OPay eyes north Africa after Nigeria success
MOBILE PAY: The Softbank-backed fintech said that monthly settlements grew almost fourfold from January to November, as demand for alternative payment services rose
OPay, a Nigerian fintech start-up founded by Opera, plans to expand its payments service operations to North Africa early next year after COVID-19 restrictions led to a spike in transactions on its platform.
The volume of monthly settlements on the OPay platform grew almost fourfold to US$1.4 billion last month from US$363 million in January, as people sought alternative payments services during COVID-19-induced lockdowns, managing director Iniabasi Akpan said in an interview from Lagos.
“We plan to reach transactions value of about US$2 billion by the end of this year,” said Akpan, who is also the country head.
The company would leverage its network of 300,000 offline agents to deepen the adoption of its payments service in the next six months, he said.
OPay is planning an entry into the north African market after its success in Africa’s most populous country, Akpan said.
“The process has begun and we will see how the first quarter turns out,” he said.
The Lagos-based start-up, which has shareholders including Softbank Group Corp and China’s Meituan Dianping (美團點評), said it attained financial self-sufficiency in June and still has enough cash in the bank to fund its expansion plans.
Previous plans to expand to South Africa and Kenya, after raising US$190 million in funding last year, have been put on hold due to the disruption caused by the pandemic.
In February, OPay suspended part of its operations — including the ride-hailing and the logistics businesses — to focus on the payments business.
The financial services provider is piloting a digital overdraft product for its mobile wallet customers who have short-term funding needs.
Users would be able to borrow from 5,000 to 100,000 naira (US$12.7 to US$254) and have a window of 30 days to repay. The overdraft attracts 3 percent interest for the first seven days and 1 percent every day after that.
Through the product, which is called CreditMe, “we will be lending to working class people in their mid-20s and 30s, like students and small business owners, who have a source of income,” Akpan said.
He expects to launch the credit platform in the first quarter, subject to approval from the central bank.
The mobile-payments company also acquired an international money transfer license last year and plans to partner with WorldRemit to process remittances into Nigeria.
New regulations from the central bank are delaying the launch, Akpan said.
The service will take off as soon as there is clarity on what operators are allowed to do, he said.
OPay currently processes about 80 percent of bank transfers among mobile money operators in Nigeria and 20 percent of non-merchant point of sales transactions, Akpan said.
It is exploring partnerships with firms that have complementary services, he said.
“We have a large customer base of about seven million we can offer unique financial products,” he said.
