The cost of intra-regional trade in Africa is the highest of all developing regions in the world, preventing the transfer of wealth within the region. The diverse number of currencies and incompatible financial systems have made moving money around for individuals and businesses slow and tedious. Concurrently, strict due diligence, high transaction fees, and time in the global traditional financial system have cut off access for many Africans on the continent and internationally. Therefore, many Africans depend on virtual dollar cards to pay for online services like Netflix, Apple Music, and Amazon, and remittance-focused fintechs to send money to their loved ones back on the continent.

Enter Onboard, a self-custodial wallet developed by Nestcoin, a company which builds and supports products creating access to economic opportunity for frontier markets. Onboard lets users in frontier markets store and move digital assets directly to and from their bank account. In September, Onboard raised $1.9 million from Hashed Emergent, Adaverse, and Base Ecosystem Fund to build out Onboard Wallet, a digital money wallet with a virtual card that allows users to spend stablecoins across over 160 countries. At the time of capital infusion, self-reported data reveals that Onboard was serving 10,000 users. Last week, Onboard launched the stablecoins-powered virtual card to its suite of products that now includes an on/off ramp exchange service and a soon-to-come premium tier physical card.

Onboard views itself as a financial service company that delivers value to customers using stablecoins and blockchain technology rather than a crypto company, co-founder and CEO of Nestcoin, Yele Bademosi told NODO. According to him, they’re building a digital money app, a neo bank if you will, powered by stablecoins. The goal? To create universal access to global financial services, kicking things off with a USD account, all powered by stablecoins at the backend.

But the virtual cards market is nothing short of precarious. In recent years, companies providing dollar-denominated virtual debit cards to African consumers have seen a rise in fraudulent activities. These include instances where cardholders initiate transactions despite having insufficient funds in their accounts, as well as suspicious refund requests following online purchases. This particular type of scam is commonly referred to as chargeback fraud. Zambian fintech Union54, a licensed Mastercard partner for virtual card issuing companies, suspended operations–a year after raising 15 million in funding–because it was forced to pay half a million dollars in fees for declined transactions. Nigeria’s PayDay was put up for sale–a mere 6 months after raising $3 million in seed funding–because customers lost funds to illegal withdrawals.

Bademosi founded Onboard in April with the duo of co-founder and Chief Technology Officer (CTO) Taiwo Orilogbon and Vice President of Product Henry Uku, who helped build and scale Carbon, one of Africa’s first and largest neo-bank. Previously, Bademosi and Taiwo had partnered to build Bundle, a custodial crypto trading app serving a million users at the time of closure. The cumulative experience of these operators in the team scaling high-level financial technology products from scratch prepares Onboard for the task ahead, Bademosi told NODO.

“There's a lot of infrastructure that exists when you're building Web2 products, but when you are building for Web3, you're building everything from the ground up. We have had to create every technology we use and support ourselves,” Bademosi said. “But it's rewarding when we zoom out long enough to see how and why this technology is going to be a game changer.”

Onboard wants to attract users by creating products that users can’t get anywhere else, starting with a wallet and virtual cards. Although the wallet product remains the primary focus of the company, additional products in development with third parties are geared at enhancing the utility of the wallet and making it an indispensable daily utility for users. “When Onboard becomes one of our users’ primary financial applications, then I will know that we've done something amazing,” Yele said, familiarizing me with the company’s internal success metrics.

Merging security and ease

The liquidation of centralized crypto entities such as FTX has propagated a growing preference for self-custodial wallets, a route Onboard is also taking. As a self-custodial wallet, funds on Onboard are safeguarded using a seedphrase but unlike other self-custody wallets, where users lose access to your wallet when they lose your seedphrase, users can recover their accounts using their Gmail. So, in the event of an implosion, user funds are relatively safe. “The whole notion of blockchain and crypto started with the idea of giving people ultimate control over their money and creating a more open and transparent financial system whereby you don't need to trust anyone,” Bademosi said. “Unfortunately, the user experience for that was difficult. So, {blockchain innovators} created these custodial wallets as a middle ground to allow people to adopt the technology onto the user experience with the technology itself cut off.”

This parallels the development of various innovative and emerging technologies, Bademosi recalled, citing the widespread adoption of GPTs and personal computers decades after invention. “The point is that it takes time for the user experience of a new technology to catch up,” he said.

With the blockchain closing on that tipping point, innovations such as account abstraction and wallet recovery are tipped to make interacting with Web3 products a more user-friendly experience. Unlike externally owned accounts (EOAS) which rely on easily forgettable passkeys, account abstraction allows assets to be stored in smart contracts. According to experts, account abstraction will help onboard more people to the blockchain because it merges the ease of use of decentralized exchanges with the security of a self-custody wallet. Similarly, wallet recovery championed by Ethereum’s founder Vitalik Buterin as the preferred method for securing a wallet, allows one to have account recovery access through previously whitelisted addresses, such as those of trusted friends and family. “It means that we can give users direct control of their money, but not sacrifice user experience”, Bademosi said, explaining that little crypto regulation and lack of insurance on customer funds has made security a top priority amidst a need for a better user experience.

Seamless Onboarding

Onboard prioritizes streamlining the process of funding self-custody wallets without needing to go through a centralised exchange, complete with an in-app exchange (Onboard Exchange) that allows users to on/off ramp on Onboard. Its second priority is to develop a user-friendly experience, which makes the process of navigating its platform as simple and intuitive as possible.

Additionally, Onboard is focusing on stablecoins after recognizing that not everyone is interested in trading cryptocurrencies. This decision aligns with the incredible transaction volumes observed in the digital payment industry and the growing preference for stablecoins on the continent. By focusing on stablecoins, Onboard aims to democratize access to these dollar-pegged digital currencies, ensuring availability to individuals worldwide, regardless of their geographical location.

The company is partnering with developers to build and curate useful on-chain applications within the wallet that will add extra utility on top of it. “You can think of Onboard as a smart wallet, which is the most exciting thing because we don't even know what use cases people are going to build with it,” Bademosi said.

Despite the rising usage of crypto for cross-border payments, particularly by businesses, widespread adoption for retail purposes might prove to be difficult unless the user experience mirrors or is better than the accustomed payment products.

Starting with a test campaign in Kenya, Onboard will register merchants to facilitate liquidity, enabling users to on-ramp in Nigeria and off-ramp in Kenya. Subsequently, a rapid expansion to other African countries will follow, Bademosi told NODO. “We are starting slowly, but as we begin to have network effects, we'll be able to play in the intra-Africa trade, peer-to-peer, cross-border payment space,” he said.

“I do not care about the price of bitcoin, I do not care if you're in a bull market or bear market. We're going to stay focused on building and when the market returns, hopefully, we're here.”