Pan-African payments company Onafriq is winding down its Baxi agent banking business in Nigeria, citing rising operating costs, currency depreciation and intensifying competition in the country’s digital payments market.
The decision, announced on Friday, October 16, affects the agent banking operations run through Onafriq Nigeria Payments Limited. The company, however, has stressed that it is not leaving Nigeria and will continue providing cross-border payment services and card-issuing solutions.
Onafriq said changes in the operating environment since 2024 had significantly weakened the economics of its offline agent banking business, making the existing model unsustainable.
The depreciation of the naira and persistent inflation affected operating expenses and transaction economics, while competition compressed margins in a market where agents provide cash withdrawals, deposits, transfers and other financial services.
The rapid growth of instant account-to-account transfers has also changed how Nigerians conduct payments, reducing the relative importance of some transactions traditionally processed through physical agent networks.
Onafriq entered Nigeria’s agent banking market in 2021 through its acquisition of Baxi, also known as Capricorn Digital Limited. The company invested in expanding the network through 2023, seeking to strengthen access to financial services outside conventional bank branches.
Dare Okoudjou, founder and chief executive officer of Onafriq, described the decision as difficult, noting that it would affect employees, agents and business partners who helped build the Baxi network.
The company said employees whose roles are connected to the agent banking operation would be consulted and supported through the transition.
It also disclosed that agents operating through the Baxi platform had been transitioned to another principal bank and were asked to transfer their funds to their preferred principal bank within 30 days.
The development is significant for Nigeria’s agent banking ecosystem, which has played an important role in extending financial services to communities where conventional bank branches are limited.
Agent banking outlets allow customers to conduct transactions closer to their homes and businesses, particularly in areas where access to formal banking infrastructure remains difficult.
However, the model depends on sufficient transaction volumes, manageable operating expenses, reliable connectivity, access to cash and sustainable commissions. When margins become too narrow, operators may struggle to maintain the networks.
Onafriq’s decision highlights the pressures facing financial technology businesses that depend on physical infrastructure even as digital payments become more widespread.
For affected agents, the immediate priority will be to complete the transition to alternative banking arrangements and ensure that outstanding balances are transferred safely.
For the wider industry, the withdrawal raises questions about how operators can maintain financial inclusion while adapting to changing customer preferences and economic conditions.
Onafriq said its Nigerian operations would continue through its broader payments network and card services, indicating a strategic shift rather than a complete market exit.
The long-term impact on customers and agents will depend on how smoothly the transition proceeds and whether alternative providers can sustain reliable services in the affected communities.
