Emerging Innovation

Hosted by Meirav Adi, CEO Europe at Neema, this episode features Moses Sule, CEO of CSL Pay.

Together, they explore why some of the most important payment innovations are emerging from markets like Africa, LATAM, and Asia and what the rest of the world can learn from them.

From mobile money and PIX to cross-border challenges and the role of stable coins, this conversation breaks down what’s really driving the future of global payments.

Transcript

SPEAKER_00 0:05

Hi everyone and welcome to Crossing Border episode 4. Our topic today is emerging innovation, and I'm very happy to host a dear friend of mine, Moses Sue, who's also the CEO of CSL Pay. Hi, Moses.

SPEAKER_01 0:24

Hi, Mira. Nice to meet you.

SPEAKER_00 0:27

You say nice to meet you, but uh we we known each other uh many years ago. We worked at City and then uh spent some time at the local. So, Moses, do you wanna uh quickly introduce yourself or or should we dive in?

SPEAKER_01 0:44

Super happy to be here with you today, Mayor. And thanks for amazing years of friendship to share similar background, worked in city as bankers, and also um having worked with DLocal, where you were leading um the commercial organization for the IMIA side, and I joined to help establish a bit of the frontier market in Africa. So I think it's going to be quite exciting for us to just talk about our experience.

SPEAKER_00 1:12

Let's maybe uh not talk about theory, start with something real. Maybe you could share a point, a moment where um you you've seen the cross-border payments that it didn't happen as you thought it would be.

SPEAKER_01 1:27

I think I'll talk about just two broad experiences. One of them is okay, originally I'm from Nigeria. So um, and if you see it outside of the country, you typically think that everyone in the country will have a maybe a credit card, or beyond the broad fact of thinking people will always carry a master card or a visa card. So um, when you see most of the global merchants wanting to accept payments in Nigeria and you go onto the pay button where you want to pay, you have two options. It's either you are paying with a master or a visa card. And and so the consequence of that means that there is a VEV, which is a local card brand that has the larger market share at some point, somewhat in the range of maybe 60% or so of the total cards in the market. There is a global merchant that is expecting Moses to pay, and Moses has a VEV card, but dev card is excluded from that particular scenario. So um sometimes this nuances need to be created. The second story will be I think in the early days of Lotter Wave, where um I was the VP and we were expanding into East Africa. The real stuff is we've integrated the dominant payment method. For us, it's card. And you've gone to Kenya, you are talking to merchants, you need to accept card payments, and the guys are saying, Where are you coming from?

SPEAKER_00 2:50

What is card card payment? Yeah.

SPEAKER_01 2:53

Yeah, so the majority of the people want to pay with their EPESA, which is their mobile wallet, and and you build something with so much scale, excited to say you are expanding to a region. But again, those things, just because we have the nuances of the global payment method, but as you go into market, so those two items are so very real to me.

SPEAKER_00 3:15

Mobile money is a great example. I remember the first time I heard of uh mobile money was about 15, 17 years ago, and I was like, how come in Africa they can use their mobile to pay for things while we struggle with cash or or you know, these plastic cards? No one would imagine you know that would become the the global standard, and that that's how basically how um uh wallets you know were uh invented, let's say, um and started the other way, and now it's it's a it's a global standard. We tend to think that we we are the standard and and emerging markets are are actually only catching up. What what's your view about it? Do you think that that that's indeed uh the situation?

SPEAKER_01 4:02

I think the first um um error we've seen in the system is always saying maybe imagined markets want to catch up to something. So um legacy systems that the global north would typically have, your advanced markets, those are legacy systems. The inadequacies we had in emerging market are to make us build something that is novel. And so, for lack of a better word, sometimes we leapprog the existing. And so for people who had feature phones, a person came into the me. So someone can pay with your feature phone, your regular Nokia phone without the Nokia 66100, right?

SPEAKER_00 4:48

The six yes, yes, exactly. Yeah, which like uh the the only functionalities I can imagine is uh maybe text messaging and and playing snakes. Yeah, yeah, to play snakes, exactly, and also pay for everything in in Africa, which is crazy, crazy, crazy. So, you know, where everything uh for you know, in our perception, everything is is is broken. Uh, you know, the that you can really see innovation arises and and things are being built, uh, which is um amazing.

