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- Embedded finance in telecom: The next billion-dollar opportunity
Across Africa, telecommunications companies have moved far beyond selling minutes and megabytes. Even so, connectivity revenues are under structural pressure: intense price competition, rising spectrum and energy costs, and the capital intensity of 4G expansion and 5G planning.
At the same time, the continent’s economic reality - large informal sectors, underbanked populations, and SME-heavy value chains - creates a distinctive opening for telcos to become the primary distribution of rails for financial services.
In that context, embedded finance in telecom is less a “nice-to-have” adjacency and more a platform strategy: integrating payments, credit, savings, insurance, and merchant services directly into telco channels (apps, USSD, agent networks, and enterprise portals).
For African MNOs, this is already proven at scale through mobile money; the next wave is about moving from P2P transfers and bill pay into embedded credit, B2B commerce, cross-border flows, and ecosystem marketplaces that compound ARPU and reduce churn.
The African starting point: Why telcos are structurally positioned to win
African telecom operators enter embedded finance with assets that are unusually decisive in emerging markets:
1. Distribution at national scale: Millions of subscribers, deep rural reach, and retail/agent footprints that extend beyond bank branches.
2. Trust and habitual payments: Airtime/data top-ups and postpaid billing relationships provide repeated payment moments.
3. Behavioral and network data: Usage, tenure, recharge cadence, device signals, and location stability enable alternative risk models.
4. Operational leverage: SIM registration programs, KYC processes, and agent management can be extended to financial onboarding.
For many African markets, the practical question is not whether embedded finance works - it already does - but how to expand the value-per-customer beyond basic transfers, and how to industrialize integrations so the telco can partner with banks, fintechs, insurers, merchants, and government programs at speed.
Commercial outcomes that matter for African MNOs
Raising ARPU with embedded payment and merchant services
In many African markets, payments are not only a consumer product; they are an ecosystem enabler. When a telco embeds payments into day-to-day commerce - merchant QR/USSD payments, salary disbursement, school fees, utilities, and marketplace checkout - it unlocks multiple revenue lines:
- Transaction revenues: Fees on cash-in/cash-out, transfers, and merchant payments (subject to local caps and rules).
- Float and treasury economics: Interest in permissible balances and improved working-capital dynamics, within regulatory constraints.
- Merchant value-added services: POS/soft POS, reconciliation, analytics, invoicing, and loyalty programs.
- Enterprise payments: Collections and disbursements for corporates, agribusinesses, and gig platforms.
Because these services increase the number of weekly “reasons to engage,” they also raise the effectiveness of cross-sell for data bundles, device financing, and content.
Reducing churn by making the telco financially “sticky”
In price-sensitive prepaid markets, churn can be driven by small differences in bundle value. Embedded finance changes the switching calculus. If a subscriber uses the telco wallet for everyday payments, receives remittances into it, relies on it for emergency credit, and runs micro-insurance through it, the telco is no longer a commodity provider - it becomes embedded in household cashflow management.
This stickiness is especially strong where the telco agent network is the most convenient cash access point.
From mobile money to embedded finance: The next use-case frontier
African telcos often start from a mobile money foundation. The “next frontier” is to integrate financial products into non-financial journeys so that finance becomes contextual and invisible:
Low Earth Orbit (LEO) satellites operate at altitudes between 500 and 1,200 kilometers. The round-trip signal delay drops to 20 to 40 milliseconds - fast enough for real-time payment processing, video calls, and the kind of interactive banking sessions that fintech platforms require.
- Embedded credit at checkout: micro-loans, pay-in-3, and working-capital lines triggered by purchase intent.
- Insurance embedded into device, travel, and health moments: low-premium, high-frequency micro-insurance.
- SME financial tooling: merchant acquiring + cashflow-based lending + payroll + tax/levy payments.
- Cross-border remittances and trade flows: inbound diaspora remittances, regional transfers, and SME cross-border settlement.
Because these services increase the number of weekly “reasons to engage,” they also raise the effectiveness of cross-sell for data bundles, device financing, and content.
Case study: Enabling fintech scale for an African telco
See how Torry Harris supported Tigo Fintech Africa as it advanced its fintech journey.
Transforming the commercial landscape: B2B and digital marketplaces in Africa
Beyond consumer wallets, the highest compounding opportunity is often B2B: digitizing supply chains where cash, reconciliation friction, and working-capital gaps suppress growth. For African telcos with enterprise relationships and distribution reach, a B2B digital marketplace can become a strategic platform for commerce and embedded finance.
Why a B2B digital marketplace is uniquely relevant in African economies
Many African SME ecosystems operate with fragmented procurement, limited formal credit, and manual reconciliation. A telco-led marketplace can aggregate demand, connect SMEs to wholesalers and service providers, and embed financial services directly into procurement and operations:
- Procurement + pay integrated ordering and payment, including escrow-like controls where required.
