Onafriq Shuts Down Baxi Agent Banking, Retains Nigerian Operations

Financial technology company Onafriq has announced plans to discontinue its Baxi agent banking business in Nigeria, citing economic pressures and changing payment habits that have made the operation increasingly difficult to sustain.

The company said the decision affected only its agent banking operations and did not represent an exit from the Nigerian market.

Onafriq explained that rising operating costs, depreciation of the naira, broader economic pressures and intensifying competition had weakened the profitability of its offline payments business.

It said the operating environment had changed significantly since 2024, while the growing adoption of instant account-to-account transfers had altered the volume and nature of transactions conducted through agents’ point-of-sale (POS) terminals.

The resulting pressure on transaction volumes and profit margins made it difficult to maintain the business under its existing model, prompting a review of its long-term strategy.

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

He said the company had entered Nigeria with strong commitment but had not achieved the results it had anticipated.

Onafriq entered the Nigerian agent banking market in 2021 through its acquisition of Baxi, operated by Capricorn Digital Limited, as part of efforts to expand its presence in the country’s payments industry.

The acquisition was completed in March 2022 after receiving approval from the Central Bank of Nigeria. Before the acquisition, Baxi had built a network of more than 90,000 agents providing services such as cash withdrawals, money transfers, bill payments and account opening.

Onafriq continued investing in the business through 2023, seeking to expand the network and provide digital alternatives to cash-based transactions.

However, the growth of electronic bank transfers, rising operating expenses and competition from other payment service providers increasingly challenged the viability of the agent banking model.

The company said employees whose roles were directly affected would be consulted and treated fairly, with support provided throughout the transition.

It also announced that agents operating through the Baxi platform had been transferred to another principal bank and advised them to move their funds to their preferred principal bank within 30 days.

Onafriq said its teams would remain available to guide agents through the transition and help address concerns arising from the closure.

The company reaffirmed its commitment to Nigeria, stating that it would continue providing payment solutions through its wider payments network and card-issuing services.

The development highlights the changing economics of Nigeria’s agent banking industry, where operators face increasing pressure from operating costs, currency fluctuations and the growing preference for electronic transfers.