SPEAKER_01 5:21

When you look at coming from very established market all your life and you your first for real interacting with the margin market, what would be some of those things you saw? Like, so we talked about the future phone, the regular Nokia phone to do payment. What would be some of the other ones you saw? Like you were like, Oh wow, these guys have sometimes they've gone ahead. So, what what would that be?

SPEAKER_00 5:45

The first time I realized that you can pay use cash to pay for something online for e-commerce, it was mind-blowing. Really, the fact that uh people are unbanked, but they still have you know access to internet, to the internet, and and they can and they can use cash and and buy things from Amazon or or watch use Netflix or things like that. That was mind-blowing. Who would have thought that this market would be uh the potential in this market would be so massive that uh that the global north would actually need to adapt and to adapt itself to the to the behavior of the consumers, of the of the of the population in these markets, meaning uh using different payment methods, uh local payment methods, not the global one, the legacy visa, MasterCard, Swift, which we'll probably cover later on.

SPEAKER_01 6:43

And and so there are there are two very broad items that sometimes we we need to almost extra quickly. One of them is as we talk about the global south, we are talking about the margin market, and we are quick to almost just talk about their currencies, they are not as strong as the advanced market. Um, we are quick to think that the infrastructures are readily not available, and we quickly now call their payment methods alternative payment methods. So we've classified the payment methods, whether it's um peaks in Brazil or Ozo in Mexico or UPI, all of those things we call them alternative payment methods. They are no longer alternative because the majority of the people, the world population is concentrated there. So, and and we use that so very loosely to say it's alternative, but it's no longer alternative because that is the dominant payment methods they use here.

SPEAKER_00 7:40

I agree, I agree, and I think you know, the in the coming years it will maybe that the term will change. You're right. Uh obviously, uh card payment being the non-alternative the payment method is uh I'm not sure it's gonna stay there for forever, obviously. You know, it's not only innovation, it's not uh, you know, it's not something that only came as a as an alternative or the infrastructure. I think you can really see literally change the behavior of people.

SPEAKER_01 8:11

If we even just speak for of the broad authority payment methods beyond cards, when you see peace, um peaks is almost centralized, backed by the central bank on that side, when you see UPI, even though it's for non-profit, but there is a backing of the central bank in India when you come into NPESA, it is from SafariCon, privately owned, without the government backing. So you see, for some of the ones that have scaled, so there is always a peaks, there is UPI, there is NIP in Nigeria, which is almost Nigerian Central Suite. NPSA is an outlier. And it's so very good for us to appreciate that outlier. It's not like the others where there is the government backing. It is a private telco is coming to say lots of people have a future phone. How do we build something that is equal to the behavior of the people? And because sometimes we we don't imagine the behavior of the people is so important when you come to alternative payment and like in the imagined market. So uh the person wants to have control, final control. I'll give you a practical example. Um, in our past life where we're selling recurring payments into Africa, you find out that we have some of the merchants who say the way they understand recurring payments is you tokenize your card on a set day, something runs and take the money. But when you go into Kenya, the consumer wants to give the final action. So the consumer wants to send me a PIN, I will put, I will impute the PIN on that, the OTP for you to authorize that kind of payment. So so so the behavior of the people sometimes is so important for us in the West to understand that it is not even a lack of infrastructure, it is the behavior, the person of the consumer. And it's such a very amazing thing to see. Or when you pick, um you go to Brazil where everything is done as split payment. So whether somebody's paying for something very marginal, they want to do it as split payment, multiple.

SPEAKER_00 10:31

Yeah, instalments, yeah, of course.

SPEAKER_01 10:33

Installments, yeah, thank you. So so when you talk of instalment and you are we're talking to our friends in Latin, instalments is so important. But when you come into Africa, nobody's talking about installments, you can pay once for those items. So you see those uniqueness of the behaviors of the people who readily comes in, and maybe you can talk about what experience you've seen.

SPEAKER_00 10:55

The consumer behavior, you there is no instalment in in Africa at all.

