Lessons from India, Opportunities for Africa: Part 1 — Can Africa Build Its Own ‘Fintech Stack’?

By Adrienne Henderson and Johan Bosini

As Africa continues its digital transformation, the need for robust, scalable, and inclusive digital infrastructure has never been greater. Across the continent, fragmented payment systems, limited interoperability, and high transaction costs remain barriers to financial inclusion. However, a powerful blueprint for overcoming these challenges exists in India’s digital public infrastructure (DPI) model.

Over the past decade, India has built an innovative, government-supported technology stack that has revolutionized payments, identity verification, data privacy and access, and financial services delivery. The success of systems like the Unified Payments Interface (UPI), Aadhaar and Account Aggregator (AA) provides valuable lessons for Africa as it seeks to build its own digital economy.

At Quona we have the luxury of having a global view, with local teams investing across LatAm, Africa, MENA, India and Southeast Asia, all observing the progress of our ecosystems in real-time. We recently hosted a group of aligned stakeholders from around the world in Bangalore to explore the fintech ecosystem in more depth. Here are some key lessons from India’s digital transformation that can be applied to other markets, including Africa.

In the first installment of this series, we’re diving into a foundational question: If India’s Fintech boom was enabled by its powerful digital infrastructure, can Africa do the same?

The big question: Can Africa create its own version of India’s “tech stack” at a regional or continent-wide level — a shared digital infrastructure that makes payments seamless, financial services accessible, and fintech innovation faster? Let’s break down what worked in India, how Africa compares, and what steps are needed next.

India’s Fintech Playbook: What Worked?

India’s fintech success was not just about innovation — it was about infrastructure.

1. A Foundational Digital Identity System

India’s Aadhaar program is one of the most ambitious digital identity systems in the world, enabling over 1.3 billion people to seamlessly access financial services, government benefits, and digital platforms. By providing a unique, biometric-based ID, Aadhaar has drastically reduced onboarding friction, increased financial inclusion, and streamlined service delivery across sectors.

📢 Deepak Shenoy, Founder & CEO of Capitalmind, captured its impact at our trek:

“Aadhaar has been truly transformative — what once took three days can now be done in minutes.”

For Africa, where millions remain unbanked due to a lack of formal identification, a robust, interoperable digital ID system could be a game-changer. While innovative startups like SmileID, OkHi, and TruID are working to solve this challenge in select markets, scalability and cross-border recognition remain major hurdles.

Nigeria presents a compelling case study. The country has two parallel ID systems — the Bank Verification Number (BVN), a highly efficient identifier used across the banking sector, and the National Identification Number (NIN), the government’s official national ID. BVN, despite being industry-led, has become the de facto ID for many services, while the government continues efforts to expand and digitize NIN.

📢 Razaq Ahmed, CEO of Cowrywise, a Nigerian wealth management platform democratizing access to investments, explains:

“Nigeria’s banking industry has successfully harmonized identity infrastructure through BVN, making customer verification seamless. The national ID (NIN) is catching up, but its adoption within Nigeria and interoperability across Africa remains a challenge.”

Beyond efficiency, a well-structured digital identity system has the potential to unlock financial access, enable seamless cross-border transactions, and create new economic opportunities. Could Africa replicate this success with its own scalable, interoperable digital ID system? Or will fragmented policies and national interests continue to hinder a truly borderless financial ecosystem? The impact of getting this right could be profound.

2. Interoperable, Low-Cost Payment Rails

India’s Unified Payments Interface (UPI) transformed financial access by enabling real-time, low-cost transactions between banks, businesses, and fintechs. In 2023 alone, UPI processed 100+ billion transactions, leapfrogging credit card adoption and making digital payments universal.

Africa, meanwhile, remains fragmented, with mobile money platforms like M-Pesa and MTN Mobile Money operating in silos. A pan-African interoperable payments system, similar to UPI, could drive seamless, real-time transactions while reducing costs.

But political and regulatory complexity pose major hurdles.

“India had one central bank, one currency, and one payments clearinghouse. Africa has 54 countries, 42 currencies and 41 central banks — all that generally have or have plans to implement domestic clearing house structures. Getting alignment is a massive challenge.”

— Charles Niehaus, payments expert & former Visa executive.

