When building next gen fintech, start with research in Africa

November 8, 2018

The bold future of UX: How new tech will shape the industry

Part 5  When building next gen fintech, start with research in Africa

The finance industry is changing in massive ways as digital technologies advance. For the next installment of our Bold Future of UX blog series, we look at how the FinTech landscape has changed in recent years, where it is headed, and who is leading the way to build a better UX.

The blurring of lines between the finance and tech worlds has given us the ability to pay for goods and services using banking apps on our phones and watches, or entirely bypass the bank using Apple Pay, Samsung Pay, or Google Pay. This is all made possible by the digitization of currency.

I know I personally have very little physical interaction with my cash. Between direct deposit, debit cards, online bill-pay, and peer-to-peer payment apps like Venmo, the old mantra of “Cash is king” is slowly starting to fade away.

Bold Insight Managing Director Gavin Lew recently spoke at the Money 20/20 conference, where he discussed FinTech in Africa, a place where that adage of “Cash is king” has long been considered outdated. Physical cash has become impractical in many parts of Africa. As an example, local currency is tricky to deal with for the average person – Zimbabwe famously unveiled a 100 trillion dollar bill due to the rampant hyperinflation plaguing the country.

And while most African nations don’t experience a cash crunch of quite that magnitude, fluctuations in the value of the local currencies are somewhat commonplace across the continent. These fluctuations are so unpredictable that the idea of carrying around a physical wallet is almost a foreign concept since a meal at McDonald’s or a coffee at Starbucks might require anywhere from a briefcase to a suitcase full of cash. Even having bags full of the aforementioned 100 trillion dollar bills is currently not enough to buy groceries in Zimbabwe.

Enter FinTech. Specifically, cryptocurrencies and digital ledger systems.

Learning from Africa about implementing a usable and useful revolutionary currency system

In the US, the day-to-day use of cryptocurrencies, such as Bitcoin, is limited and still feels like we are at the infancy stage of development. There are online guides to show you where you can pay for goods with Bitcoin, but if you have to search for a guide of where to use your money, it should be taken as a sign that it hasn’t quite hit the mainstream yet. This is, in part, due to the fluctuations of the value of Bitcoin and in part to the somewhat confusing nature of cryptocurrencies and blockchain (how do I store it, how do I spend it, how do I buy/create it, etc.). In terms of utility, we’re now in a space akin to the early days of Apple Pay where people were ready to use their new Apple Watches but the infrastructure at the point-of-sale terminals wasn’t in place quite yet. Except in this case, not only are the sellers lacking the ability to accept cryptocurrency, but the customer is also not equipped (and likely doesn’t have the desire) to make a cryptocurrency payment.

While in the US these limitations might be enough to scare away the average potential user, in parts of Africa, they’re non-issues. Fluctuations in the value of Bitcoin don’t scare people in certain African nations since the national currency fluctuates on a regular basis. It’s also easier to obtain and spend Bitcoin in Africa; South Africa, for example, is set to expand its infrastructure of Bitcoin ATMs and POS systems.

The user experience of emerging FinTech might be considered superior in Africa compared to the United States. While in the US, we are still largely debating the value, legitimacy, and utility of cryptocurrencies, in Africa, they’ve moved past that debate and cryptocurrencies are already being used to buy goods. Not only do users understand Bitcoin and have the necessary tools to make payments with it, but, possibly even more important, the infrastructure for acquiring Bitcoin and exchanging payments are in place. The utility of cryptocurrencies has been communicated and made known, effectively lifting the user experience of this emerging technology.

It’s clear that the future of currency is digital, whether it’s dollars and cents, Bitcoin, Ripple, Ethereum, or even one of the many copycat currencies (Litecoin, Dogecoin, Garlicoin, etc.). Whatever the currency of the future is, there will obviously be a need to make it easy to store and easy to spend. Perhaps the real innovations will come from the retailers. Maybe Amazon is on to something with its brick and mortar stores where you pay by just walking out the front door…

What are your thoughts on all of this? Comment below and let’s get a dialogue started!

This blog post is part five of a series, The bold future of UX: How new tech will shape the industry, that discusses future technologies and some of the issues and challenges that will face the user and the UX community. Read Part 1 that discussed Singularity and the associated challenges with UX design , Part 2 which provided an overview of focus areas for AI to be successful ,  Part 3 which dug further into the concept of context in AI, and Part 4 which proposed UX design principles for robot design.