SPEAKER_01 10:59

It's not something so when people do buy now, pay later, it is for almost very big assets. So you want to buy a TV set, you want to buy something, you want to buy a car, it's not your regular um just small items. People typically just want to pay once and leave. And so if you come into the market and you are thinking installment as something you want to push on the consumer, the consumer is almost going to be looking at um, I have free cash flow, I can just pay for this stuff. When you go into Brazil, for example, it's not maybe the person doesn't have free cash flow, it is just that consumer behavior of saying, I won't part away with this um particular amount at a given time. So um when the West we offer services into the market, we need to understand the persona of the people. Um so if someone wants to do, I won't pay maybe any kind of subscription service and say I want to make it installment. So someone can be asking for that in other parts of the world, but that's not what would rather just pay, yeah, one of our let's touch cross-border.

SPEAKER_00 12:16

We're all in the cross-border uh world. Um and and I think you know, with all the technology and the development, and we work for fintechs, uh, and and obviously uh we are both exactly. Things in cross-border are still perceived as as slow and and as you know, slow and complex for individuals, for companies, uh, you know, money movement across the world. Uh we've we've had systems like uh Swift uh um for years, you know, and and it and it's still there. It's it's crazy that it's still there. Um why do you think that that cross-border feels still uh broken?

SPEAKER_01 13:00

Everyone is taking their time to do small action. So you see the time it takes. And remember that time zone difference. Maybe the correspondent bank is a different time zone, as at the time they open, this other market is closing and all of those. So you see, um, transactions typically will not happen. T plus two, in some cases, T plus three. Yeah, that's the first part. The second part is the fee, because everyone that touched that transaction needs to end a fee. So, so Miravu is expecting to receive a thousand dollars and Moses who is sending this, or if we even flip it, you find out that what gets to you or what gets to me is a thousand less, one correspondent bank, two correspondent banks, and all of those stuff. So those two items will always be there.

SPEAKER_00 13:51

And there's also the element, and I think it's it's important for everyone, whether it's businesses or individuals, that you have no visibility. You know, you you give your money somewhere and you hope that it will get to the to the other side, you know, whatever gets there minus the fees. So there's lack of visibility. Uh it's slow and it's expensive. And at this point, you know, we work uh uh in in payment companies. So here is where we add our value um processing um payments.

SPEAKER_01 14:26

But this visibility you just mentioned, we are dealing with a generation that wants it now. I want to see where it is. So I think that is such a very important item that sometimes we've not even thought of.

SPEAKER_00 14:39

Yeah, it's that and that's the new standard. No one like people will not settle for less. I think we can we can have this conversation without mentioning the hottest topic, uh the uh um stables, yeah. Yeah, yeah, yeah. No, no, first of all coins, stable coins were in the payments world first. Uh so stable coins. So, what's what's your uh view on this?

SPEAKER_01 15:06

You I'll ask you that. So you are in Amsterdam. Like, do you see like for you? Can you just walk up to the coffee shop and pay with your stables, USDC or USDT? What we will see will be um the liquidity side of it, that is the use case. So um, if you pick the SEPA that you have, maybe in Europe or you USD, some of these big currencies, as you go into margin market where currencies is exotic, um those complexities we thought about in terms of visibility that you mentioned, or uh the period it takes, or even the cost, you find that stables now become uh the go-to because it will now it answers all of those things you we just listed. Stables will continue to grow in in this market and the forward thinking um financial institutions.

SPEAKER_00 16:03

So more more on the business side of things, you mean you think?

SPEAKER_01 16:07

Yeah, on the B2B side that layer that layer is. Yeah, that's the real layer that it will solve for. Um, do we see use cases of maybe the gig economy people who do remote work wanting to be paid into stables? Yes, you will see those items. Um, do people want to receive into stables so that they could evade local taxes? We truly don't know about those. But we framing for the sake of framing the people who are in the gig economy, they will not be, I won't call them outlier, but they won't be such a massive subset of the population. And so those use cases will come with time. But today, I think it's the B2B side that stables read readily will solve for. And we are looking for governments of the central banks and also banks who will be forwardthinking. If we almost begin to look at what the next five, ten years will look like for in terms of payment technologies and all of those items, what are those things you see? What region, what kind of payment methods, what are the things you see that will become reliable?