Some companies, like Onafriq and TerraPay, are bridging the gap, while regional payment hubs are emerging:

• SADC’s TCPIP (Southern Africa)
• WAEMU’s PCR (Francophone West Africa)
• EAC’s Instant Payments Framework (East Africa)

Still, cost remains a barrier. Cross-border fees can reach 10%, making cash a cheaper alternative. But this inefficiency creates an opportunity, as Monica Brand Engel — Quona co-founder notes:

“As we have seen in the telecom space and other fields, there is an opportunity for well designed technology to link disparate systems, take friction out of the user experience and ignite digital commerce.”

Examples from Quona’s own portfolio include payment orchestration, multi currency wallets and banking as a service. More than improved quality and better user experience, these technologies can truly enable and expand economic activity that previously was cost prohibitive.

Recall, the India Stack (including Aadhar, UPI and other components) was the result of a collaboration amongst forward thinking policy makers, successful founders and technologists working under the auspices of an independent private non-profit body. The economic flourishing that India has enjoyed in the last decade was built on this foundation.

For Africa to better leverage emerging fintech technologies requires:

✅ Regulatory experimentation — including sandboxes and regional collaboration

✅ Lower transaction costs — including technology innovation and economic incentives to encourage adoption

✅ Public-private collaboration — with both mainstream financial institutions and fintechs — to drive scale

The potential on the continent is massive but experimentation must start at a country and regional level. And — of course, technology alone doesn’t build infrastructure — people do. India’s success was enabled by a pool of local talent, many of whom contributed pro bono via organizations like iSPIRT. For Africa to do the same, investments in digital talent and local technical leadership will be as crucial as the code itself.

3. Open and Inclusive Financial Infrastructure

A big reason India’s fintech ecosystem took off was its open, shared infrastructure — India Stack. At its core, India Stack is a set of government-backed, interoperable digital tools that include biometric digital ID (Aadhaar), a real-time payments system (UPI), and open APIs that allow developers to build financial services on top. This infrastructure enables seamless authentication, instant payments, and secure data sharing — creating a digital foundation that startups, banks, and institutions can plug into. The result? Faster innovation, lower costs, and broader financial access.

Africa could follow a similar path. Open banking frameworks and shared APIs could reduce fragmentation and level the playing field for innovators across the continent. But of course, it’s trickier here. With 54 countries, multiple regulators, and varied tech readiness, replicating a unified model like India’s is no easy feat.

📢 As Hillary Miller-Wise of the Gates Foundation put it:

“Africa can draw powerful lessons from India’s digital public infrastructure — especially the combination of digital ID, real-time payments, and open platforms to drive financial inclusion. But unlike India, African markets will need to navigate greater market fragmentation and weaker infrastructure. Key to this will be building national and regional interoperability, and investing in inclusive solutions that meet Africans of all income levels where they are.”

The Gates Foundation has been supporting efforts like Mojaloop, an open-source digital payments platform designed specifically for emerging markets. It’s not yet achieved India Stack-level ubiquity — but the promise is there. As the Foundation noted, “Mojaloop is designed not just to support a single country’s digital payments system, but to help build a payments ecosystem that’s inclusive, resilient, and interoperable across borders.” (Gates Foundation, 2024)

The building blocks exist. But to get from here to there, Africa will need strong public-private coordination, real investment in foundational systems, and a willingness to experiment — across borders.

4. Government-Led but Private Sector-Enabled: A Blueprint for Enabling Fintech

A critical factor behind India’s fintech success has been its robust public-private partnership model. The government established essential digital infrastructure — such as Aadhaar for identity verification and the Unified Payments Interface (UPI) for real-time payments — while fintech startups and financial institutions developed user-friendly applications and innovative services on top of these platforms. This collaborative approach drove rapid adoption, competition, and financial inclusion at scale.​

Africa could unlock similar opportunities by adopting a model where governments build interoperable, open-access financial infrastructure, allowing the private sector to innovate upon it. While mobile money has revolutionized payments across the continent, many systems remain fragmented and proprietary, limiting their full potential.​

Kenya’s M-Pesa exemplifies this model in action. Launched by Safaricom in 2007, M-Pesa has significantly boosted financial inclusion in Kenya, increasing it from 26% in 2006 to 84% in 2021. Over time, startups and businesses have developed solutions on top of M-Pesa’s payment rails, expanding its use cases from peer-to-peer transfers to lending, insurance, and merchant payments. However, unlike India’s UPI, M-Pesa is not an open-access government-backed system; it remains a closed-loop ecosystem controlled by a private entity.​

Reflecting on M-Pesa’s journey, Michael Joseph, former CEO of Safaricom, noted that initial skepticism labeled the service as a “stupid concept,” but it has since evolved into a transformative financial platform.

