How Kappa Responds to the Struggles of Business Owners in Africa

April 12, 2022 | 3-min. read

At Kappa we understand the complexity and challenges that African business owners face when making cross-border payments. We’ve spoken to hundreds of business owners across Cameroon and the United States to build a product that addresses this vexing problem. With Kappa, businesses will finally be able to make local and cross-border transactions directly from their smartphone or computer in a seamless, secure, and affordable manner.

To demonstrate how Kappa addresses the struggles African business owners face, let’s walk through four different scenarios. While everyone’s situation is different, some of the problems these people face might resonate with you.

We start with Sandrine, the owner of a busy event company in Douala. Her clients pay her with either Orange Money or MTN MoMo. Sandrine doesn’t like to have too high of a balance on her own mobile money account, due to safety concerns. So she often withdraws money from her mobile money account and then visits her bank to deposit it, which is unsafe and a hassle. The main problems that Sandrine faces relate to security and convenience.

Operating out of the port of Douala, Loic imports heavy construction machinery from the U.S., such as excavators and bulldozers. He occasionally uses MoneyGram or Western Union, but finds these services expensive and slow. Instead, Loic uses the help of a financial intermediary who he pays at the last minute, with the transaction settling in a day or two. Loic pays his intermediary in local currency, who in turn makes sure that Loic’s suppliers are paid in dollars. While this solution works, it comes with security and trust concerns, making Loic wonder if there’s a faster and safer way to do business.

Yannick has a coffee and cocoa company in western Cameroon. He pays farmers in cash for their crops, using the banking system when exporting to the U.S. His buyers have to send multiple payments for one large shipment due to transaction limits, and banking fees can be high. Often Yannick accesses a credit line for cash flow purposes, since he pays the farmers at harvest time and then has a lag before receiving income from businesses in the U.S. Yannick's main pain points are keeping track of multiple payments and the costs associated with bank transfers.

Jacqueline was born in Yaoundé and now lives in Chicago. She’s joined several family members investing in real estate projects in the Cameroonian capital. To secure a good deal, she has to get money back home fast. Jacqueline usually makes a bank transfer in dollars to a financial intermediary in the U.S. (who in turn works with an intermediary in Cameroon to purchase the property in local currency). Sometimes she simply brings cash on the plane with her, taking an extra trip to Yaoundé. Jacqueline is forced to use an unsafe way of getting money back home that exposes her to personal risk.

In the above scenarios, Cameroonians and expats rely on a complex mix of mobile money, cash, banks, and informal intermediaries to conduct financial transactions. Kappa’s vision is to make everyone’s lives easier by eliminating these frictions and reducing the time and cost associated with cross-border money transfers.

With Kappa, Sandrine can receive payments from her customers and transfer those earnings directly to her bank account. Loic can pay his machinery suppliers in dollars. Yannick can receive large payments for his coffee and cocoa produce. And Jacqueline won’t have to travel with huge sums of cash, enabling her to invest more in her country.

Kappa’s ambition is to look beyond payments and provide the tools and technology that these young entrepreneurs need so they can make their business models — and their personal ventures — more successful.