Mono CEO Predicts Open Banking To Surpass Card Payments In Africa

In 2020, Abdulhamid Hassan founded Mono, an audacious bet and risk on the future of Africa’s financial infrastructure, rather than merely another startup spawned by pandemic-era upheaval.

Although open banking was not yet a popular term in Nigeria at the time, Hassan saw that data rather than just payments would drive the next wave of fintech.

Five years later, Mono has grown into Kenya and Ghana, served over 7 million users, and handled over 150 billion transactions on its platform.

For Hassan, however, sustainability—rather than just scale—is the true milestone.

As the Central Bank of Nigeria (CBN) prepares to introduce open banking in August, the Mono CEO discusses the prospects for open banking in Africa in an interview with Nairametrics.

Here is a dialogue, an open interview session between Nairametrics and Mono CEO.

How open are Nigerian banks in terms of exchanging data, according to Nairametrics, a company that was driving open banking long before the Central Bank of Nigeria formally introduced it? 

And according to Abdulhamid Hassan, Plaid is one of the largest open banking providers globally and, incidentally, one of our investors. They established the standards for open banking, and I believe that if the banks in Nigeria had not been accommodating, it would have been more difficult for us to follow suit.

Mono is a platform for sharing data based on consent. In order to obtain a loan from Renmoney, the client must consent by saying, “Okay, I want to give them my bank statement.” And I believe the banks have been very supportive as a result.

They have been really receptive to that, and I believe that the upcoming open banking will improve our relationship and allow for revenue sharing. Both the banks and the data provider stand to gain financially from this.

Nairametrics: What do you expect from the CBN’s scheduled August open banking launch? 

Hassan Abdulhamid: We have three expectations. First, more banks will be willing to let their clients easily provide their data. When it comes to fintechs, most of them have not been as accessible as banks. One would assume that the fintechs are the ones who are most receptive to a partnership. However, it’s intriguing to observe that Nigerian banks are more forward-thinking than some fintechs, which is why I greatly value them.

Therefore, I believe that the CBN’s permission will now require all financial institutions to expose their systems, which is why I find it fascinating.

Second, because NIBSS would also have a registry of the accredited institutions that will be allowed to offer this data, there will be more stringent rules about who can access and provide customer data.

In order to ensure that those who are actually providing data are licensed and regulated and that there won’t be any sleight of hand where individuals can access customer data without their consent, everyone is eager to see what the CBN and NIBSS will develop regarding the registry.

Lastly, we anticipate a more interconnected ecosystem. Therefore, those are the three things I am most eager to witness.

Nairametrics: Banks are open, you stated, but the majority of fintechs are not. What do you believe might be the cause of financial firms’ current willingness to disclose client information?

The first reason is that open banking creates an even playing field, says Abdulhamid Hassan. Therefore, some people might think that if I give these other companies access to my customer data, they will be able to see how many clients I have and how transactions are being completed.

However, in my opinion, sharing your data implies that you can view data from other financial organizations as well. Thus, it creates an even playing field.

And security, I believe, is the second. However, now that the CBN has issued regulations and standards for open banking, I believe that banks would feel less anxious because there are now guidelines on how to carry out this task correctly. The third, I believe, is most likely due to the fact that banks and other financial institutions dislike doing anything that does not generate revenue. Therefore, it must be financially advantageous for them to invest in it.

Since you can now actually negotiate with the banks and say, “Okay, for these API calls, we can share revenue,” I believe that now that open banking is being regulated, it will make sense to them.

Nairametrics: With the release of your Owo API, there have been discussions about Mono moving away from open banking. What are your thoughts on this?

Hassan Abdulhamid: We haven’t changed course. You wouldn’t claim that Paystack switched from offering card payment APIs to their consumer app when it first released its app. Thus, it’s more akin to the following stage of our strategy.

We were mostly an API-based business when we first started, but as time went on, we discovered that we had developed a large number of APIs that could truly simplify payments for customers in a variety of ways. 

WhatsApp has approximately 51 million Nigerian users, according to the app. How can we make it possible for everyone to engage in financial discussions?

An excellent illustration would be if you have friends or relatives on WhatsApp who were requesting money from you. The way it now operates is that you must exit WhatsApp and use your bank app to complete the transfer before sending them the receipt.

We are stating that, in order for you to link your bank account on WhatsApp, we have a new API that we have that is powered by NIBSS Direct Debit. This API enables us to connect to your bank account and debit it. After that, you can pay money to people straight from WhatsApp using your account.

That’s the concept, then. In essence, we’re using our own APIs to create new experiences for customers. The good news is that we’ll let them know that Mono is the API behind this incredible solution when they notice it. That may then lead them to our business platform, where they can now create solutions for their own companies using the same API.

Nairametrics: Some people think that Mono’s greater financial support allowed it to endure where others, like Okra, failed. Is that accurate?

Abdulhamid Hassan: Actually, Okra raised more than we did at first. Another South African rival, Stitch, raised almost $100 million but was forced to leave the Nigerian market.

In fact, Okra and Mono have raised $16 million, the same amount of money. Therefore, we have the same financial support, but our product is much larger, our API is much larger, and we operate in several other countries.

Paystack taught me that building a business involves being very close to your customers, listening to their needs, and creating what they want.

In his opinion, the market for open banking will surpass that of card payments in size and structure. Because open banking incorporates a number of factors, including identity, data, and bank payments, it will present Africa with the greatest possibility. Online transactions are safe, secure, and quick because of these three important factors. And for that reason, we are really optimistic about this market.

Nairametrics: After five years, are you profitable and how much money do you make?

Abdulhamid Hassan: We actually reached a stage last month where all of the payroll is covered by our earnings. We’ve already reached the first level, which is that our revenue can support our operations, but now we’re moving on to profitability. And that’s really important because that’s where businesses fail because they start looking for funding to stay in business.

However, we currently employ about 40 people and our revenues are sufficient to pay our salaries.

We have a remote team with members in India and the UK, but we also have an office where individuals come in on Wednesdays and work remotely every other day.

The business is doing fairly well, but as I indicated, this open banking policy opens up the possibility in a much larger level, so we’re now at a scale stage. You can now link to non-financial data in addition to financial entities. Mortgages and insurance data come to mind, among other things.