Pan-African payments company, Onafriq has announced plans to discontinue its Baxi agent banking operations in Nigeria, citing rising operating expenses, naira depreciation and intensifying competition in the payments industry.

The company disclosed this in an email to PUNCHOnline on Friday, clarifying that the decision affects only its agent banking business and does not amount to a withdrawal from the Nigerian market.

Onafriq attributed the move to changing economic conditions and the growing adoption of instant account-to-account transfers, which have reduced the commercial viability of its offline payment operations.

According to the company, the business environment became increasingly challenging from 2024 as currency depreciation and wider macroeconomic pressures drove up operating costs.

It added that the expansion of instant digital transfers had changed the volume and pattern of transactions processed through agents’ point-of-sale terminals, while increased competition and shrinking transaction margins further weakened the business.

Onafriq’s Founder and Chief Executive Officer, Dare Okoudjou, described the decision as difficult, noting that it would affect employees, agents and business partners who contributed to building the Baxi network.

“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” Okoudjou said, acknowledging the people who invested their efforts in developing the business.

Onafriq entered Nigeria’s agent banking market in 2021 through an agreement to acquire Capricorn Digital Limited, which operates under the Baxi brand. The acquisition was completed in March 2022 following approval from the Central Bank of Nigeria.

The company continued investing in the business through 2023, seeking to expand its agent network and encourage the adoption of digital payment alternatives to cash transactions.

Before its acquisition, Baxi had established a network of more than 90,000 agents, providing services such as cash withdrawals, money transfers, bill payments and account opening.

The agent banking model allows customers to access financial services through third-party outlets equipped with POS terminals, reducing the need to visit conventional bank branches. However, operators depend on transaction volumes and margins to cover expenses and compensate agents.

Onafriq said a review of its long-term strategy and the sustainability of the business informed its decision to wind down the operations.

The closure will affect employees working in the agent banking division. The company assured that affected staff would be consulted, treated fairly and supported throughout the transition.

It also disclosed that agents using the Baxi payments platform had been transferred to another principal bank. The company has directed the agents to move their funds to their preferred principal bank within 30 days.

Onafriq said its teams would provide assistance and guidance to agents during the transition and fulfil their obligations to affected stakeholders.

Despite the closure, the company maintained that Nigeria remained important to its operations, adding that it would continue providing payment services through its Onafriq payments network and card issuing business.

Formerly known as MFS Africa, Onafriq had positioned the Baxi acquisition as a means of expanding its presence in Nigeria and connecting local businesses to its wider cross-border payments network across Africa.