TechCabal Daily: StanChart cancels international spending on naira cards
- Post by: Irjar Jira
- July 25, 2022
- Comments off
25 JULY, 2022
IN PARTNERSHIP
Happy day of the salaried
This week’s thought is that streaming services might have become too costly for the limited libraries they offer.
Season 7 of Big Brother Naija premiered this weekend, and anyone without a DStv subscription has to get a Showmax subscription to keep up with the characters. You can either tune into Twitter FM to receive live updates or you can subscribe to DStv.
The good news: I now have 24-hour access to 20-something-year-olds playing children’s games. Bad news: I have both Netflix and Showmax subscriptions but still can’t watch all the shows I want like Criminal Minds or Ms. Marvel. I’d have to get Disney+ if I want to watch those, but the service isn’t even available in my country yet.
Streaming services are losing subscribers because there are too many and offer too little.
CRYPTO MARKET
 |
 |
 |
|---|---|---|
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Bitcoin |
$21,886 |
– 2. 15% |
|
Ethereum |
$1,515 |
– 2. 52% |
|
BNB |
$254 |
– 1. 28% |
|
Solana |
$38. 12 |
– 1. 79% |
|
Cardano |
$0. 49 |
– 3. 74% |
|
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Source: CoinMarketCap |
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Data as of 04: 30 AM WAT, July 25, 2022.
STANDARD CHARTERED SHUTS DOWN INTERNATIONAL SPEND ON NAIRA CARD
There are more troubling news about forex in Nigeria.
A few weeks ago, several African fintechs shutdown their virtual dollar card services after their API provider, Union54, experienced recurring chargeback fraud issues.
Many Nigerian individuals and businesses were affected by the fact that they can’t use their naira card to pay international services such as Netflix or Amazon Web Service (AWS). In the coming weeks, it is expected that more people will be affected.
What’s happening?
Last weekend, Standard Chartered Bank, a British multinational bank, announced that it would be shutting down international spend on its naira cards. All customers of Standard Chartered Bank will be unable to use their cards to purchase foreign subscriptions starting August 1.
This time the culprit is not chargeback fraud, but Nigeria’s worsening forex situation.
Over the past few months, several commercial banks in Nigeria have instituted a $20 international spending limit on their naira cards. Zenith Bank and UBA have also stopped international ATM cash withdrawals from their naira cards.
This is all because the Central Bank of Nigeria (CBN), Nigeria’s apex bank, has reduced how much forex it makes available to commercial banks following a massive 2-year drop in its forex earnings. While the CBN continues to sell dollars at an official rate of N415/dollar, the prices of forex on parallel markets have soared to N630/dollar.
Zoom out: It’s not clear if other banks will follow suit, but if we learnt anything from Q1 when most banks instituted the $20 spending limit, it’s that bad news comes in quick succession.
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SOUTH AFRICAN TAXMAN WANTS A BILLION FROM BITCOIN SCAM
Two weeks ago, the US Commodities Futures Trading Commission (CFTC) announced that it had charged a South African man with involvement in a $1.7 billion bitcoin fraud scheme.
The good news is that some funds from the scheme were recovered by liquidators at Mirror Trade International (MTI), which Cornelius Johannes Steynberg, who was the CEO of MTI, which was used to fund the scam.
The bad news is that victims of the scam are unlikely to touch one cent of the funds recovered. This is thanks to South African Revenue Services (SARS).
The billion-rand bigger picture
According to MyBroadband , in March 2021, the liquidators recovered 1,281 bitcoin frozen by MTI’s former brokerage in Belize, FXChoice. The liquidators immediately sold the bitcoin and received R1.1 billion (~$65 million) for the assets.
SARS says that the liquidators failed to file their tax returns and slapped them with a R580 million (~$34 million) fine plus tax and interest, bringing the total to R930 million (~$55 million) between the tax years 2020 and 2021.
But, but, what about the victims?
If the SARS’ claim is successful, between R69 million (~$4 million) and R169 million (~$10 million) in the failed scheme’s estate, a sizeable chunk of which will likely be spent on legal fees, leaving little for the victims.
Apart from the South African taxman, at least 3 other parties are vying for their slice of the R1.1 billion pie–MTI’s liquidators, Steynberg’s liquidators, and the CFTC in the US, where it is claimed MTI defrauded 23,000 individuals out of 29,421 bitcoins valued at R29.6 billion (~$1.7 billion. )
That’s it, folks
It seems that victims of the fraud scheme wanted to see the perpetrators behind bars and their money back. It is becoming more probable that they will have to settle for the former.
NETFLIX’S AD-TIER PLAN WILL HAVE A SMALLER LIBRARY
Some people say that exclusivity is the backbone of successful businesses. Although we don’t know if Netflix executives believe it, these stakeholders do bring exclusivity to Netflix.
Since April 2022, when Netflix officially announced that it would launch ads on its platform, there have been speculations about how the ads would operate, especially with Netflix’s recent efforts to end password sharing on the platform.
