Photograph — CIO East Africa

Nigeria’s FinTech industry continues to evolve on the back of technological advancement and demographic support, and the significantly under-tapped digital payments industry is poised for significant growth over the next 5 years.

Divergent factors across industry fundamentals, positive country demographics, and regulatory support are reasons for the accelerated growth in the FinTech industry in Nigeria. This expectation has received significant attention from investors, leading to significant investments and partnerships as existing players look to position for future growth.

It is reported that Nigeria is poised to lead the growth in non-cash transaction volume. According to the Enterprise Development Centre (EDC), non-cash transaction volume in the country is forecast to grow faster than in sub-Saharan Africa and globally. It is expected to reach 17.8 percent of the total transaction volume in 2023 from 4.7 percent at the end of 2018.

The fast-growing industry has also seen further partnerships owing to the huge potential in Nigeria’s FinTech space, a development that is driving expansion in the country. In this light, Nigeria-based FinTech, Paga, has recently signed a partnership deal with a global payment processor, Visa, to leverage on the latter’s network for its users.

The partnership allows Paga account holders to enjoy new merchant options and be able to transact on Visa’s global network, while both companies will work together on technology. More so, it is expected that Visa investing in the FinTech company will drive larger payment volumes for both companies.

“We want to digitize cash, that is a strategic priority for us. We want to expand merchant access to payment acceptance and we want to drive financial inclusion,” said Otto Williams, Visa’s Africa Head of Strategic Partnerships, FinTech, and Ventures.

Paga, founded in Nigeria has scaled its FinTech business throughout West Africa, before targeting Ethiopia and Mexico. The company’s multi-channel network serves over 14 million users in Nigeria who transfer funds and pay merchants through an app or any of its agents.

In this regard, Paga in January acquired Apposit, an Ethiopian software development company. This makes the FinTech company emerging globally and becoming less of a Nigerian-centered company. Also, Visa partnered with B2B payments company Flutterwave and South African startup Yoco. The partnership is targeted at enterprise payments services and hardware for SMEs. 

With more of such partnerships expected, it is believed that Nigeria’s FinTech industry can tap the population yet to be financially included. Also, local FinTech firms exploring the Nigerian unsecured lending business would see strong growth in the future while new players enter the industry.

By Ahmed Iyanda.

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