The Nigerian mobile payments market continues to attract fintech firms that want a piece of the action. In November 2019 alone, $360 million was invested in three fintech companies targeting Nigeria’s payments market.
Sub-Saharan Africa’s remittances market was worth $38 billion in 2017, according to World Bank data. The largest number of remittance recipients was in Nigeria, with almost 58 percent — $21.9 billion worth — of sub-Saharan Africa’s total remittances.
The opportunity in Nigeria is so attractive that not all of the fintech firms on this list are local. Some are based in the U.K. while others were founded in Africa and are now based in Silicon Valley.
Here are 10 fintech firms that are hoping to dominate the Nigerian payments market.
Nigerian fintech firm Interswitch may have confirmed its unicorn status in November when the U.S. credit card firm Visa paid an unconfirmed $200 million for a 20 percent stake in the Nigerian company. Founded in 2002 by CEO Mitchell Elegbe, Interswitch has developed a multi-channel network for payment services across Africa. The Nigerian fintech firm is planning to list on the London and the Nigeria stock exchanges in 2020 with a valuation between $1.3 billion and $1.5 billion. Interswitch owns Verve, Nigeria’s most used payment card, accounting for 18 million of the 25 million credit cards in circulation in the country, according to the FinancialTimes.
Nigerian mobile payments company Paga is one of the homegrown startups looking to dominate Nigeria’s payments market. With more than 14 million customers, Paga allows people to digitally send and receive money while providing access to other financial services through its digital wallet. The company has raised $34.7 million over four rounds since 2010, with the most recent being a September 2018 Series B investment amounting to $10 million, according to Crunchbase. CEO Tayo Oviosu has discussed the possibility of an IPO for his company, though he believes that Paga will remain private for the next two to four years, according to Techcrunch.
Listen to GHOGH with Jamarlin Martin | Episode 07: Tayo Oviosu
Jamarlin Martin catches up with Tayo Oviosu at SXSW 2018. Oviosu is the Founder and CEO of Paga, the leading mobile payments company in Nigeria.
Lagos-based payments firm Paystack is a startup that provides online payments for merchants and others in Nigerian e-commerce. While most of the other fintech firms on this list are pursuing the consumer market, Paystack offers payment solutions for businesses. Paystack has an office in San Francisco, and one of its investors is U.S. payments firm Stripe. It was the first Nigerian company to be accepted into Silicon Valley accelerator Y Combinator and has raised $11.7 million in funding since its launch in 2016.
One of the most recent payments firms to launch in the Nigerian market, U.K.-based fintech firm PalmPay offers mobile-based financial services including bill payments, rewards and discounted airtime. The company raised a $40 million investment through Chinese backers in November 2019 and signed a partnership with one of Africa’s most popular smartphone makers, Tecno. Part of the partnership involves Tecno pre-installing PalmPay’s app on 20 million phones a year beginning in 2020, according to MobileWorldLive.
Founded by Nigerians Yinka Adewale and Pelumi Aboluwarin in 2016, Y Combinator-backed Nigerian fintech startup Kudi processes more than $30 million in payments a month and has an agent network of more than 4,500 merchants. In April 2019, the company raised a $5 million series-A round led by French venture capital fund Partech Partners with participation from the Silicon Valley investor YC and Khosla Ventures. Kudi’s artificial intelligence-enabled mobile app allows users to send money to any Nigerian bank, buy mobile airtime or pay bills. An AI chatbot communicates with the user on the app to understand what they need and assist with a selection of financial services, according to Techmoran.
Chipper Cash, a Ugandan mobile money payment firm based in Silicon Valley, expanded into Nigeria in September. Chipper Cash operates in six African countries and offers no-fee, person to person, cross-border mobile-money payments in Africa through its app. It claims to have processed 250,000 transactions for more than 70,000 active users, according to Techpoint. In May 2019, Chipper Cash raised a $2.4 million seed round led by San Francisco-based fintech investor Deciens Capital. Chipper Cash also runs Chipper Checkout, a merchant-focused, fee-based mobile payments product.
Dubai-based African e-commerce firm Jumia has an online payment platform, JumiaPay, that operates in six African countries including Nigeria. JumiaPay offers payment processing for items purchased on the Jumia platform. It also provides Jumia Lending, a quick loan service for sellers, offering loans based on the vendor’s sales history. JumiaPay also allows users to buy mobile airtime and pay utility bills. The JumiaPay digital finance product experienced significant growth this year. Total payment volume increased by 95 percent to $35.4 million in the third quarter of 2019 compared to $18.14 million in the same period in 2018, according to Jumia’s third-quarter financial results.
Nigerian fintech firm Flutterwave provides transaction infrastructure for mobile payments. Flutterwave was founded in 2016 by Nigerian entrepreneurs Olugbenga Agboola and Iyin Aboyeji. The Y Combinator-backed company runs its operations center in Nigeria but moved its headquarters to Silicon Valley in 2018 to be closer to potential partnerships with investors and business leaders in the Bay Area. Flutterwave claims to have processed more than $2.5 billion in payments for clients including Uber, Facebook, and Transferwise, according to ITWebAfrica. In October 2019, Flutterwave was named by Silicon Valley-based accelerator Y Combinator as the most valuable African company that it has invested in.
Nigerian mobile platform Carbon, formerly known as Paylater, lets users to transfer money, recharge mobile airtime and pay bills. It also provides loans. Carbon is owned by Nigerian finance company OneFi. In March 2019, Carbon attracted $5 million in funding from New York and Nairobi-based debt platform Lendable, according to ITNewsAfrica.
Norwegian company Opera’s mobile money firm OPay, which launched in August 2018, has raised $170 million in funding this year alone to scale its payment platform in Nigeria and beyond. OPay’s mobile platform allows users to make money transfers, pay for goods, bills and other daily services such as grocery delivery and transportation, as well as mobile airtime purchases. In June 2019, OPay had more than 40,000 active agents in Nigeria and saw daily transaction volumes in excess of $5 million, according to Techsavvy.
