“We want to be the power that helps emerging markets reach faster economic development.”
This statement was made by Yahui Zhao, OPay’s Chief Executive offer, in an emailed response to Bloomberg a few weeks ago.
A number of fintech startups set up shop in Nigeria, promising financial inclusion for all, but somehow end up exclusively serving financially and technology-literate consumers. OPay is unlike these other fintech startups in the way they’ve strategically built their business to drive financial inclusion both online and offline.
Within OPay’s super app, users can pay bills, transfer money to other banks, request loans, chat with and send money to other OPay users, and save money with interest.
OPay’s mobile money business is thriving and the company reportedly processes about 80% of bank transfers among Nigerian mobile money operators. What this means is that a lot more people are using OPay to transfer money to other bank accounts than other fintech apps that offer a similar service.
OPay’s mobile money advantage is partly contributed to how aggressively they have marketed their mobile wallet services, targeting anyone who requires simple access to financial services.
But OPay hasn’t only successfully driven high adoption rates of their online services; the company has also done a stellar job with building an enviable POS agent network in Nigeria.
Between December 2018 and July 2019, OPay grew its number of agents from 5,000 to 40,000. By 2020, according to OPay Nigeria’s country manager, Iniabasi Akpan, their agent network had grown to 300,000 agents.
Comparatively speaking, Firstmonie (operated by First Bank of Nigeria) reportedly has over 120,000 agents; Paga has employed 27,000 agents and like OPay, currently operates only in Nigeria; and MTN Nigeria leads the charge with over 500,000 registered MoMo agents.
OPay’s agent network advantage is made possible due to the fact that the Fintech business acquired a Mobile Money Operator (MNO) license in 2019. With the MNO license, OPay can issue POS terminals to their network of agents around Nigeria.
OPay also operates under a switching license, which means that it doesn’t need to partner with any commercial banks to collect or process transaction or agency fees. It also means that OPay is running a very profitable business.
Most fintech startups that don’t have the required capital needed to obtain a coveted CBN license are forced to partner with Nigerian commercial banks that have the freedom to operate across multiple verticals, including electronic payments, card issuance, and merchant acquisition. For context, to obtain a CBN switching and processing license, a prospective business must deposit ₦2 billion (~ $3.77 million) in escrow in the apex bank.