Enza raises $6 million as African banks look to strengthen their payment systems

A bank does not have to build its own payment technology every time it wants to introduce a new way for customers to pay. That is the business Enza is targeting with its latest $6 million funding round. The payments technology company wants to help African banks connect to card networks, mobile wallets and local payment systems without having to develop separate connections for each one.

Enza raised the money in a Seed+ round led by 4DX Ventures. British International Investment (BII) joined as a new investor, while existing backers Quona Capital and Algebra Ventures also participated. The company was founded in 2022 by Hany Fekry and Hamish Houston, both former executives at Network International.

Its platform sits behind the payment services offered by banks and fintech companies. A financial institution can use it to connect to international networks such as Visa and Mastercard, as well as local systems including Verve in Nigeria, AfriGo in South Africa and Meeza in Egypt.

Enza also connects to domestic payment infrastructure such as Nigeria's NIBSS, South Africa's PayShap and Egypt's InstaPay.

The idea is to give banks access to several payment networks through one integration instead of having to build and maintain each connection separately.

Banks are buying technology rather than building everything themselves

Payment companies have spent years building services that allow merchants to accept digital payments. Paystack, Flutterwave and Moniepoint are among the businesses that have established themselves in this market. Enza is taking a different route. It wants banks and other financial institutions to use its technology to run and expand their own payment services.

This matters because banks already have relationships with millions of customers and merchants. What they need is the technology to support the different ways those customers want to make payments. Enza charges its clients according to the transactions processed through its platform. The company says its contracted monthly transaction volumes have been growing by between 35% and 40% month on month.

It currently serves banks and fintech companies in 12 countries, with offices in Egypt, South Africa, Ghana and Nigeria. In September, it also began commercial operations in Ghana after receiving a Payment Service Provider Enhanced licence from the Bank of Ghana.

Will businesses pay less to accept payments?

For SMEs, the cost of accepting payments is more important than the technology running behind the scenes. A retailer processing hundreds of card transactions needs to consider transaction fees, settlement times and the cost of payment equipment. Online businesses face similar concerns when choosing payment providers. Enza says its platform can help banks reduce the cost of payment acceptance and offer more options to merchants.

But there is an important distinction between a bank spending less on payment technology and a merchant paying lower transaction fees. The savings do not automatically reach the business owner. Digital payment records could also give banks a better view of how a business performs. Regular sales and transaction information can help when assessing applications for financial products, including business loans. However, access to that information does not guarantee that a business will qualify for credit.

British International Investment is among the investors backing Enza. Chirantan Patnaik, BII's Head of Disruptive Ventures, said the company's technology could help financial institutions lower costs and extend services to more SMEs.

Enza wants to expand its reach

The $6 million will be used to enter additional African markets, secure more licences and develop the company's technology. Enza is competing with established payment infrastructure providers, including Interswitch and Flutterwave. These businesses already have relationships with financial institutions and merchants across several African markets.

The difference in Enza's approach is that it wants to become part of the technology banks use to deliver their payment services. Its growth will depend on how many financial institutions sign up, how much business they process through the platform and whether Enza can maintain those relationships as it enters more markets.

For merchants, the bigger question is whether banks will use this technology to offer better-priced payment services. Until that happens, the investment is mainly a development in the business of running payments, rather than an immediate change for the SME accepting money from customers.