The future might not be for the traditional means of payment and transaction but for the tech-enabled process. This is considering the way that financial institutions and non-financial institutions are using technology to simplify processes and reach more people across the globe. The revolution of digital payment in Nigeria started two years ago with several acquisitions and mergers between institutions. Today, the game gets tougher and rougher as many startups are using the digital payment platform to make their products readily available to a wider crop of people. Large corporations are not left out of the game as they have intensified efforts to launch into Fintech especially in the African market. One of such corporations is Opera, the second most used web browser in Africa after Google Chrome. For the last four years, Opera has invested in Fintechs in Africa.
Opera founded OPay in 2018 leveraging on the popularity of its internet search engine. OPay is an Africa-focused mobile payments startup founded by the Norwegian browser company. It was introduced to take on the world of Fintech in Nigeria and other African countries. It recently secured $50 million in funding from the following lead investors; Sequoia China, IDG Capital and Source Code Capital. Opera also joined the round in the payments venture it created.
OPay will use the capital to grow its digital finance business in Nigeria being Africa’s most populous nation and largest economy. It will also support Opera’s growing commercial network in Nigeria. This includes motorcycle ride-hail app ORide and OFood delivery service. China’s deals in Africa have focused mainly on infrastructure and commodities, and the Chinese Venture Capitalists (VCs) have not actively engaged the African startups. This capital raise for OPay with the majority of the investment coming from the Chinese; from source including Source Code Capital, Sequoia China and GSR Ventures, is noteworthy and signals the beginning of some more investments from the Chinese.
OPay’s VC haul also has significance on digital-finance in Nigeria. It could support the shift of Africa’s digital payments leader from Kenya to Nigeria. For years Kenya has outpaced Nigeria in digital payments volumes and digital financial inclusion, largely due to the rapid adoption of mobile-money products, such as Safaricom’s M-Pesa. The slow inclusion of digital payment and mobile-money products in Nigeria is largely due to the Central Bank’s policy which has limited the ability of non-banks to offer mobile payment services.
Earlier in the year, the restriction was removed and favourable Fintech regulations have been put in place. This has provided an opportunity for mobile operators and other startups to offer mobile-money products as well as increasing the inflow of VCs into the Nigerian payment ventures.
On the payments side, OPay in Nigeria has scaled to 40,000 active agents and $5 million in daily transaction volume. The $50 million investment in OPay plays a significant role in the continent’s tech ecosystem on multiple levels. It is important to note how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa. Part of the $50 million investment includes diversifying country and product offerings. This could place OPay and its Opera-supported suite of products on a competitive footing with other ride-hail, food delivery and payments startups across the continent. A proverbial situation of one stone killing two birds, only this time it may be one stone killing several birds in different sectors.
Featured Image Source: Nairobi Garage