- Trade finance: short-tenor credit lines anchored in verified orders and historical cashflow signals.
- Collections and disbursements: enabling wholesalers to collect digitally and pay distributors/agents efficiently.
- Digital services bundling connectivity, cloud, cybersecurity, IoT, and collaboration tools packaged for SMEs.
Under frameworks such as the African Continental Free Trade Area (AfCFTA), marketplace models can also support regional trade by standardizing partner onboarding and enabling interoperable payments where regulations and schemes permit.
Digital marketplace platform capabilities that matter for African telcos
A viable digital marketplace platform for African contexts typically requires:
- Multi-channel access: App-first where smartphone penetration supports it, but with USSD/WhatsApp-assisted journeys for reach.
- Identity and KYC/KYB: Tiered KYC for consumers and robust KYB for merchants and suppliers.
- Settlement flexibility: Mobile money, cards, bank transfers, and cash-based reconciliation via agents where needed.
- Partner lifecycle management: Onboarding, contract management, compliance checks, and performance monitoring.
- Order orchestration: Partial fulfillment, multi-vendor baskets, and logistics integration.
High-impact consumer use cases in Africa
Device financing and usage-linked repayment
Smartphone affordability remains a constraint in many markets, but it is also a lever for digital inclusion and data growth. Embedded financing can support device acquisition through installment models that align to prepaid behavior - using tenure, recharge patterns, and wallet history to calibrate limits and repayment schedules.
Where permitted, device management controls can reduce default risk, while transparent terms and consumer protection guardrails are essential for long-term trust.
Micro-insurance at scale through telco channels
Micro-insurance can be embedded into moments when the telco already owns SIM activation (personal accident cover), handset purchase (device protection), or recurring bundles (health and life add-ons).
The decisive advantage is distribution: simple enrollment, small premiums, and automated collections via wallet or airtime (subject to regulation) can unlock a scale that traditional insurers struggle to reach.
Case study: Digital insurance expansion through telco channels
Explore how Torry Harris supported MILVIK in expanding digital insurance programs in africa.
Merchant payments: moving from cash to acceptance networks
In cash-dominant environments, the hard problem is merchant acceptance and reconciliation, not only the payment of rail. Telcos can grow merchant networks by bundling acquiring with connectivity, providing low-cost acceptance options, and embedding merchant dashboards into existing telco business apps.
The objective is to make acceptance easy for micro-merchants and valuable for SMEs through analytics and credit offers tied to real sales data.
The data advantage: Alternative credit and financial inclusion
African credit markets often suffer from limited bureau coverage and thin files, particularly for informal workers and micro-enterprises. Telcos can contribute to financial inclusion by building alternative credit scoring models based on consented, privacy-compliant signals - recharge regularity, wallet cashflow, network tenure, and usage stability - combined with merchant and marketplace transaction histories.
The most sustainable approach is to use these models to improve risk decisions while maintaining transparency and fairness: clear disclosure, dispute mechanisms, and safeguards against over-indebtedness are central, especially as regulators and consumer advocacy intensify scrutiny.
Technology foundations for African telco embedded finance
Execution depends on modernizing integration and creating a platform layer that can support high-volume transactions, real-time risk decisions, and rapid partner onboarding.
In African environments, additional constraints - intermittent connectivity, multi-country operations, and heterogeneous regulatory requirements - make architecture choices even more consequential.
Banking-as-a-Service and partnership models
Some telcos pursue licenses (e-money, payments, lending), while others rely on bank/fintech partnerships. Banking-as-a-Service (BaaS) and modular fintech components can shorten time-to-market: the partner manages regulated ledgering and certain compliance obligations, while the telco owns distribution, customer experience, and ecosystem strategy.
The optimal model varies by country and product, and multi-country groups often need a portfolio of approaches.
API-first financial infrastructure
To avoid brittle point-to-point integrations, African telcos benefit from API-first capabilities that unify access across channels (app, USSD, agent), internal systems (CRM, billing, charging), and partner ecosystems (banks, insurers, payment processors, remittance partners). This enables faster product iteration and supports marketplace growth by making onboarding repeatable rather than bespoke.
How Torry Harris can help African telcos capture embedded finance value
For African telcos, embedded finance and marketplace strategies become execution-heavy quickly: multi-partner integrations, multi-channel journeys, and financial-grade reliability layered on top of legacy BSS/OSS. Torry Harris can help by strengthening the integration and platform foundation that accelerates time-to-market and reduces complexity as the ecosystem scales.
Digital marketplace platform services (B2B and B2B2X)
- Marketplace integration blueprint: Designing the integration model between marketplace components (catalog, pricing, offers, inventory, fulfillment) and telco enterprise stacks.
- Supplier and merchant onboarding: Patterns for KYB, contract flows, partner lifecycle management, and compliance checks aligned to local requirements.
