Onafriq, a digital payments network that operates across 40 African countries, is winding down Baxi, its Nigerian agent banking business, after five years, following what the company calls a review of its long-term strategy and sustainability.
The company said in a statement on Friday that inflation, naira depreciation, rising operating costs, lower trading volumes, margin pressure, and the rapid growth of instant account-to-account payments have made the offline agent banking business unsustainable.
Baxi was one of Onafriq’s large bets on Nigeria’s offline payments economy, built around the idea that a vast agent network could bring financial services to customers who still relied heavily on cash. However, economic conditions made maintaining that network more difficult.
“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” Dare Okoudjou, Onafriq’s founder and chief executive officer, said. “Closing this business was a difficult decision to arrive at, one that affects colleagues, agents, and business partners across Nigeria who poured their hearts and soul into building out the Baxi network.”
Onafriq said the decision will affect employees whose roles are tied to the business. However, it did not disclose the number of affected employees.
Baxi agents have been transitioned to another principal bank and asked to move their funds to their preferred principal bank within 30 days. Onafriq will continue operating in Nigeria as a Payment Solution Service Provider, focusing on its payments network and card issuing services.
In 2024, the naira lost roughly 129% of its value, falling to ₦1,479 per dollar. Nigeria’s inflation rate also reached 34.8% in December 2024, according to Nigeria’s Central Bank (CBN). For a business with a large physical network, the depreciation and inflation could mean operating inputs became more expensive.
Onafriq began agent banking in Nigeria by acquiring Capricorn Digital in a deal announced in October 2021. At the time, Baxi had more than 90,000 agents and had processed more than $1.6 billion in transactions in 2021. The acquisition was Onafriq’s route into a payment market that still had its financial system heavily reliant on banks and cash.
The plan was to use Baxi’s extensive physical distribution network to connect Nigeria’s offline payments ecosystem to MFS Africa’s cross-border payments infrastructure, according to the company. Baxi’s agents provided cash-in and cash-out services as well as account opening, money transfers, bill payments, and other services.
However, Nigerians’ payment behaviour began to change as instant account-to-account transfers became more widespread. The volume of Internet transfers in the first half of 2024 was 11.6 billion, compared with the 6.3 billion for the point-of-sale (PoS) payment option. At the same time, competition from fintechs, including Moniepoint, OPay and PalmPay, began to grow and dominated the PoS agent-banking market.
Onafriq said it will consult affected employees and support them through the transition and continue to honour its commitments to agents and other stakeholders as the business winds down.
Onafriq’s exit from agent banking comes amid a pullback by some fintechs from Nigeria’s financial services market, squeezed by a tougher funding environment and rising operating costs. In May, Chimoney, a cross-border payments infrastructure company, ceased operations after struggling to raise enough capital to continue operations, while Gigbanc announced in July that it would wind down its business amid a difficult fundraising environment.
“This decision is confined to the agent banking business in Nigeria and does not represent an exit from the Nigerian market,” the company added in the statement. “Onafriq Group remains strong, with continued growth across its cross-border payments network and card issuing services.
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