Nigeria’s fintech future will be built on payment rails, AI and trust — Nwamaghinna

Nigeria’s fintech ecosystem has undergone a dramatic transformation in the last five years, driven by instant payments, agent banking, digital wallets and growing demand for alternative financial infrastructure. Yet, despite rapid growth in cashless transactions, millions of Nigerians remain excluded from formal financial services. For Nkwachi Nwamaghinna, a mobile engineer with more than eight years of experience building secure Android, iOS and cross-platform applications across fintech, payments, healthcare and emerging technologies, the next phase of Nigeria’s digital economy will depend on solving deeper infrastructure challenges. In this interview with Kenneth Athekame, he discusses the evolution of Nigeria’s payment ecosystem, the engineering challenges unique to African fintech, financial inclusion, AI, fraud prevention, open banking and why payment infrastructure may become the biggest opportunity in the continent’s digital economy. Excerpts:

What has been the biggest transformation in Nigeria’s payment ecosystem over the last five years?

The biggest change has been the rise of instant bank transfers as the default payment method. Five years ago, transfers were mainly used for large transactions. Today, people use transfers to buy everyday items, from groceries to street food. The 2023 naira redesign and cash scarcity accelerated this shift by forcing millions of Nigerians to adopt digital payments almost overnight.

Companies such as OPay, Moniepoint and PalmPay were positioned to capture that transition, and the trust people developed in digital payments has remained.

Another major development that does not receive enough attention is the rise of stablecoins. Previously, many people viewed stablecoins as something limited to crypto exchanges. Today, they are increasingly becoming tools for storing value, accessing dollars and facilitating cross-border payments.

In an economy dealing with currency depreciation and foreign exchange shortages, stablecoins have moved beyond experimentation. They are becoming part of financial infrastructure.

The significance is that local payments have become faster, while access to global value has become easier. Nigeria’s fintech transformation is happening on two fronts: instant domestic payments and easier access to digital dollars.

What unique engineering challenges do Nigerian fintech companies face that developers in Europe or North America may never encounter?

The biggest difference is the environment the application operates in. A mobile engineer in London or North America can often assume users have reliable internet, modern smartphones and stable communication networks. In Nigeria, you cannot make those assumptions. You are building for users with entry-level Android devices, unstable networks and delayed SMS notifications. A transaction may begin successfully, but the response may fail because connectivity drops midway.

The engineering challenge is designing systems that handle uncertainty.

For example, when a payment request is sent but no confirmation comes back, the application cannot simply show success because the money may not have moved. It also cannot show failure because the transaction may still complete.

Creating accurate pending states and ensuring the app never gives users false information about their money is some of the hardest payment engineering work.

These challenges force engineers to build stronger systems better retry mechanisms, offline handling, lightweight applications and resilient payment flows. If you can build reliable fintech products in Nigeria, you can build them anywhere.

Millions of Nigerians remain financially excluded despite rising cashless transactions. How can fintech bridge this gap without compromising security or user experience?

The solution is better-designed financial access. Tiered KYC is critical. A user should be able to open a basic account with minimal information and gradually unlock higher limits as they provide additional verification such as BVN or NIN. The goal should be matching security requirements with risk levels. If you demand too much documentation from someone who simply wants to receive small payments, you push them back into cash.

The second part is distribution. Financial inclusion cannot depend only on smartphone applications because many excluded Nigerians still use feature phones.

That is why agent networks and channels like USSD remain important. Companies such as Moniepoint and OPay have shown that an agent with a POS terminal can become the financial access point for communities where traditional banks have limited presence.

Security and inclusion are not competing goals. The real challenge is removing unnecessary friction.

Why is payment infrastructure becoming increasingly important in Nigeria’s digital economy?

Because almost every digital business is becoming a payments business.

E-commerce platforms, logistics companies, agricultural technology firms and gig platforms all depend on reliable money movement.

The biggest challenge in Nigeria is not simply creating payment options; it is creating trust. Failed transfers, delayed reversals and unresolved disputes weaken confidence.

Every improvement in payment reliability unlocks more economic activity. Small businesses become comfortable selling online, merchants adopt digital payments, and new business models become possible.

Infrastructure is often invisible when it works, but it determines whether the digital economy can scale.

Why should investors focus more on payment infrastructure rather than consumer-facing fintech applications?

Because infrastructure creates long-term value. Consumer applications can be copied quickly, and users may switch platforms because of incentives. But payment infrastructure becomes deeply embedded once businesses rely on it for transactions, reconciliation and reporting.

Companies such as Interswitch, Flutterwave, Paystack and Moniepoint demonstrate the importance of owning the rails that power transactions.

Infrastructure businesses benefit from transaction volume rather than short-term consumer trends. They become the foundation on which other digital services are built.

