Onafriq, a pan-African payments company, has announced that it will shut down its Baxi agent banking business in Nigeria after roughly five years in the market. The decision comes in response to a series of challenges, including rising operational costs, the depreciation of the naira, and increasing competition in the financial sector, pressures that together have made the business difficult to sustain.

Baxi, which operates under Onafriq Nigeria Payments Limited, provides agent banking services through a network of physical agents equipped with point-of-sale (POS) terminals. The service enables customers to carry out essential financial transactions without visiting a traditional bank branch, including cash withdrawals, money transfers, and bill payments. Models of this kind rely on physical terminals and frequent cash handling, which ties their economics directly to operating conditions.

Onafriq entered the Nigerian agent banking market in 2021 by acquiring Baxi, also known as Capricorn Digital Limited. The company subsequently invested significantly in expanding its agent network, with the aim of bringing more cash-based transactions into the formal financial system. Despite those efforts, the mounting challenges have led Onafriq to pivot its focus toward enhancing its cross-border payments network and card issuing services, leaving the Baxi service behind.

According to the company, conditions changed significantly in 2024, as the naira's depreciation and inflation pushed up operating costs and affected transaction volumes. The rapid growth of instant account-to-account transfers also changed the types of transactions customers carried out through POS agents, while increased competition squeezed profit margins. For a business built around cash handling and physical touchpoints, that combination illustrates how quickly unit economics can shift when customer behavior moves toward direct digital transfers and input costs climb. Onafriq said a review of its long-term strategy led it to conclude that winding down the business was the right decision under the changed conditions.

“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” said Dare Okoudjou, Onafriq's founder and chief executive officer. “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 souls into building out the Baxi network.”

Onafriq said employees whose roles are tied to the agent banking business would be consulted and supported through the transition. Agents using the Baxi platform have been moved to another principal bank, and the company has asked them to transfer their funds to their preferred principal bank within 30 days, with its teams available to guide them through the process. The 30-day transfer window marks the immediate next step for agents whose banking arrangements have already changed.

The closure does not mean Onafriq is leaving Nigeria. The company said it will continue operating in the country as a Payment Solution Service Provider (PSSP), offering services through its payments network and card issuing business. Onafriq operates across African markets, connecting financial institutions, mobile money providers, and businesses to facilitate payments across borders. Its Nigerian strategy will now center on these payment services rather than running its own agent banking operation.

The shift underscores the rapidly evolving landscape of financial services in Nigeria, where traditional banking methods are increasingly being supplemented and challenged by innovative financial technologies. As Onafriq moves forward, how its new strategies play out will help shape the future of payments across the continent.

Source: TechNext24 — Onafriq shuts down Baxi agent banking business in Nigeria after 5 years