Why Onafriq Is Closing Down Its Nigeria Agent Banking Business

African payments company Onafriq is winding down its agent banking business in Nigeria, which operates under the Baxi brand, citing rising operating costs, currency depreciation and intensifying competition in the country’s digital payments market.

The decision comes as Nigeria’s payments industry shifts towards instant account-to-account transfers, reducing the share of transactions handled by point-of-sale (PoS) agents, while inflation and a weaker naira have increased the cost of running agent networks, the company said in a statement.

Onafriq said the combination of higher costs, changing transaction patterns and tighter margins had undermined the long-term sustainability of the business.

The company entered Nigeria’s agent banking market in 2021 through the acquisition of Baxi, also known as Capricorn Digital Limited, and invested in the operation through 2023 to expand its network of agents.

“This investment reflected the group’s belief in agent banking’s role in expanding financial access and digitising cash-based transactions,” the company said.

But operating conditions changed significantly from 2024, prompting a review of the business’s strategy and viability, it added.

Onafriq Chief Executive Dare Okoudjou said the company had entered the Nigerian market “with conviction and commitment” but had not achieved its expected results.

“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,” he said.

Okoudjou said the company remained committed to ensuring “honesty, fairness, and a well-managed transition” for those affected.

The wind-down will affect employees whose roles are tied to the agent banking operation. Onafriq said it would consult affected staff individually and provide support during the transition.

The company also said agents using the Baxi payments platform had been transferred to another principal bank. It advised them to move their funds to a principal bank of their choice within 30 days.

“Onafriq’s teams are available to provide support and guidance throughout the process,” the statement said, adding that the company would honour its commitments to affected stakeholders and maintain open communication during the transition.

The planned closure highlights the commercial pressures facing operators of physical payment networks as digital transfers reshape how consumers and businesses move money. Agent banking has helped extend financial services to customers who may lack convenient access to conventional bank branches, while enabling cash deposits, withdrawals and payments through local merchants.

However, the economics of maintaining agent networks depend on transaction volumes, commissions, operating expenses and the availability of cash and electronic liquidity. A shift towards digital transfers can reduce demand for some agent services, even as the broader payments market expands.

Onafriq said the decision did not mark its withdrawal from Nigeria, where it plans to continue providing payment services through its wider network and card-issuing operations.

“Nigeria remains central to our mission, and we will continue to serve the market as a Payment Solution Service Provider through the Onafriq payments network and our card issuing services,” Okoudjou said.

The company said it would focus on integrating its payments network and card-issuing services into Nigeria’s financial ecosystem.

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