What is driving the growth of virtual cards and virtual accounts, and where do you see the next opportunity?

Virtual dollar cards grew because of necessity. When international spending limits on naira cards became restrictive, many Nigerians needed alternatives to pay for services such as software subscriptions, online advertising and international platforms.

Virtual cards solved a real problem, and stablecoins are increasingly becoming part of that ecosystem.

The next major opportunity is credit.

Nigeria remains largely a debit economy, and millions of people lack access to formal credit because they have no traditional credit history.

The future will depend on combining payment data, alternative credit scoring and trust networks.

This is why digitising cooperatives is important. Millions of Nigerians already save and borrow through informal cooperative structures, but much of that information exists only in notebooks or WhatsApp groups.

Turning those activities into digital records creates the data foundation needed for broader credit access.

How can fintech companies balance innovation with increasing regulation from the Central Bank of Nigeria?

The first lesson is that regulation must be considered from the beginning. In Nigeria, regulatory changes can quickly reshape products. The companies that succeed are those that build flexible systems capable of adapting.

Engineering teams need modular architecture, feature controls and compliance processes integrated into product development.

Compliance should not be treated as a final review stage. It should influence design decisions from day one.

The companies that struggle are usually those that build first and attempt to fix compliance issues later.

What technologies are proving most effective in fighting payment fraud?

Fraud prevention begins before a transaction happens. Strong identity verification remains one of the most effective tools. Better KYC processes, BVN and NIN verification, biometric checks and identity matching can prevent fraudulent accounts from entering the system.

The second layer is transaction security.

Companies need stronger authentication, behavioural monitoring and risk-based verification. A stolen password should never be enough to move money.

The future of fraud prevention will involve systems that understand context unusual locations, new devices, abnormal transaction patterns and changes in user behaviour.

How will AI transform payments, lending, customer support and fraud detection in Nigeria?

AI will have a major impact, especially in fraud detection, customer support and lending.

Customer support will improve significantly when AI systems can understand Nigerian languages and local expressions, including Pidgin, Yoruba, Hausa and Igbo.

The biggest opportunity, however, is lending.

Millions of Nigerians have no formal credit history but generate valuable financial data through transactions. AI-powered underwriting could help financial institutions assess customers more accurately.

However, companies must approach AI with strong privacy standards. Customer data must be protected, and businesses should minimise the amount of sensitive information shared with external AI systems.

Why is data privacy becoming more important as fintech companies adopt AI?

Financial data is among the most sensitive information people generate. Transactions reveal income patterns, spending habits, relationships and personal behaviour. Once that information leaves a company’s infrastructure, controlling it becomes more difficult.

Companies should consider privacy at the architecture level, including local AI deployments where possible.

The future belongs to fintech companies that combine innovation with strong data protection practices.

What technological improvements are needed to make African cross-border payments as seamless as domestic transfers?

Africa needs better local settlement infrastructure. Currently, many African transactions still move through international financial centres, creating delays and additional costs. Systems such as the Pan-African Payment and Settlement System (PAPSS) are important because they allow transactions to settle using local currencies.

Stablecoins are also increasingly filling this gap by enabling faster settlement across borders.

The next challenge is improving liquidity management between African currencies through automated systems.

How significant will embedded finance become in Nigeria’s digital economy?

Embedded finance will become the normal way financial services are delivered. Instead of customers going to banks for financial products, financial services will increasingly appear inside platforms they already use.

A logistics worker could receive credit based on earnings data. A retailer could access inventory financing through a business platform.

The companies that win will be those that embed financial services seamlessly into everyday activities.

What separates successful fintech companies from those that struggle to scale?

Three things: distribution, reliability and regulatory readiness. Distribution remains critical. Companies like Moniepoint and OPay succeeded because they built strong agent networks. Reliability is equally important. Money transactions require trust. A single failed payment experience can permanently damage customer confidence.
Finally, companies must invest early in compliance. In Nigeria’s fintech environment, regulatory readiness is a competitive advantage.

How will open banking reshape financial services in Nigeria?

Open banking will change who controls financial data. Today, banks hold customer information within their own systems. Open banking allows customers to share that data securely with other providers.

The biggest impact will be lending. Financial institutions will be able to assess customers based on broader financial behaviour rather than limited account history.

This creates opportunities for smaller fintech companies to compete by building better experiences on top of shared financial infrastructure.

Can Nigeria replicate East Africa’s mobile money success?

Nigeria will follow a different path. Kenya’s mobile money revolution was driven largely by telecom operators through platforms like M-Pesa. Nigeria had a stronger banking system and a different regulatory environment.

Instead, Nigeria’s version has been built through fintech companies, agent networks and instant transfers.

The POS agent in a Nigerian market plays a similar role to the mobile money agent in Kenya.

The destination is the same: bringing millions of people into digital finance. The route is simply different.