Union54, a spin out of challenger bank Zazu, is enrolling in Y Combinator with plans to release Africa’s first card-issuing API, according to TechCrunch.
The company, which draws its name from the 54 countries comprising Africa, has the advantage of coming from Africa’s first Mastercard Principal Member issuing bank.
Zazu attained that Principal member designation, which granted it more power than standard card providers and allowed it to provide credit cards and transaction processing services. This allows Union54 a unique advantage, especially in Africa, where no other startups have put extensive effort into card-issuing services.
“We’ve now used our membership to be able to help other companies, any African fintech who wants to issue their own cards. They can just come to us, plug into our APIs, and move quickly, without needing to spend a long time negotiating,” founder Perseus Mlambo told TechCrunch.
This ability means that spun-out Union54 is capable of providing debit and credit cards to fintechs or businesses through a number of API processes, with the company planning eight different use cases for its API.
These include ledger-based, acquirers/gateways, BNPL, credit unions, delivery companies, digital banking, credit card management and corporate cards.
Launched in August 2020, Union54 is described as an initiative to create a union of fintechs across Africa all operating the same product and owning equity in the union, according to Mlambo in an interview with Disrupt Africa.
The API-platform will allow members to design their own cards, set the currency of use and establish lists of who can use the cards and for what purpose. The ability to manage card member lists and usage terms means clients can customize their cards for their exact needs, without having to spend hundreds of thousands of dollars or wait months for partner banks to issue cards.
I always tell people, we’re now in the golden generation of African fintech. So it’s really the perfect time for a card-issuing product to be able to work with all of these guys considered leaders in their space. It means we really do have something that people want to use every day,” Mlambo said in the TechCrunch interview.
In other recent fintech news, Indian neobank Jupiter raised a $45 million Series B co-led by Nubank, Global Founders Capital, Sequoia Capital and Matrix Partners. Financial insight platform Zeni also raised a $34 million Series B.