Inside MTN’s Fintech baptism of fire
How Nigeria's biggest telco lost $53 million
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Abeg gets a new name
With the rebranding of the Abeg app to Getpocket, the worst kept secret in Nigeria’s fintech space is out. The three remaining people living under a rock now know PiggyTech owns Abeg—or at least owns a controlling stake. The tale of how that ownership came to be remains a closely guarded secret, but that’s me getting sidetracked. Abeg’s rebranding has been a PR success judging by the number of articles I’ve seen on the topic. In all those articles, I didn’t find the answer to one question: why did they choose PocketApp as the new name? I only ask because it sort of brings the more popular Getpocket app, which helps you bookmark articles, to mind.
I’m pretty sure someone on the Abeg team thought about this question so there must be a compelling reason why they went with the name anyway. Away from the name, I was recently thinking about why I liked the Abeg app in the first place before I forgot about it a few months later. Why was the first iteration of Abeg a passing fancy for me? Sure, it was fun to send my friends and contacts requests to “Abeg send me 50k.” But in the end, good ol’ USSD and Mobile banking–janky as they are on some days–are my go-to methods for sending money.
To be fair, this isn’t exactly great criticism of Abeg because, from the jump, the founders admitted they wanted to create an exciting “Cashapp for Nigeria.” I found this TechCabal article from 2020 where the app’s creator, Dare Adekoya said, “Everybody is just doing boring shit… I’ve never been excited about any app and that’s sad.” Whether it was your cup of tea or not, the Abeg app had bright colours and started out being really fun.
Yet, like every nightclub or restaurant owner in Lagos will tell you, the fun gets old really quickly. There are only so many times your friend can send you a 50k request on Abeg before it gets a little played out. Here’s a quote from a TechCrunch article that explains the slowdown in the initial hype: “Coming into 2021, the hype around the app — especially on Twitter, where it gained fame — died down. To many, it seemed like the app was marching toward a slow death.”
One Big Brother sponsorship later, Abeg is taking a newer route, with its eyes on social commerce and a Mobile Money Operator licence almost in hand. PocketApp will compete with Paystack, Flutterwave and GTCO’s Squad in the payments and social commerce space, as companies continue to bet that the future of retail is social media networks. It’s early days yet, but this is a space worth watching. Speaking about early days, MTN learnt a brutal lesson in the first week after launching MoMo, its Mobile Money offering in Nigeria.
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MTN learns that the F in Fintech sometimes means Fraud
One of the biggest issues fintech startups all over the world have to deal with is fraud. PayPal, for instance, disclosed that it had 4.5 million fake accounts on its network. It kind of shows that no matter how big you are in the financial services space, fraud and fraudsters come for us all.
That’s the big lesson Nigeria’s biggest telco, MTN, learned in the first week of launching its MoMo service in Nigeria. Days after launching MoMo, MTN suffered a loss of $53 million; this Quartz does a great job of recapping the details, but there are still a few questions worth considering.
How did a loss of this proportion stay under the radar for this long? It’s hard to say, but there were already some news stories about the “cyber attack” on MoMo on May 27. An email from NIBSS from the same period seemed to confirm those early reports. Part of the email read, “Please be informed that we are currently investigating a suspected fraud case involving MoMo PSB transactions. You are hereby advised to closely monitor all inflows from MoMo PSB wallets/accounts for suspicious activities while we investigate. We shall provide an update as soon as possible.”
How did the “cyber attack” happen?: According to some unverified online chatter, fraudsters were reportedly able to exploit a “USSD security breach in MTN's Momo Microfinance Bank.” This breach allowed people to transfer amounts ranging from 1-15 million Naira to their bank accounts by repeatedly dialling a certain USSD code. Some persons were reportedly able to withdraw the cash from their banks while most people had their bank accounts frozen.
MTN Nigeria is yet to give any official account of how the loss happened, but a source within the organization told me that the telco has now recovered 70% of the losses. Another source also told me that mum’s the word within the company, as there has been very little internal information about the incident.
And while we’re still on the subject of money….
Simpu’s $1m raise confirms that pre-seed deals are still happening
I’ve talked a lot in the past month about a funding freeze globally; I’ve also had conversations around hiring freezes and all that jazz. In one of those articles, I quoted Olumide Soyombo as saying that seed and pre-seed funding will most likely be unaffected by what the experts are calling “macroeconomic headwinds.”
So, true to form, Simpu, a B2B startup that allows businesses to receive and respond to messages from customers in one inbox has raised $1 million. Basically, if your customers can reach you across social media platforms and emails, your customer support team will likely be scrambling across platforms. Even when they do, something is likely to fall through the cracks. So omnichannel solutions like Simpu are pretty nifty.
It sounds a lot like Zendesk but its pricing– at $20 per month for teams– is cheaper than Zendesk’s $49 Team offering. Will it be enough to sway companies to make the switch from competitors like Bitrix 24 or Zoho? Simpu reckons it will, and I reckon that only time will tell.
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