Africa’s financial and technology landscape is shifting rapidly, with new regulations, digital-first banking entrants, and recapitalisation requirements redefining the operating environment for businesses across the continent. From Nigeria’s Central Bank (CBN) geofencing Point of Sale (PoS) devices, to Kenya’s stricter banking capital rules, and South Africa’s Old Mutual launching a digital-first bank, the ripple effects on African businesses could be significant.

1. Nigeria: CBN’s PoS Geofencing and the Cost of Compliance

The CBN’s decision to mandate that every PoS terminal be registered within a 10-metre radius of its location introduces both opportunities and challenges. On one hand, the policy aims to curb fraud and improve transaction transparency goals that, if achieved, will boost trust in Nigeria’s payment ecosystem. For businesses, particularly SMEs reliant on PoS agents, stricter controls may create higher compliance costs and logistical headaches.

• Retailers and hospitality operators with multiple terminals may struggle to comply with the “10-metre” limit.

• Fintechs like OPay, PalmPay, and Moniepoint face a costly and complex exercise of geo-tagging millions of devices.

• Positive outcome: If fraud is reduced, businesses may benefit from higher consumer trust and smoother cross-border transactions, especially as Nigeria works to exit the FATF grey list.

2. Kenya: Recapitalisation and the Future of Banking Access

Kenya’s Central Bank is enforcing an ambitious plan to raise the minimum capital requirement for banks tenfold by 2029. For smaller banks like UBA Kenya, which are already operating at thin margins, the pressure to inject fresh capital may lead to mergers, acquisitions, or exits.

• For businesses, this could reduce the number of small, agile banks willing to lend to SMEs and startups, thereby tightening access to credit.

• For larger corporations and foreign investors, a more stable, well-capitalised banking system may inspire confidence, positioning Kenya as a strong financial hub for East Africa.

• In the short term, SMEs might face tougher borrowing conditions, but in the long term, stronger banks could deliver more competitive products and financial security.

3. South Africa: Old Mutual Bank’s Digital Push

Old Mutual’s launch of OM Bank, a digital-first platform, signals a major shift in South Africa’s retail banking market. With low fees, high savings interest, and generous credit rewards, OM Bank is challenging Capitec and targeting millions of middle-income South Africans.

• For businesses, especially SMEs and entrepreneurs, easier digital onboarding and cheaper banking services could reduce overhead costs and improve financial inclusion.

• For the fintech ecosystem, OM Bank’s scale and investment may force smaller players to innovate faster, leading to a more competitive financial services market.

• If successful, OM Bank could inspire similar digital-first banking models across the continent.

4. The Bigger Picture: African Business in Transition

Taken together, these developments highlight a continent in financial transition:

• Regulation is tightening, as seen in Nigeria and Kenya, reflecting governments’ desire to strengthen financial integrity and reduce systemic risks.

• Competition is heating up, with new entrants like OM Bank pushing incumbents to innovate.

• SMEs are at the crossroads; they will bear much of the cost of compliance and stricter capital rules, but stand to benefit from more transparent, trustworthy, and innovative banking systems.

Conclusion

For African businesses, these changes are both disruptive and promising. In the near term, compliance costs and limited credit access could strain smaller players. But in the long term, stronger regulatory oversight, digital-first banks, and improved trust in payment systems could create a more resilient business environment.

Ultimately, businesses that remain agile, embrace digital finance, and adapt quickly to regulatory shifts will be best positioned to thrive in this evolving African financial ecosystem.