Fintech Solution for Cross-Border Payments in Francophone Africa

Cross-Border Payments in Africa: A Persistent Challenge

Historically, conducting international payments presented significant difficulties globally. However, this remains a substantial issue in Africa. Fragmented systems, elevated costs, and inadequate infrastructure continue to impede the swift and cost-effective transfer of funds for both businesses and individuals.

Traditional Methods and Emerging Demand

Currently, a large proportion of the population and businesses depend on outdated agent networks or struggle with integrating mobile wallet solutions. A clear need exists for more affordable and accessible alternatives, especially within underserved areas like Francophone Africa.

Cauridor: A Fintech Solution

Based in Guinea, the fintech company Cauridor is actively addressing this challenge. They recently secured $3.5 million in seed funding to further develop their payment infrastructure. This infrastructure facilitates the movement of funds between merchants, banks, telecom operators, and money transfer companies both within and out of Africa.

Expanding Network and Supported Methods

Cauridor’s platform currently supports a variety of payment methods. These include mobile wallets, bank transfers, and cash pickups. The company leverages a network exceeding 25,000 agents across Guinea, Senegal, Ivory Coast, Sierra Leone, and Liberia.

The Role of Agents in the Region

These agents represent a common distribution model in the region. Typically, they are small business owners utilizing point-of-sale (POS) devices. They provide essential services like cash deposits, withdrawals, and bill payment options.

A Hybrid Approach to Money Transfer

Cauridor is implementing a hybrid strategy to resolve the money transfer problem. This mirrors the approach of other fintechs in the region, combining cash networks with digital infrastructure to meet local payment requirements.

Key Partnerships and Remittance Corridors

This approach has allowed Cauridor to establish remittance corridors to important markets such as Ghana and Nigeria. Furthermore, they have secured group-level contracts with major international players including Ria, MoneyGram, and Western Union. Strategic partnerships with Orange and MTN have also been forged.

Evolving from Money Transfers to Business Payments

The founders of Cauridor, Oumar Rafiou Barry and Abdoulaye Bah, personally understood the difficulties of transferring funds to Guinea while pursuing their studies in Canada. Traditional methods for sending money to Francophone Africa were often slow and costly, leaving this region largely neglected by the wider remittance market.

Driven by this experience, they launched BNB CashApp in 2019. This consumer-level platform enabled individuals in Canada to remit funds to Africa efficiently.

The app connected directly with banking institutions, popular mobile wallets such as MTN, and a network of agents utilizing a mobile portal for convenient cash disbursements.

However, as the platform expanded, the founders identified a more significant obstacle: the fragmented and underdeveloped payment systems within Africa. “It became clear that robust payment infrastructure was largely absent in Francophone Africa,” explained CEO Barry in an interview with TechCrunch. “Therefore, we needed to proactively develop these payment networks within the region.”

Recognizing a substantial market opportunity, the team strategically shifted its focus in 2022 towards constructing payment infrastructure for the region.

By 2023, the company consolidated both its consumer remittance services and its B2B payment infrastructure under the unified Cauridor brand, mirroring the operational strategies of companies like Tanzania’s Nala and Rafiki.

This strategic redirection proved successful. Currently, over 90% of Cauridor’s revenue is generated by its payment rails business.

In 2023, Cauridor facilitated 2 million transactions, achieving a total payment volume (TPV) of $300 million. This figure increased to $500 million in 2024, according to company reports.

Key Achievements of Cauridor

• 2 Million Transactions processed in 2023.
• $300 Million in Total Payment Volume (TPV) in 2023.
• $500 Million in Total Payment Volume (TPV) in 2024.
• A strategic pivot from consumer remittances to B2B payment rails.

The company’s growth demonstrates the demand for reliable and efficient payment solutions in Francophone Africa.

Cauridor’s success highlights the importance of addressing infrastructural gaps to unlock economic potential.

Competitive Landscape and Future Growth Strategies

According to Barry, Cauridor’s primary competitors include well-known companies such as Onafriq (previously MFS Africa) and Thunes. However, the company has maintained its position in the market by establishing payment networks in underserved regions, specifically mentioning Guinea and Liberia.

He emphasizes that dedicated customer support and competitive pricing are key factors in customer retention. Cauridor actively assists customers with issues like failed mobile money transfers stemming from incomplete Know Your Customer (KYC) verification.

For instance, if a recipient is limited to receiving only $10 from a $700 payment, Cauridor intervenes to facilitate account upgrades and ensure successful transaction completion.

Barry believes Cauridor’s robust local presence allows it to negotiate more favorable forex margins, benefits that are then passed on to its clientele. This advantage was instrumental in attracting significant clients like MoneyGram.

MoneyGram transitioned from other providers, citing Cauridor’s superior rates and enhanced customer service as the deciding factors.

Despite the competitive nature of the cross-border payments sector, collaboration remains prevalent. Several of Cauridor’s competitors utilize its infrastructure in certain areas, mirroring Cauridor’s partnerships with companies like Thunes to achieve broader global coverage.

Currently, Cauridor operates with a global team of approximately 200 employees, with offices located in Ivory Coast, Senegal, Guinea, Sierra Leone, and Liberia.

The recent seed round funding was spearheaded by Oui Capital, a Pan-African venture capital firm, with additional investment from Rally Cap, BKR Capital, and various angel investors.

These newly acquired funds will be allocated to expansion into new markets – including recently established offices in Mali and Nigeria – strengthening its teams, and amplifying marketing initiatives.

Barry revealed to TechCrunch that Cauridor is also preparing for a Series A funding round. Furthermore, the company is investigating the integration of blockchain technology to optimize settlement processes and capitalize on the increasing popularity of stablecoins within Africa’s cross-border payment ecosystem.