There are about 22 digital banks in Africa with more than 20 million customers, and 80% of these banks are situated in Nigeria and South Africa. These digital banks allow you to perform all transactions with your phone anytime and anywhere, and despite their faster and easy-to-use system, they still offer very affordable services.
So are you familiar with digital banks, or are you learning about them for the first time? This guide will show you the top 5 digital banks in Africa and teach you everything you need to know about digital banks.
What are Digital Banks?
Digital banks are banks that offer all their services online. This banking system eliminates all paperwork and still provides the same services you will get at a conventional bank. The services of digital banks include
- Bill payments.
- Account opening.
- Cash withdrawals.
- Funds transfers.
- Loan management.
- Obtaining bank statements.
- Account management and transaction records monitoring.
- Cheques management.
Top 5 Fully Digital Banks in Africa
Bettr was founded by a group of creative fintech veterans and entrepreneurs over four years ago in South Africa. It is one of the best digital banks in South Africa that focuses on savings and provides virtual cards for users to enjoy fast online and in-person transactions.
Angels fully back this digital bank, which is also founder-funded, and aimed at Gen Z and millennials. In addition, apart from savings, Bettr offers a platform for consumer-focused financial products and services, aiming to grow the South African creator’s economy GDP.
Bettr is into virtual reality gaming, and they have raised their creator’s fund to support aspiring creators in the country. The founders of this bank are driven by the need to improve the financial fate of as many South African youth as possible. So they are investing in creators and helping them bank and build wealth.
Bettr will help you save, multiply your money and give you access to all the financial products you have been searching for. This freedom and access will provide you with the technology, community, and finance you need to make your dreams a reality.
Chipper cash was launched in 2018 by two entrepreneurs Maijid Moujaled from Ghana and Ham Serunjogi from Uganda. It is based in San Francisco, California, but it provides banking services across many African countries.
Chipper cash is a digital bank with over 5 million users across Africa and Europe; it offers free and instant peer-to-peer and business monetary transactions. With this digital bank, you can send and receive money from various countries supported by the platform, pay bills, purchase data, buy cryptocurrencies, etc.
Chipper cash offers numerous services in Nigeria, Tanzania, Ghana, Uganda, Kenya, South Africa, Rwanda, and the United Kingdom. In addition, this bank offers a virtual card called a Chipper card; you can use this card to conveniently make purchases online from both international and local online stores.
Tyme bank is the first digital bank in South Africa to receive a full-banking license, and they now have a large customer base with over four million customers.
Tyme digital bank was established with the notion that every South African should be able to access unlimited and affordable banking services 24/7. So this bank offers a fully digital banking platform with simplified and enhanced banking access for South Africans.
The African Rainbow Capital is a major shareholder of this bank, making Tyme bank the first black-owned digital retail bank in South Africa. Over the years, Tyme bank has helped many South Africans understand how money works and helped them attain a secure financial future.
FairMoney is one of Nigeria’s most reliable digital banks that also offers a loan platform for various types of loans. This digital bank was founded in 2017 as a loan app, but in 2021, its services were upgraded to include a credit-led, fully digital banking platform.
FairMoney offers loans for people to fund their businesses or other needs without requesting collateral; this goes a long way in making people’s lives and business operations easier.
In addition, they have obtained a microfinance banking license from the Central Bank of Nigeria and a license in India. Also, they now offer all the services you can get from a traditional bank; you can open a bank account, perform free transactions, and get a debit card.
FairMoney gives people the free access they cannot enjoy with traditional banks; you can apply for a loan and receive it in less than five minutes. So this digital bank has succeeded in gaining the trust of many people as they now have over 2 million users, and they disburse 10,000 loans daily in India and Nigeria.
Alat is the first and one of the best fully digital banks in Nigeria; it was launched in 2017 by Wema Bank. Alat was designed to match the lifestyle of today’s digital customers; you can open a free account, manage your finances better, and you will never have to revisit a bank.
In addition to the ease and convenience that Alat digital bank brings, it offers instant loans without collateral or paperwork. Moreover, you can process these loans without visiting any physical location. On Alat, you can borrow as high as 4 Million Naira in just a few minutes.
Furthermore, this digital bank offers three different cards that are free of charge and will be delivered to your location upon request. Any card you choose will allow you to enjoy the freedom of paying for anything online and performing other unrestricted financial transactions.
Are Digital Banks Different From Online Banking and Mobile Banking?
Digital banking and online banking may seem like they mean the same thing, but they do not; they have some fundamental differences.
Online banking is a banking system that allows customers of a bank to access certain services over the internet. An online banking system has to be affiliated to or connected to the core banking operations of a traditional bank.
This system helps to reduce the cost of operating a conventional bank and reduce the reliance on their staff and network. It also offers greater flexibility and convenience to the customers of a traditional bank.
Digital banking, on the other hand, provides more flexible services with expanded features, and these banks are operated as a single system independent of a physical branch. Digital banks rely on web-based services, high-level process automation, and APIs to provide highly efficient and secure banking services for their users.
Lastly, mobile banking is a banking system operated by an existing bank that allows customers to perform transactions with their mobile devices eliminating the need to visit the bank in person.
Advantages of Digital Banks
24/7 Banking Services
Digital banks offer all their services online, and you can access everything you need through their app or website anytime and anywhere. With a mobile device and an internet connection, you can manage all your finances online without needing to wait for working days and hours to visit the bank. You can also eliminate the stress of waiting in long queues like you usually do anytime you visit a traditional bank.
It Saves Time and Effort
Even though these traditional banks now offer some services online, you will still find the need to visit the bank at some point. There are also numerous things that you cannot access online until you visit the bank.
However, with digital banks, you can save yourself from unnecessary stress and time wastage of visiting banks, waiting in queues, and always relying on bank staff to manage your finances and account for you.
Highly Efficient Transactions
Digital banks are capable of processing transactions faster and more efficiently. With this speed, you can enjoy reliable cash flow and perform fast transactions anytime. In addition, these banks provide reduced reliance on paper forms since all the transactions are done electronically.
Enhanced Security and Affordability
These digital banks provide higher security for financial transactions and can ensure your money is safe at all times. In addition, you will have access to other tools to enhance security like username and password, a captcha, pin, token, etc. Furthermore, digital banks offer more efficient and flexible banking services but are still more affordable than traditional banks.
Disadvantages of Digital Banks
No Personal Relationships
Most traditional banks have branch offices in different locations so their customers can experience more personalized banking services and easily build good relationships with them. However, with digital banks, you have to do everything online without communicating with anyone from the bank or visiting the bank in person.
May Encourage Overspending
While the transaction speed, ease of use, and efficient banking tools may be great advantages for customers of digital banks, this can also quickly become a disadvantage if people enjoy all these benefits and forget or fail to manage their finances properly.
So here you have it: the top five digital banks in Africa, the pros and cons of digital banks, and what differentiates them from other banking systems.
If you have been stressed by the old-fashioned banking style offered by traditional banks, maybe it is time to try something new.
You can quickly sign up and create an account with any of these digital banks, fund your account and start enjoying free/affordable banking services. Most of these banks will also provide a debit card for you and bring them to your home. So feel free to try any digital bank on this guide to enjoy better banking services.