The Bank of Cape Verde has published a report characterising fintech initiatives in the country, based on a questionnaire sent to payment service providers (PSPs) and fintech entities between December 2024 and May 2025. The study maps disruptive, technology-led business initiatives in financial services and identifies barriers to new entrants, drawing on data and information about the adoption of innovative solutions. Key findings point to non-equitable competitive conditions between incumbent PSPs and entrants, despite the existence of a regulatory framework for payment services and the issuance of electronic money. The report highlights concerns about the proportionality of prudential requirements relative to the operational and financial risks faced by non-bank PSPs, and links entry barriers to a digital transition that is more dependent on incumbents, particularly credit institutions. It also finds that PSPs are preparing for fintech primarily through new and improved products and services in payments and transaction authentication, while fintech entities tend to focus on technology-based solutions for payments and authentication, including payment execution tasks, onboarding, digital customer support and Know Your Customer (KYC) processes. The report identifies potential actions to address legal or regulatory impediments to innovation while mitigating risks to financial stability, with particular emphasis on revising the legal framework to introduce flexible proportionality requirements for non-bank PSPs. Other options cited include international coordination among regulators, developing sandboxes and innovation hubs, and investing in new technologies. The Bank notes it may explore further innovation monitoring and dialogue with fintech operators, including operationalising a structure to support financial innovation, market interaction and coordination among regulators.

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