Santimpay: Venmo for Ethiopia

Biography:

Tensaye Desalegn is the founder of Santimpay, an Ethiopian fintech startup.

Santimpay digitizes Ethiopia’s economy by building point-of-sale (POS) machines, online payment gateways and QR code payment methods. Launched a little over two years ago, Santimpay claims it processes close to $2M daily.

What did you do before launching Santimpay?

I ran a software development company. We developed applications such as e-commerce marketplaces and ride-hailing platforms for the Ethiopian market. We kept running into the same problem: online payments.

Ethiopian online businesses were hindered by their inability to process online payments. Santimpay is my attempt at fixing that problem.

What are Santimpay’s main products?

First, we design and sell physical POS devices. These are the machines you tap your card or your phone on when paying for your Starbucks order. There’s demand for these devices because Ethiopian banks have been issuing more and more cards, so local merchants need to process this new form of payment. Most POS machines sold in Ethiopia are foreign; they aren’t adapted to local networks and suffer from high transaction failure rates. This hurts merchants. We’re developing a more reliable, locally-relevant POS device.

We’re also building a “QR code or soft POS” merchants can use instead of a physical POS. You might ask why we’re pushing two seemingly competitor products. Physical POS machines are easy to sell because merchants and consumers understand how they work. However, they are expensive. On the other hand, QR code payments are new to Ethiopia and necessitate user education, but they are cheaper to implement. Both products make sense.

Our QR code product also solves an adjacent problem for merchants already using QR codes. Today, merchants need one QR code per payment method (M-Pesa, mobile money, bank…). To receive these payments, merchants have to open individual accounts in all of them. Our QR code streamlines and aggregates all of this: merchants can receive payments from all local payment methods and get paid to their primary bank account.

Second, we’re building a unified payment interface (UPI). This is comparable to what Pix has built in Brazil or to what UPI has built in India. To put it simply: we’re connecting APIs between Ethiopian banks. By doing so, we facilitate and speed up transactions between these institutions. This means that transactions between these banks’ account holders (consumers and merchants) are cheaper and faster. The Santimpay app is the starting point for such transactions.

Third, we offer a payment gateway to customers and online retailers. The lack of payment channels in Ethiopia makes it challenging for internet businesses to expand. We began offering payment gateways to internet retailers in response to this issue. This contributes to growing Ethiopia’s e-commerce market.

We aren’t dogmatic about our products: we follow market demand. Maybe we’ll become a bank, maybe we won’t. Nothing is set in stone.

Double-click on UPI. In Brazil and India, the government built the system. But you’re doing it as a private company. Why?

The Ethiopian central bank (NBE) is working on its own UPI but we took the initiative first. They are still in the development stage. Ethswitch, a group of Ethiopian banks, is rolling out similar infrastructure.

This doesn’t worry us; once the government’s UPI is up and running, we’ll integrate it into our infrastructure as an additional payment method.

You’ve launched some adjoining products, such as “event management”. Why?