Today’s fintech landscape spans multiple sectors, including payments, lending, cryptocurrency, and security. The payments sector, further broken down based on the solutions function, includes p2p services, remittance platforms, card networks, and payment gateways.
While all fintech solutions share similar challenges like legal compliance and capital, each solution presents unique challenges for an emerging startup. For payment gateway solutions, that challenge goes beyond technical capabilities. Because success weighs heavily on the companies ability to establish and maintain relationships with banks, which can be a slow process, especially in Africa.
A payment gateway, the logistical backbone of online commerce, securely facilitates the transaction between a customer’s financial institution and the merchant’s bank. It’s the digital equivalent to a physical point-of-sale system in a store, acting as an interface between the consumer and the merchant.
Fulfilling this need requires a startup to integrate with a bank’s infrastructure, and for many African banks gaining access to their backend takes time. For the Burundian startup UbuViz, it took 4 years to build their payment gateway iHelá, an API for online payment solutions for the Burundi marketplace.
I spoke with Allan Stockman Rugano, co-founder of UbuViz, the startup bringing disruptive solutions to Burundi, about the challenges of building iHelá, building trust with the Burundian banks, and what it takes to build successful software solutions in Africa.
Meet Allan Stockman Rugano
I’m Allan Stockmann Rugano, and I was born here in Burundi. My bachelor’s degree is in mathematics, but I liked computer science, so I began teaching myself how to code during my spare time.
While I was in university, I got the opportunity to participate in a training program launched by UNICEF here in Burundi, where I worked at an innovation lab and learned how to build software solutions. We primarily built SMS-based applications for local humanitarian efforts.
I spent six years there, and in 2019, I launched my international career. I went to work for the UN organization in charge of agriculture (FAO) in Rome, Italy, and that’s where I’m currently working now as a consultant in software development. I was stationed in Rome until COVID happened, but now I’m working remotely from Burundi.
I started UbuViz in 2016 as a general IT company to build websites and web applications. In 2017, I reconnected with a former classmate from high school working at a bank as a software developer. Working in that industry, he saw how banks were still using old technologies that were not efficient.
Frustrated, one day, we said, why don’t we start a bank or something similar? And that year, 2017, we shifted UbuViz from doing general projects to working specifically on projects for Burundi’s financial services industry.
Along that journey, we came up with iHelá, a payment gateway, something like Stripe. We are aggregating payment methods from different local banks, microfinance companies, and mobile money providers in Burundi and put them in one API that local developers can consume.
Explain what value iHelá provides to the marketplace?
The main activity of iHelá is integrating with banks and other microfinance institutions to give developers and startups access to multiple payment methods. Currently, we’re integrated with 3 banks, 3 microfinance institutions, and 3 mobile money providers.
The inspiration to create iHelá came from the frustration I experienced when I started software development and building point of sale solutions; years ago. It was difficult to implement payments into the platform. Most young developers don’t have the money, time, or know-how & where to start, so they give up.
When we started iHelá, we didn’t know it would take us this long, but it’s been almost four years. Over that time, aside from the development work, we’ve had to sign a nondisclosure agreement with financial institutions, mobile money operators, share our vision, convince them that we can implement payment solutions, set up VPNs, and more.
We got our first clients in 2019, and we were able to implement their solutions in two months. Locally, demand is growing, and banks are starting to come to us to build and implement their payment solutions.
What were some of the biggest challenges you faced building iHelá?
First, we didn’t know that it would take us four years to build an MVP (Minimum Viable Product).
Second, gaining the trust of the banks and microfinance companies is hard. When we came to them with our idea, there was no trust because I “only” had software development experience in Burundi, which they considered a lack of experience. And to them, my co-founder’s five years of experience in the banking system was not sufficient.
They said we were still young. We will hire someone who studied in Morocco, France, Belgium, or Kenya because they are more trustworthy and skilled.
Here in Burundi, people trust someone who has a bachelor’s degree from the US, Europe, or India more than someone taught here. And prefer to hire developers from abroad or other African countries than Burundians.
And in the banking industry, everything is based on trust. People need to know they can trust you with their payment method and infrastructure. That’s why we created our own microfinance company to show them our products work and that “we eat our own dog food.”
If we didn’t build an institution, we would still be begging banks and other big institutions here to try to integrate with them.
Mistakes developers make when working with banks.
When you are young, you have many ideas, are full of energy, and often are willing to spend the whole night coding away. There’s a hunger to get your first client. And to make yourself competitive, you may offer to do the work for 1/10th of what financial institutions are willing to pay someone from Europe or the US.
We made this mistake.
We didn’t realize that the banks vote on a budget early in the year and put aside money for IT jobs. So when we asked for 1/10th of their estimated cost, they concluded that we were not experienced enough to know the correct prices and didn’t know what we were doing.
To overcome this, I’ve seen young people with bright ideas start working for financial institutions, and when they are inside, try to convince people to let them implement new solutions and ideas. Unfortunately, this rarely works because most of the financial institutions in Burundi buy solutions developed by a team in India, Europe, or the US, and when they bring it here, you cannot make changes to the codebase.
The alternative, which is what we’re doing, is to do it yourself, build your idea, and try it out in the field. And that’s the story of iHelá. We used to beg banks to let us implement solutions for them, and they declined, so we built the solutions ourselves.
The role of government?
Slowly policymakers are becoming aware of the young generation’s potential, but the next question is how do we harness that knowledge and potential and make use of it in the private and public sector?
The local government needs to create policies that foster innovation and embrace the local talent pool. Because you can’t say, you are combating unemployment but implement policies that do the opposite.
And from the public sector side, all the public services should try to use solutions developed inside the country. And to enhance the private sector, they could implement a policy requiring that all the data on citizens be stored locally. Overnight you would see people creating startups to manage data locally, thus developing local talent.
Thoughts on building successful software for Africa?
Pick your target market early. The two main population groups a startup can serve are the lower-end mass or the niche higher-end.
Today, most of the startups here are building solutions for the higher-end because most founders need money. And to get money quickly, you have to start with the upper and middle class who can afford your services. The one challenge with this population is that they are more likely to complain and will easily switch away from your services if your competitor is good enough or if your product is not fulfilling their needs.
While the lower-end mass will remain loyal customers if you implement helpful solutions, they stick to something that works, don’t complain, and appreciate any continued product refinement. So before you get started, it would be best to choose whom you want to serve.
Also, it’s worth noting that the higher-end is a class of people eager for the services available in the West, and they have the resources to afford them. For example, many of my friends use the Netflix account of a relative in the USA and willingly pay for data bundles to stream the content.
However, while there are solutions in the West needed here that developers could copy and implement, understand that you won’t be successful without considering the reality here and integrating that local context in your product.
Built In Africa? What does that mean to you?
It means solutions that are built with the African mindset.
Solutions built for Africa and built in Africa are cool, but my concern is Africans getting jobs because you can claim the previous phrases and hire some people from the US to come here and implement the solution.
But is that Built In Africa? Because when they’re done, they go back to their country, and we remain here with a solution we didn’t have a role in building it. This means we cannot improve the solution or customize it to our needs, whether in a local language or to embrace the reality here.
So, Built In Africa means solutions built by Africans that have the African reality built within.
Stay up to date with our newest posts and special happening here at Built In Africa. Your information is safe with us, we hate receiving pointless emails also. :)