Netflix finally announced last week that its imminent ad-supported plan would not allow users to see all the movies on its current catalogue. This comes after the streaming service company partnered with Microsoft to market an ad-supported tier in its subscription options.
While we will have to wait till next year to see what movies will be off limits for the ad-supported tier, there’s the looming question of whether hits like Stranger Things and Squid Game will be included as exclusives, seeing that these movies literally pulled people to use the service.
If you ask us, we think that putting the hit movies in exclusives will hurt the adoption of the advertising plans. Who wants to see ads but not the hit movies? We are not!
Netflix already offers a location-specific library which limits what users can see and when. For example, season 6 of Peaky Blinders took 4 extra months to be available in some parts of the world.
Big picture: We don’t see how this exclusivity pays Netflix. Netflix’s greatest problem right now is its limited library. Netflix should dilute its library.
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TC INSIGHTS: ACQUIRE SOUTH AFRICA
South Africa is the king of tech acquisitions and mergers. While Nigeria remains Africa’s largest information and technology market 329 It leads the way for exits, with companies in the country accounting for more than one-third (35) of the acquisitions that have taken place across Africa’s tech space since 2015. Egypt, Nigeria, and Kenya complete the pile with 22, 15, and 9 respectively.
In the same vein, South Africa leads the way annually in terms of the number of successful exits. It topped the list in 2019, 2020, 2021 with about 6, 3 and 9 exits respectively, and is on course to repeat the feat this year, with 6 such deals so far as of the end of May 2022.
Deals like these are not uncommon because of the country’s strong economy and high economic indicators. For instance, the country is the most developed country in Africa, with services representing 73% of its $329. 53 billion strong GDP as of 2021.
According to Tshepo Magagane, an investment banker based in South Africa, “It is primarily the shape and structure of the economy, with South Africa having more mature companies which are then rechanneling funds into the start-up tech scene with the capital markets and banking system playing a supportive role.”
Similar to the success of established tech businesses in South Africa, exits are always within reach for budding startups. “South Africa has a stronger local ecosystem. The likes of Naspers Foundry, large Technology, Media, and Telecom companies (TMT) are big drivers of activity. He shared that the virtuous circle has been created by the successes of MTN and Vodacom, as well as other telco giants like Naspers.
This has made it attractive for many young graduates, making it possible to continue expanding the startup pipeline. Graduates from UCT, UP and Wits aren’t looking for jobs at large companies. They are focusing instead on small businesses .”
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While the number of acquisitions will likely drive activity in the startup ecosystem, a greater focus on being acquired by larger companies could stifle innovation within startups.
“In the long term, there are risks that the involvement of large companies may strangle innovation/risk-taking (or block new entrants).”
A strong private sector is crucial to encouraging acquisition deals. Other countries can learn valuable lessons from South Africa in order to encourage acquisitions. It is crucial to foster a favorable environment for the private sector by reducing red tape, creating an enabling legal environment, encouraging efficient legal structures, and improving the local financing system .
Acquisitions are just beginning and startups continue to play an important role in everyday life on the continent. The future looks bright indeed.
You can download all our reports here and watch videos from our events. Send your custom research requests here.
FUTURE IS FEMALE MENTORSHIP PROGRAMME LAUNCHES
Moore Media International Public Relations, a US-headquartered PR agency focusing on African tech startups, announces the launch of the th ird edition of The Future is Female Mentorship Programme. This programme is a mentorship program in communications and public relations that is exclusively for African female founders of tech. It is the only program of its kind in Africa that is exclusively dedicated to female founders.
Mirroring the previous editions, this third edition will give African female founders of tech startups at early stages with basic knowledge of PR and communications. The programme will teach the founders how to create a plan for PR, tips on storytelling, how to get media coverage, how best to position their startup for investment, and much more.
If you are an African female tech founder launching in African markets and/or serving Africans in the diaspora, apply here by July 29. You can also learn more about the programme here or follow @CMooreMedia and #CMMTheFutureIsFemale for updates.
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CROSSWORD: GUESS THE CURRENCY
Nothing has driven us all to anger these past months like the value of all our currencies. Take the edge off today and see how many of these currencies you can actually guess.
IN OTHER NEWS FROM TECHCABAL
The UK Global Talent Visa is not just for techies. It’s also available to writers, fashion designers, academics, and others. Here’s how 2 Nigerian writers, Ope Adedeji and Chika Jones, used the visa to japa.
Jobox, the co-founder of talent discovery startup Jobox, isn’t looking to become Steve Jobs. But he wants to make a difference in the world. Here’s how he’s doing just that.
The digitization of consumption in Africa has made great progress. However, digitally transforming mundane business processes such as how businesses pay each other has remained relatively unchanged. What will it take to change that?
The growth of Nigeria’s tech ecosystem is being threatened by rising inflation and fuel prices.
What other developments are there in tech?
- Mobile money interoperability in Kenya has its work cut out.
- Liquid Cyber Security launches Africa’s cybersecurity fusion centre in South Africa.
- Tanzania’s fintech NALA enters Kenya, and inks diaspora remittance deal with Equity Bank.
- Google fires engineer who said its AI tech was sentient.