Marcello Schermer, who leads international expansion at Yoco, a South African digital payments startup, wants African fintechs to create products that nudge customers toward smarter decisions in real time. For him, fintechs should be more of a financial partner.
Conversations about African startups today almost always circle back to fintech, a “leapfrog effect” that has reshaped how the world views the continent’s innovation.
That shift is happening at scale. Africa now hosts more than 5,000 startups, a sharp rise in just a few years. Even as global venture capital cooled in 2024, the continent proved resilient, and fintech attracted over 40% of funding, about $1.37 billion. Thanks to investors who continued to bet on a young, urbanising population and digital infrastructure.
Traditional banks, once the main gatekeepers of money, are steadily giving way to mobile wallets, digital kiosks, and all-in-one super-apps that now power everyday commerce from street markets to small businesses built around fintech.
Nowhere is that transformation more visible than in the fintech sector itself. In Lagos and other commercial hubs, smartphones are the engines of trade. Fintech remains the heavyweight, accounting for over 30% of startups on the continent.
“A few years ago, instant cross-border trade wasn’t possible,” Schermer told TechCabal in an interview. “ We relied on cash. Now, half of all transactions run on digital rails.”
After a decade of startups digitising payments and expanding financial access, he believes the next phase is to become a true financial partner, with tools that not only record transactions but also guide smarter decisions in real time.
“These changes may shift how fintechs do their business and how customers think about money and opportunity,” Schermer said.
This interview has been edited for length and clarity.
How would you describe the state of Africa’s fintech ecosystem right now?
It’s a pretty exciting place to be. We’ve got one of the most mature financial services industries, particularly in the big four markets: Egypt, Kenya, Nigeria, and South Africa. At the same time, we’re seeing a wave of new fintechs putting fresh spins on old models and finding real traction.
Fintech is foundational infrastructure for the economy and for society. If people don’t have ways to earn, save, invest, and spend safely, a lot of other things break, because so much of life is tied to how you make and manage money.
What’s beautiful is seeing fintechs across the continent build that foundational layer in their local contexts. In some markets, that means giving people access to crypto because it’s more stable than the local currency. In others, it’s aggregating multiple mobile money wallets so users can see everything in one place. Remittances are another big one: helping people send money home or across borders more efficiently. All of this gives people better tools to improve their lives, to fund education, live better, invest, and that’s high‑impact work.
Both the mature players and the new players are innovating, and that creates a very interesting dynamic.
In 2026, what do you think is a must‑have for fintech startups in Africa?
A must‑have is building proactive tools instead of reactive ones. For a long time, most financial tools have been backward-looking. Your spend‑management app told you what you spent last month, your investment app showed you how your portfolio performed last month, and your banking app told you what your balance ended up. What’s really interesting today is that a lot of financial services applications can become more partners and start nudging founders and customers toward better financial decisions in real time.
Imagine your banking app saying, ‘If you save a little more here, you can afford that December holiday,’ instead of just showing you that you overspent. Or your investment app pinging you when a stock you’re tracking dips and saying, This might be a good entry point, instead of only reporting performance after the move.
A lot of these capabilities used to be available only to people who could build them themselves, but now the underlying technology is accessible enough that they can work for everyone. That’s what’s exciting: tools that proactively help you live better financially rather than just documenting what already happened.
Looking back at 2025, what happened in fintech that you think will matter in 2026?
Africa’s reserve or central bank’s payments ecosystem modernisation is a big move. It’s an effort to update the national payment systems, make them more inclusive for fintechs, more technologically advanced, and more inclusive for society. These are regulatory projects, so they move at a regulatory pace, but once they land, they are going to unlock a lot for Africa’s fintech ecosystem.
How do you feel about the fintech regulatory environment in African markets?
As a starting point, payments should be regulated. We’re dealing with people’s money, financial crime risks, and the stability of the wider economy, so there has to be a framework and a level playing field where everyone knows the rules.
In South Africa, the regulators have taken measured steps: for example, there are now licences for crypto providers and for different payment activities, which gives clarity on what’s allowed. Could they move faster? Probably, but their primary job is to protect the financial system, and that’s more complicated than it looks from the outside.
You sit in the payment space. What should we be watching there in 2026?
Payments in Africa are in a very interesting state because the space is so competitive. We’ve got many different offerings, with traditional banks and new players all active, and that competition is translating into more choice and better value for customers; that’s what we have to keep watching.
For consumers and merchants, that means more choice and better quality, better pricing, better experiences, and more tailored products. That’s what we want to see in a healthy market.
What patterns do you see fintechs struggle with as they build?
The biggest challenge is how to balance partnering and building. It’s easier than ever to partner and stitch together solutions from different providers, which is great for getting into the market quickly. But the real challenge is knowing when to keep partnering and when you need to start building and owning more of the stack so that you don’t lose the customer relationship.
I see some fintechs going way too deep, way too early, and others staying too shallow for too long. Finding the right balance between partnering, building, and owning is one of the big strategic challenges for the sector.
Early‑stage funding is also another big challenge, and that’s not just a fintech issue; it applies to startups in general. Once you have traction and some scale, it gets easier to raise money, but getting off the ground is very difficult. You need capital with a high tolerance for risk and a lot of patience.
In markets such as South Africa, Kenya, Nigeria, and Egypt, where there are many attractive, more predictable investment options, it’s hard to convince investors to go into high‑risk, high‑patience startup bets. That’s a structural issue.
What is the smart way for new founders to prove they are different in crowded markets?
The good news is that getting off the ground is now cheaper with the use of AI. What investors really want is traction: proof that you can build something, get it into the market, and win customers. With AI tools, you build a prototype, test it with users, and even handle parts of your marketing and go‑to‑market. It’s not a full‑blown team, but it’s enough to get initial traction.
The flip side is that, as the cost of building drops and the supply of ideas and apps explodes, it gets harder to stand out and get noticed. So the challenge is shifting from “Can I build?” to “Can I grow and distribute?” even as the barriers to starting continue to fall.
I’d tell founders to obsess less about perfecting the idea and more about how they’ll cut through the noise, get noticed, and grow.
How should fintech founders be thinking about AI and ethics?
AI is an incredible accelerator. It’s cheaper and faster than ever to prototype, experiment, and improve products. You can ship something, get feedback, and iterate at a pace that just wasn’t possible a few years ago.
But there’s a big difference between experimenting and running things at scale in production, especially when you’re dealing with people’s money. Founders need to be very clear about where AI is appropriate and where they need tighter controls or human oversight. There are limits to how much you can or should automate in financial services.
There’s also the human side. When any technology gets overused, people push back. You’re already seeing creators make their sets intentionally messy to signal that something is not AI‑generated, and you see people craving human connection. So, while AI is powerful, you can’t forget that you’re building for humans, not just optimising a system.
What does success look like for a fintechs that wants to expand across Africa?
The fintechs I’ve seen successfully tend to follow one of two paths. Either they go very deep on localisation, understanding local nuances in each market, designing and optimising products for local habits and constraints. Or they operate in parts of the stack where you don’t have to localise as much, like certain types of infrastructure or middleware.
The challenge is that countries, and even regions within countries, are really different: cultures, behaviors, and product usage patterns vary a lot. If you’re consumer‑facing, making localisation a core strength becomes critical. If you’re more of a backend player, you can sometimes let your customers handle the last‑mile localisation.