Onafriq, a pan-African payments company, has announced it will close its Baxi agent banking business in Nigeria. The decision comes in response to several challenges, including rising operational costs, naira depreciation, and increasing competition in the financial sector, which together have made it difficult to sustain the business.
Baxi operates under Onafriq Nigeria Payments Limited and provides vital agent banking services. Through a network of physical agents equipped with point-of-sale (POS) terminals, Baxi enables customers to carry out important financial transactions without the need to visit a traditional bank branch. With these agents, people can easily access services such as cash withdrawals, money transfers, and bill payments.
Onafriq initially entered the Nigerian agent banking market in 2021 by acquiring Baxi, also known as Capricorn Digital Limited. Since then, the company has invested significantly in expanding its agent network, aiming to bring more cash-based transactions into the formal financial system.
However, despite these efforts, the mounting challenges have led Onafriq to pivot its focus toward enhancing its cross-border payments network and card issuing services, leaving behind the Baxi service.
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This 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, it will be interesting to see how its new strategies will shape the future of payments across the continent.
Why Onafriq is closing Baxi
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.
The company said a review of its long-term strategy led it to conclude that winding down the business was the right decision. “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.”
What happens to Baxi agents and employees?
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. The company has also 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 closure does not mean Onafriq is leaving Nigeria. The company said it would 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, helping connect financial institutions, mobile money providers and businesses to facilitate payments across borders. Its Nigerian strategy will now centre on these payment services rather than running its own agent banking operation.
Similar read: “Nigeria’s hustle culture is its biggest strength”: Onafriq CEO, Okoudjou on building pan-African fintech
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