E-commerce in Africa is rapidly expanding, but the lack of seamless payment options in some regions of the continent poses a barrier for many. Zambia, for example, has only about 10% of its adult population using a debit card, and this is what Union 54, a fast-growing fintech in the country, is seeking to change.

Union54, which is the first YCombinator-backed startup in Zambia, is now offering Zambians an opportunity to own virtual debit cards they can use to pay bills, check out goods from online marketplaces, and access local and global supply chains.

Founded in 2021 by an entrepreneur couple, Perseus Mlambo and Alessandra Martini, the startup gained significant traction in 2021, pioneering the entrant of Zambian startups into YCombinator, the accelerator/investment behemoth in Africa. 

The story of Union54 begins with Zazu, the challenger bank the duo had established as far back as 2016. While running Zazu, they encountered a major problem characteristic of legacy banks in Zambia: lengthy and unnecessary delays in issuing debit cards. 

For the entrepreneur couple, the lack of debit cards stands as a direct threat to financial inclusion in Zambia. Without debit cards, millions of Zambians are shut out from the many commercial opportunities that leverage the internet. 

Against this backdrop, the startup is offering other fintechs and companies in Zambia a means to generate their own debit cards, in both virtual and physical forms. By plugging into Union54’s API, these companies can easily generate cards for their customers in a more seamless process. 

“Our approach is unique in that for the first time ever all of these fintechs that have done really well in their home countries can do an integration with Union54; they can wake up and offer their customers a debit card,” Mlambo said in a statement. “We are also able to process virtual debit cards for online and e-commerce payments. We occupy a really unique position in that we allow all of these fintechs to be able to introduce debit cards.”

In April 2022, Union54 closed a $12 million seed extension round. Per Mlambo, this feat will see the fintech expand to other African countries. Currently, the company claims that over 100 fintech companies and 20 websites are plugged into its API. However, with Mlambo’s ambition to expand into Africa, these numbers are likely to change. According to him, Union54’s ambitions are a reflection of his overarching ambition to unify Africa’s 54 nations. “We don’t see Zambia as the only market for us. We see the whole continent as a potential market,” the co-founder said. 

Indeed, there are many financially excluded adults in Africa, especially those who do not live in urban areas. For this lot, virtual cards may be the best option available to them.

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