“It was unheard of for people to trust a mobile operator with their money, but we carefully built confidence in M-Pesa, and it rapidly grew into a financial service that is relied upon by millions of customers every day.”

— Michael Joseph, former CEO of Safaricom

(Source: How M-Pesa was created and how it changed people’s lives, Vodafone, 2020)

Kenya’s M-Pesa is a compelling example of a private-sector-led payment ecosystem that enabled innovation — but its proprietary nature highlights the limits of closed-loop systems. South Africa, however, may offer a new playbook rooted in government-led open rails that could serve the region.

The South African Reserve Bank is actively pushing forward the creation of a new set of payment rails — what some call a “Faster Payments Network” — to reduce cash in the economy and enable seamless, QR-code-based transactions at the point of sale, even for small merchants. The ambition is to reduce the country’s reliance on cash by 20% by the end of the fiscal year and to open participation to non-banks for the first time.

📢 According to Andre Hugo, CEO of Spot Money:

“The biggest hurdle is around KYC and electronic KYC — but the government has made a call to drive a unified eKYC module in South Africa. If implemented successfully, it will significantly lower the cost of customer acquisition for fintechs and enable broader participation in the formal economy.”

This initiative is being accompanied by legislative reform, including amendments to allow non-banks to directly access national payment infrastructure. These efforts are laying the groundwork not only for improved domestic financial inclusion, but for cross-border integration as well.

Hugo explains that the government’s cross-border ambitions are already taking shape:

“There’s roughly $3B a year in cross-border remittances from South Africa to neighboring countries. The goal is to shift the lower value transactions to TCIB and ultimately onto the same real-time payment network we’re building domestically — lowering costs for consumers and expanding access across the SADC region.”

If South Africa can successfully implement and scale this infrastructure, it could become a powerful model for neighboring countries — offering the SADC region a foundation for a shared, inclusive digital financial system. Much like India Stack, it shows how government leadership, combined with private sector innovation, can drive transformation. Can this model provide a critical pilot for similar programs in other blocs on the continent? We’ll have to wait and see.

What’s Next for Africa?

Africa is already making important strides toward building interoperable payment systems and digital identity solutions, with several country-led initiatives paving the way. Nigeria’s eNaira, Ghana’s GhanaPay, and Kenya’s Huduma Namba digital ID program are promising steps toward digitizing financial services. Meanwhile, Tanzania has quietly advanced interoperability between telecom operators, allowing seamless mobile money transactions across networks — a model that could be expanded across the continent.

However, to unlock the full potential of digital infrastructure, regional collaboration is essential. The African Continental Free Trade Area (AfCFTA) presents an opportunity to harmonize regulatory frameworks and create a pan-African digital ecosystem, similar to how India built its Digital Public Infrastructure (DPI) model. A region- or continent-wide “Africa Stack” — with interoperable payment systems, digital identity frameworks, and shared fintech infrastructure — could drive financial inclusion, reduce inefficiencies, and accelerate economic growth.

The Call to Action

For policymakers, fintech leaders, and investors, the opportunity is clear: Africa stands to benefit immensely from a shared, open, and interoperable digital infrastructure that supports inclusive, scalable financial services. The question is not whether Africa can adopt India’s digital playbook, but how it can adapt it to fit the continent’s unique needs.

What do you think? Can Africa overcome its highly fragmented regulatory landscape to build a common financial infrastructure, or are there too many competing interests for alignment? Can we move beyond theory and turn this academic opportunity into reality?

What’s Next in This Series?

• Article 2: From Global Dependence to Local Power: Building Africa’s Own Capital Markets
• Article 3: Tapping into Africa’s Young, Digital-First Workforce

🚀 What are your thoughts? What lessons from India could apply to Africa? Drop a comment or reach out!

Disclaimer: Any Quona portfolio companies mentioned in this piece were selected based on objective, non-performance-based criteria for the purpose of illustrating the types of investments made by Quona funds and their impacts. Profiles are being provided for illustrative purposes only, in order to provide examples of the idea generation, research, and thought process of Quona investment teams. No representation is made as to whether or if the investment ideas represented in these profiles have been or will be profitable. It should not be assumed that Quona will be able to identify similar investment opportunities in the future, or that any such opportunities will be profitable. The above statements include the opinions of the Firm and are for illustrative purposes only. There is no assurance that any trends depicted or objectives described in Quona profiles will continue or become successful.