Opay becomes the latest company to leave mobile money market in Nigeria

July 10, 2020 |

The Norway based Chinese-backed Opay has announced that some of its subsidiaries will exit Nigeria or temporarily stop operations. In 2018, Chinese investors backed the startup with 180 million dollars to take over the mobile money market in Nigeria.

By June 2019 Opay diversified its offering to launch a bus transport service, a bike-hailing service, an investment arm, a loan service, and a food delivery company to Nigerian customers served through one app.

In July 2019, the company asserted that it had more than 40,000 active agents in Nigeria.

Opera finetech

Experts and industry insiders debated for a long time about the viability of the businesses started by the finetech Opera and the numbers declared by the company.

In spite of having less visibility in Lagos, seen as a huge and major market for fintech players, OPay claimed in 2019 to process $5m worth of transactions daily.

To its customers, the company was providing services at a subsidized rate. However, when the government of Lagos banned on passenger motorcycles in regions in the country – shutting down its bike-hailing service – rival ride-hailing companies blamed OPay for the ban and said that the company didn’t fully comply with the set down regulation on bike engines and didn’t do security checks on its bikers.

Wrong market

However, for all of the company’s many offerings, Nigeria may be the wrong market for it. Now, the weak purchasing power of consumers in Nigeria’s market makes many products offered by OPay unviable. But in fact, the quality of Nigeria’s market was not the only stumbling block to OPay.

Analyst Ovigue Eguegu tweeted that a business can’t grow faster than the environment it operates in and there are core systemic issues stifling rapid growth in African nations, especially in tech. Transsion, including Itel, Infinix, and Tecno now seems to be the exception.

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Category: Nigeria news

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