay on Jumia directly from their accounts. This partnership highlights the growing trend of Nigerian fintechs building pay-by-bank transfer options and Jumia's drive to improve its online payment options after Jumia Pay, its payment arm, processed $192 million last year.

The pay-by-bank transfer makes sense for fintechs as it eliminates the middlemen involved in card transactions and increases the razor-thin margins in online payments. According to the Central Bank of Nigeria, internet transfers accounted for 51.91% of all e-payment transactions in the first half of 2024. Palmpay and other fintechs gained customer trust in Nigeria after banks failed to meet the demand for cash during 2023's cash crunch, and the fintechs gave customers an avenue to access cash.

In a related development, South Africa has approved 248 crypto asset service provider (CASP) licences, showing a shift towards stricter regulation of the crypto space. This push is part of South Africa's efforts to get off the FATF Greylist, which contains countries lacking solid structures for fighting money laundering. To comply, crypto providers must meet "fit and proper" requirements under the Financial Advisory and Intermediary Services Act, which includes stricter identity checks when using crypto platforms.

The legal regulation of crypto will also further encourage adoption in a country that is already pro-crypto. Meanwhile, Satgana, a climate-focused VC firm, believes that everyone will willingly use green alternatives if climate tech products can be offered at green discounts. The firm aims to fund at least 30 climate tech startups across Africa and Europe after finalising its first fund at $8.6 million in March.

In conclusion, these developments signal growth in Africa's fintech and banking sectors, with Access Bank's acquisition of a South African bank and Palmpay's partnership with Jumia highlighting the increasing importance of fintechs in the continent's economy. As the crypto space continues to evolve, stricter regulation is expected to encourage adoption and reduce the risks of fraud, money laundering, and illegal activities.