- Order-to-activation orchestration: Coordinating multi-vendor orders, provisioning/activation for digital services, and service assurance across internal and third-party systems.
- Payments and settlement integration: Supporting integration with mobile money, banks, card schemes, and payment gateways - plus commissions, refunds, and reconciliation workflows needed for marketplaces.
API integration services for telcos
- API design and implementation: Standardizing contracts, versioning, and reuse so partners and channels integrate consistently.
- Legacy modernization through APIs: Exposing CRM, billing, charging, order management, identity, and wallet capabilities as governed by APIs without disruptive rewrites.
- Security and policy enforcement: Authentication/authorization patterns, throttling, and runtime policies suited for financial-grade workloads and partner ecosystems.
- Testing and operational readiness: Sandboxes, automated testing, monitoring, and incident readiness for high-volume, low-latency payment and lending journeys.
API productization and ecosystem enablement
- Governance and lifecycle management: Standards, review gates, and operational KPIs that make APIs dependable for products.
- Developer experience: Documentation, samples, and onboarding flows that reduce partner integration time.
- Observability and compliance-by-design: Audit trails, monitoring, and controls aligned with privacy expectations and AML/KYC operating models.
Explore relevant case studies
Navigating the African risk and regulatory landscape
Embedded finance intensifies regulatory exposure. African telcos operate across jurisdictions with varying rules on e-money, agent networks, interest on float, consumer fees, data residency, and cross-border transfers. Effective execution demands early alignment between product, legal/compliance, risk, and technology teams.
Key risks to manage
- Fraud and identity risk: SIM swap, social engineering, and agent fraud require layered controls, real-time monitoring, and strong customer education.
- Credit and conduct risk: Digital lending can scale faster than risk governance; affordability checks, limit discipline, and collections of ethics are critical.
- Operational resilience: Payments and wallets are mission-critical; downtime erodes trust rapidly and attracts regulatory scrutiny.
- Interoperability and scheme dependencies: Integration with national switches, regional payment initiatives, and bank rails can introduce external reliability constraints.
Compliance considerations
Core obligations typically include KYC/KYB, AML/CFT controls, sanctions screening where applicable, transaction monitoring, record retention, dispute management, and data privacy compliance.
Multi-country operators must also manage differences in tiered-KYC rules, permissible fee structures, and reporting formats - often requiring configurable compliance workflows rather than one-size-fits-all implementations.
Actionable execution strategy for African MNOs
1. Anchor on priority corridors and segments: Identify the highest-volume payment corridors (merchant clusters, salary routes, remittance corridors) and build products around them.
2. Build multi-channel reality: Ensure parity across apps, USSD, and agent journeys; do not assume smartphone-only access.
3. Expand from payments into contextual credit: Use wallet and merchant data to introduce responsible credit where it reduces friction in commerce (device, inventory, school fees).
4. Industrialize partner onboarding: Treat integrations as a repeatable capability - API productization, sandboxes, documentation, and certification processes.
5. Design for resilience and fraud prevention from day one: Implement monitoring, limits, step-up authentication, agent controls, and incident playbooks before scaling volumes.
Conclusion
For African telcos, embedded finance is not merely an adjacent revenue stream; it is a platform path from connectivity to economic infrastructure. The opportunity spans consumer payments and lending, merchant acceptance networks, SME enablement, and B2B marketplaces that digitize supply chains.
Winners will be operators that combine distribution and trust with modern API-first integration, disciplined risk management, and partnership models that accelerate product delivery across diverse regulatory environments.
Executed well, embedded finance in telecom can unlock sustained ARPU growth, strengthen retention, and position African MNOs as foundational players in the continent’s digital commerce and financial inclusion agenda.
Next step
Want to see what this can look like in practice? Review the case studies above and use them to benchmark your own embedded-finance and marketplace roadmap.
Read the case studies: Tigo Fintech Africa | MILVIK digital insurance expansion
Other resources
Frequently asked questions
Embedded finance is the seamless integration of financial services—such as lending, payment processing, insurance, or banking—directly into non-financial platforms, apps, or websites. It allows companies like retailers, software providers, or rideshare apps to offer financial tools at the point of need, creating a "one-stop shop" experience without customers needing to use a traditional bank.
What is banking as a service (BaaS)? Banking as a Service (BaaS) is what makes embedded finance possible. BaaS allows non-bank businesses such as SaaS platforms to use a licensed bank's infrastructure to offer financial products through APIs and modular components.
Embedded finance includes: payment processing, lending, invoice finance, insurance, and even investing.
Rather than choosing between open banking and embedded finance, banks should treat them as complementary tools. Open banking provides the secure, regulated infrastructure for data and services, while embedded finance delivers seamless customer experiences across 3rd-party platforms.
The difference is in the industries they're adopted by. Embedded finance integrates financial services into non-financial business processes, while embedded fintech integrates fintech solutions into the processes of an institution in the finance industry.