Union54, a Zambian card-issuing fintech, has raised $12 million in a seed extension round led by Tiger Global, with additional support from Vibe VC, Earl Grey Capital, and Not Boring Capital. This comes just six months after its initial $3 million seed funding.Union54 provides an API enabling African companies to issue and manage debit cards without relying on banks or third-party processors. Since its launch in October 2021, the company has issued over 500,000 virtual debit cards and processed millions in transaction volumes.
Addressing Broader Payment Challenges
The startup initially focused on simplifying the process of issuing debit cards but quickly identified more significant challenges in Africa’s payment ecosystem, such as long settlement times for card transactions and difficulties in accessing foreign currency. These realizations have inspired Union54 to work on creating a local card scheme tailored to African merchants and consumers.
A card scheme acts as a payment network linked to debit or credit cards. Globally, Visa and Mastercard dominate the market, but Union54 aims to establish a local alternative that addresses the unique needs of African merchants.
A Vision for Africa’s Financial Independence
Union54’s CEO, Perseus Mlambo, highlighted the vulnerabilities African merchants face due to reliance on international card schemes. Recent geopolitical events, such as Visa and Mastercard’s withdrawal from Russia, underscore the importance of regional payment autonomy.
“The world is realigning itself, and Africa must build its payment infrastructure,” Mlambo said. “Current card networks are not optimized for African merchants, with local debit card settlements taking three days and international cards taking even longer.”
Building Trust and Collaboration
Union54’s approach involves collaboration with central banks across Africa. By the end of the year, the company aims to partner with nine central banks to create a framework for trust and settlement agreements, setting the stage for a pilot in 2023.“Developing a card scheme is not just a technical challenge; it’s about building trust—trust that merchants will be paid on time, that currency conversions won’t erode value, and that consumers can rely on the system,” Mlambo explained.
The Path Forward
If successful, Union54’s card scheme could integrate more local payment methods and reduce settlement times, fostering financial inclusion and efficiency. The initiative reflects a growing trend in Africa toward developing independent financial infrastructure.
As the startup progresses, its success could inspire similar efforts across the continent, reshaping Africa’s payment landscape and strengthening its economic resilience.
