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The year 2020 was quite stressful for most organizations due to the covid 19 pandemic. Even with the uncertainties, the end of 2020 and the year 2021 were still promising for the financial technology, or fintech, industry. As the world gets used to the “new normal” way of life, what can we expect going forward in the Nigerian fintech space?

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According to data gathered by Techpoint, Nigerian fintech startups raised almost $800 million in 2021. This was 120% higher than what they raised in the past three years combined ($360.7 million).

Here are the top fintech trends for 2022.

1. Embedded finance: This is a large sector in fintech which includes payments, card payments, lending, investments, insurance, and banking. It empowers companies to offer their customers credit and other services without having to leave their platform. In terms of investments, startups like Trove, Carbon, Cowrywise, Risevest, Bamboo, etc are expected to make investing even more accessible through easy and cheap access to funds and stocks right on their platform. For payments, startups like Paga, Flutterwave, Paystack, etc are expected to be on the rise this year. Another key part of embedded finance that’s on its way to becoming mainstream in 2022 is the buy-now-pay-later option. Credpal one of the pioneers of this sector recently raised $15 million to further expand the BNPL service. The BNPL service is slated to ride the wave in 2022 and accumulate$680 billion in transactions in 2025.

2. Web3 will become more Normal: Web3 will continue to be on the rise as corporations and consumers strive for ownership over their digital goods. What Web3 does is cause changes by decentralizing the internet and rebuilding it on the blockchain. This year, there will be an explosion in decentralized finance to deliver solutions to the challenges of consumer protection, accessibility, and usability. This could instil much more confidence in the public, making them more likely to adopt it at scale. Defi enables peer-to-peer transactions and does not rely on any financial intermediaries, such as banks. Examples of such services are seen in crypto wallets such as Bitmaps, Busha, and Lazerpay.

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3. Blockchain: Crypto, the Metaverse, and virtual reality are starting to take shape in everyday life. 2022 is predicted to be a climactic year for blockchain technology as Web3 becomes safer and more accessible for use. According to Deloitte’s 2021 Global Blockchain Survey, 76% of surveyed executives “believe digital assets will serve as a strong alternative to, or outright replacement for, fiat currencies(normal currencies) in the next 5–10 years”.What attracts fintech to blockchain and web3 is its remarkable security and identity management as well as its ability to fight fraud. These benefits of blockchain and the growth of cryptocurrency could lead to a growing demand for blockchain-as-a-service (BaaS) as companies look for innovative ways to digitize and streamline all areas of their operations.
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4. Cross-border e-commerce: The pandemic led to a series of changes in 2020 and 2021. Its impact will continue to be felt into 2022, including in how people shop. The coronavirus pandemic prompted an e-commerce explosion. Transactions across the globe now offer vast growth potential for small and medium-sized businesses. Consumers now expect easy and simple payment options regardless of where they’re making the order from. As this trend becomes more popular in Nigeria, startups such as Flutterwave, Paga, Paystack, etc are expected to offer real-time payment capabilities for Africans in 2022. Klasha is also providing e-commerce solutions to both retailers outside Africa and consumers, they are expected to scale these service options.

5. Super apps: In 2022, there will be an app for almost everything. The era of super apps is here and ready for its next level of operation. “Super apps” offer vast and diverse suites of services and products from one platform. These services include transportation (likemoove, GIG mobility), retail (Konga), food delivery (like Vendease, e dey app, oya now), banking( Opay, Paga, Flutterwave,) entertainment( iroko tv, Ibaka tv) and more. Customers can purchase products and services with their super apps, and they can also schedule appointments, make reservations and even send packages to wherever they choose.

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This article was first published on 23rd April 2022

eyimegwu-ekene

I am an accomplished content creator and recently delved into technical writing. I enjoy using my skills to contribute to the exciting technological advances and create awareness of evolving technological trends in Nigeria.

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