SPEAKER_00 17:25

I think we mainly touched, you know, because of our uh mutual experience, we touched uh Latin America and and Africa a lot, but we didn't touch a very interesting region in the world which is APAC. And there's a lot of innovation, um, or a lot of uh you know uh movement in in the in the fintech and the payment space. Um and there you can see how uh how wallets uh become more and more um relevant. Look look even in in China, Alipay, WeChen, everybody's using that um to pay and then to receive money and uh Gcash, and there are so many examples.

SPEAKER_01 18:17

So today you find out that in the past, when you want to do P2P transfer, you will almost two out of every three transactions will typically have gone to a bank. So Mira is sending to Moses in a Zenit to GT or First Bank or FCMB and any of those banks. But chances are that maybe two out of every five or three out of every ten is now moving towards OP. So yeah, so that super hub idea is still there, and we've seen, and what we are beginning to see will be cross-pollination of ideas. Um, it's done successfully. It just came to mind as you talked about um Alipe and we chart to stuff, it's scaled and done quite well. We've seen it extended into Nigeria, and what I am seeing on the back of what you just talked about will be technologies that have done quite well in certain markets can rapidly grow into a new market. So we are looking forward to a time where um UPI will expand beyond India to multiple markets, not just in the market.

SPEAKER_00 19:25

Like fixed did in Latin market.

SPEAKER_01 19:26

Exactly, in Latin, Latin. Yeah.

SPEAKER_00 19:29

What I think will happen eventually that the different wallets, okay, the different apps will communicate. There will be switch that my wallet in China will speak to your wallet in Nigeria. That that's a revolution. You know, it's it's it's going to change the whole uh um you know the whole ecosystem uh that we live in uh in the payments world.

SPEAKER_01 19:55

I think the biggest part will be for the rails, the infrastructure that allows so the stables will now take care of the heavy lifting of the B2B kind of flows. Then if there are standards that allow people to be able to share APIs and the way UPI is shared APIs so that GP and everyone can plug into that, I see that as something that truly can scale, especially when we look at continents, countries where intercontinental trade happened. So if you see maybe the amount of Africa buying Africans buying into China importing stuff, it becomes quite very easy for someone to say, I have an open wallet, why can't I just pay directly into this? Or someone in Kenya who typically would have gone for medical tourism in India, those kind of areas, they can use MPESA to pay into UPI.

SPEAKER_00 20:47

I I see that that can just become I know that some of the wallets are already enabling uh B2C B2C payments. Yeah, but interesting to see where things uh will go uh in the in the B2B space.

SPEAKER_01 21:05

The B2B space will be driven largely by so the consumer behavior. You can't sometimes you can't keep the consumer, the consumer is creative, young, youthful demography, smartphone penetration, and all of those stuff, digital native, they will do stuff. The B2B space is where you are thinking, oh, regulation, what happens to me, this kind of big amount of money if it moves, it fizzles out. So, and and and that's why both of us we know it's going to be very important for the regulators and also government to see it and work closely. Because the consumer side, the consumers will look for a way to be able to deal. The consumers will always look for a way to do whatever they have to do. Um, but the B2B side where regulation is almost you are quick to be fine as a consumer can do something.

SPEAKER_00 22:00

Whether the banks will uh uh you know will be stronger here or or the businesses uh will have more impact on the on the governments.

SPEAKER_01 22:08

When we think of payments, we think of businesses, um our career pattern, some of the nuances we we share jointly with our family and all of those things, and we see our children grow up to almost begin to push the boundaries of payments, what we've experienced, and when we see the little people interact with us is such a very good reminder to know that we have people in the different parts of the world who are solving very complex things. Well done and good work you're doing.

SPEAKER_00 22:41

So I think you know, with uh this uh note, with this positive note, uh, we're gonna wrap it up for today. Thank you so, so much. It was a pleasure. Uh, looking forward to working with you, you know, sometimes again.

SPEAKER_01 22:54

Always a pleasure.