Nigeria fintech startup, Payday has been acquired by leading blockchain payments startup, Bitmama. According to a document seen by Technext, the acquisition deal was made through Bitmama’s flagship cross-border payments product, Changera.
This follows a report in September by tech news platform, TechCabal that Payday was actively speaking to buyers, Six months after raising $3 million in a seed round led by Moniepoint. Another publication had reported six months before that another Nigerian fintech company, Moniepoint was in discussions to buy Payday.
Although the report indicated that “Moniepoint had issued a letter of intent to acquire Payday, contingent upon specific performance benchmarks”, the deal was not concluded. Sources told the publication that Moniepoint’s board was not keen on the deal.
Founded by Ruth Iselema in 2017, Bitmama leverages the stablecoin infrastructure to address prevailing market inefficiencies, which include dollar shortages, currency devaluation, and the high costs associated with remittance. The startup announced in September last year that it had raised a total pre-seed round funding of $2 million.
Bitmama x Payday: Fixing the past
Although the details of the acquisition by Bitmama were not revealed, an anonymous source who knows enough about the development told Technext that the changera team has already started working at the backend to resolve the previous challenges that users of the beleaguered fintech platform had complained about.
Recall that in August, a popular Twitter account, @PIDOMNIGERIA, made a tweet accusing Favour Ori and PayDay of using arbitrary exchange rates, imposing restrictions on withdraws and transfers without justifiable cause or notice and a lack of responsiveness to customer complaints.
Two months prior, Technext published a report that highlighted a litany of customer grievances. These concerns revolved around situations where individuals were ensnared in scams while utilizing the platform, leading to unapproved deductions from their accounts or discrepancies in the displayed funded amounts.
The source also indicated the team at Payday has been instrumental in the transition and resolution process. “We are working at the background to do a lot to improve the technology and make the customer service very efficient”, the source chimed.
Expansion prospects with Payday
Founded in 2021, Changera is a a social payment solution that allows non-crypto-savvy customers to use their money without limits, from anywhere in the world. It enables seamless and secure cross-border payments and remittances.
Today, Changera offers MasterCard and VISA-issued virtual & physical dollar cards Its virtual card offering gives users up to $10,000 in monthly spending limits on local and international online/offline payment channels in Nigeria, Ghana and Kenya.
The startup announced a partnership with MoneyGram, four months ago to allow both cash-in services in Canada, Senegal, Uganda and Kenya and cash-out services using Circle’s stablecoin, USDC, via the Stellar blockchain network, at participating MoneyGram locations across 180+ countries.
Hence, the acquisition of Payday, a fintech startup that provides virtual dollar cards to users across the continental, provides access to its 678,000 users (per CEO, Favour Ori’s last public count) as well as its users’ data. This saves Bitmama a potentially significant expansion cost.
The source explained that the acquisition is strategic because both companies recognize the immense potential in the fusion and that “this strategic move will greatly benefit their customers, and contribute to the overall enhancement of the fintech ecosystem.”
The future of Payday?
Asked if the Payday brand will be absorbed or retained as a separate entity, our source indicated that these details will be shared soonest.
The anticipated announcement will also provide details about the future of Payday’s leadership. “I am certain that Bitmama and Payday are committed to transparent communication throughout this process”, the source adds. “Further updates will be provided to our customers, investors and other stakeholders as the discussions progress”, it adds.
The source also indicated that there are plans to integrate Payday team members into the changera team going forward.
Read also: Payday CEO Favour Ori responds to fraud accusations, blames technical glitches
“Together, Bitmama and Payday will bring unique strengths and expertise to the table. The acquisition will capitalize on these strengths, creating a dynamic and comprehensive fintech platform”, it concludes.
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