African fintech’s winning formula: Build for the constraint, not the fantasy

The African market has its own challenges. For starters, phones are basic, data is expensive. Cash is still everywhere, while credit histories are thin. Card penetration is limited and payment rails are fragmented. Regulation is slow.

But, according to businessman, entrepreneur and co-founder of Bank Zero Michael Jordaan, the companies that win do not treat these as reasons to complain. They turn them into barriers that competitors struggle to cross.

“Seriously, that may get you followers on X, but it won’t get your business to succeed,” he said, referring to complaints about low-cost phones, limited data, lack of credit cards and bureaucracy. “If you want to succeed, you’ve got to treat these constraints as the moat, not as an obstacle.”

That, in essence, is the African fintech playbook. Build for the device people already have, sit behind trusted institutions, keep costs brutally low and design for the market rather than the PowerPoint version of it.

The first lesson is simple. Do not build for the customer you wish you had.

“Build for the device people already own, not the one that you wish they owned,” Jordaan said.

That explains the enduring relevance of USSD, the clunky star-hash menus that many slick fintech founders would rather pretend had been buried with the Nokia 3310. Yet USSD works on almost every phone, does not require mobile data and reaches customers who may never download a banking app.

Clickatell is Jordaan’s prime example. While much of the world chased app stores, Clickatell backed basic mobile channels and kept making what Jordaan called “boring correct decisions”. It helped turn USSD into a banking channel, invented the four-digit SMS code now commonly used for verification, enabled Absa to become available on WhatsApp, and today supports banking and payments in markets such as Nigeria.

“Don’t make the customer come to a new channel, go to the one they’re already on,” Jordaan said.

That same thinking applies to conversational commerce. Jordaan pointed to Nile, which has built shopping directly inside WhatsApp, rather than forcing customers into websites, apps or payment journeys that do not fit local behaviour.

“If you think about it, WhatsApp already has an incredibly high penetration rate across the continent. For example, in Kenya, 97% of mobile phone users use it. It’s 96% in South Africa and 95% in Nigeria. So, why on earth would you build a website, an app, or some other checkout flow, and then beg the customer to switch from your content channel to your sales channel?

“So, what Nile has done is they filled the vo