- Enabled by several factors, OPay, a 5-year-old unicorn fintech in Nigeria, is leading the fintech revolution in Nigeria.
- With over 500,000 agents spread across Nigeria, OPay has been able to bridge the gap in financial inclusion by providing accessible and affordable financial services to the unbanked and underbanked population.
- Its wide range of services, convenience, agent network, and customer-centric approach has made it a preferred choice among Nigerians, leading to its exponential growth and market dominance in the fintech space.
In a market traditionally dominated by deep-pocketed commercial banks, not many FinTechs were given a blinker of survival.
However, the narrative surrounding FinTech in Nigeria has drastically changed, with these innovative companies now holding the key to the country’s financial inclusion drive.
One standout player leading this revolution is OPay, a unicorn fintech that has become a household name in Nigeria. With its mobile money operator license from the Central Bank of Nigeria (CBN), OPay is spearheading Nigeria’s own version of the ‘M-PESA’ mobile money success witnessed in Kenya.
Rise of Opay
Established five years ago, OPay has quickly emerged as the most downloaded fintech app in Nigeria, thanks to its ‘super app’ that combines multiple services. Starting with OFood, ORide, OCar, OBus, and OKash, OPay laid a solid foundation for its exponential growth.
While the Lagos State Government’s ban on bike hailing halted ORide, OPay’s mobile money and payment services continue to thrive. By enabling unbanked and underbanked users to easily send and receive money, as well as pay bills through a vast network of agents, OPay has amassed over 35 million customers, making it a trusted platform for financial transactions.
Success factors
According to Olu Akanmu, Co-CEO of OPay Nigeria, one key strategy for any startup seeking success is to identify untapped areas with potential for scale and leverage technology to unlock new opportunities. OPay’s differentiation lies in its ability to address the challenge of poor digital identity by utilizing phone numbers and BVN as identifiers, thereby providing a richer experience than competitors relying solely on USSD. Additionally, OPay’s agile IT network enables rapid capacity expansion, surpassing the capabilities of traditional banks.
For him, the company also set itself apart in the market by leveraging the pervasiveness of mobile connections to overcome the challenge of poor digital identity.
- “The first foundation for payments is digital identity, but it’s limited in Africa, so phone numbers were the most accessible form of identity. What set us apart was providing a richer experience than other players trying to use USSD for this purpose. We focused on phone numbers and BVN as identifiers and were able to unlock payments for the non-smartphone market,” Akanmu said.
Akanmu noted that OPay has also built an agile IT network, which allows it to expand capacity at a faster speed compared with the traditional banks.
While OPay attributes its success to core strategies, industry stakeholders recognize the significant financial backing it has received from parent company Opera. Heavy funding has empowered OPay to aggressively promote its offerings to banked, unbanked, and underbanked Nigerians.
However, the CEO of Mauve payment solutions, Mr Olusola Thompson, has a different opinion. He noted
- “It is one thing to have a strategy to penetrate the market and it is another thing for you to have the fund to implement those strategies. OPay have the two going for them and it is not surprising that they are where they are today. To succeed in a very competitive market like Nigeria, you a lot of funding and OPay got that through a series of investments that brought its valuation to over $2 billion in 2021,”
According to another stakeholder in the fintech industry, Mr John Akinlade, he noted that what brought the likes of OPay to the reckoning of many Nigerians is the failure of commercial banks to invest in their IT infrastructure.
- “While OPay may have been growing steadily over the years by expanding its agents’ network, the company and a few other FinTechs benefitted immensely from the recent cash crunch which more than ever before expose the frailty of the commercial banks’ IT infrastructure. It was at that point that many Nigerians shifted to FinTech and even if the banks become better tomorrow, many may not go back because aside from the swift transactions on platforms like OPay, their customers are also enjoying a lot of freebies that they can’t get from the commercial banks,” he said.
Agent/ license advantage
OPay’s advantage lies in its extensive agent network, made possible by acquiring a Mobile Money Operator (MMO) license in 2019. This license enables OPay to distribute POS terminals to its agents nationwide.
Earlier in the year, OPay’s agent network surpassed 500,000 from 200,000 in 2020, surpassing the agent spread of Firstmonie, the fintech arm of one of Nigeria’s largest banks FBN Holdings, with a network of about 180,000 agents. By onboarding new agents daily, OPay bridges financial inclusion gaps, bringing financial services closer to the people.
Speaking with Nairametrics, an OPay agent, Mrs.. Comfort Ige said the company made the acquisition of its PoS machine easy compared to other FinTech’s and that is why many are registering to become their agents.
- “One of the most notable aspects of working with OPay is the convenience it offers to customers. With just a smartphone and the OPay app, users can access a wide range of financial services, including money transfers, bill payments, and airtime purchases, among others. This comprehensive suite of services has made OPay a popular choice among Nigerians who value accessibility and efficiency.
- “Being an agent has also given me the opportunity to play a vital role in financial inclusion. In Nigeria, where a significant portion of the population is unbanked or underbanked, OPay’s mobile money platform has bridged the gap by providing easy and affordable financial services to individuals who previously had limited access to banking services,” she said.
Another OPay agent, who simply identified himself as Jude, said OPay’s commitment to agent empowerment is another aspect that sets them apart.
- “As an agent, I have received extensive training and support from the company. They provide regular updates, conduct training sessions, and offer assistance whenever needed. This support has enabled me to better serve customers and build trust in my community,” he said.
What OPay customers are saying
Aside from the swift transactions, many OPay customers are thrilled by the fact they can transfer money from their OPay to other banks free of any fee charges. Recounting his experience using OPay, Chinonso Eboh, said:
- “OPay has revolutionized the way I handle my financial transactions, making my life easier and more convenient. The fact that I can make free transfers is a big plus for the OPay app. One of the standout features of OPay is its wide range of services. Whether I need to send money to a friend or family member, pay bills, or even purchase airtime, OPay has got me covered. I no longer have to visit multiple physical locations or stand in long queues to complete these tasks. Everything I need is right at my fingertips through the OPay app on my smartphone,” he said.
However, Samuel Babatunde, another OPay user expressed concern that OPay has started charging N10 after the 3rd transaction in a day, which was not so before.
- “I enjoy using OPay, but my only concern now is that they have started charging for transfer, though they allow you to do free transfers a day, after which they start charging N10. While this is still okay, moving from indefinite free daily transfers to a limit of 3 means that at some point, OPay may start charging for all transfers like banks. This is my only concern,” he said.
OPay’s journey in Nigeria
In May 2017, the Norwegian internet company Opera announced a $100 million fund to invest in digital businesses in Africa, with $40 million dedicated to the Nigerian market. The company said the fund was aimed at improving financial inclusion and the African digital economy.
The acquisition of PayCom, a Nigerian fintech service with a CBN license to carry out payment services, propelled OPay’s growth by leveraging the $40 million investment fund.
Today, OPay stands as a dominant player in Nigeria’s fintech landscape, offering a consumer-facing payments platform that enables money transfers, bill payments, and more.
With recent major funding rounds, including $400 million led by SoftBank Vision Fund 2, OPay continues to shape the fintech industry and cement its position as a driver of financial inclusion in Nigeria.
