After dominating the Point of Sale (PoS) market in Nigeria, alongside OPay and Palmpay, Moniepoint is expanding into retail banking, setting itself up for direct competition with traditional banks.
Moniepoint’s entry strategy is a new consumer app and debit card, which will be available to its 33 million terminal users across Nigeria. The cards can be used at the over 1.5 million businesses that currently use the Moniepoint Microfinance Bank platform.
Ope Adeyemi, senior vice president for channels and sales tools at Moniepoint, said personal banking enables the company to connect businesses and customers more effectively while supporting them with reliable infrastructure and services.
“We have always been committed to providing financial happiness, so it was a natural next step when dealing with so many businesses, to also offer our reliable services to their customers and employees,” Adeyemi said. “By taking this step, we are determined to power the dreams of millions of people across the continent.”
Moniepoint’s retail banking foray comes at a time when traditional banks are increasing their investment in that banking segment to buffer revenue against economic meltdown. The tier-1 banks including First Bank, UBA, GTBank, Access Bank and Zenith Banks have all pushed more resources into growing their retail customer base.
Experts have long predicted that only by growing retail banking would the millions of Nigerian outside the banking industry be included. The country’s overall inclusion target was 80 percent by 2020. Data from Enhancing Financial Innovation and Access (EFInA) shows that only 64 percent of Nigerian adults were financially included by the end of 2020.
But Moneypoint comes with some advantages. First, with its customer base of 33 million, it will be the largest bank in Nigeria by customers, behind Access Bank (over 49 million), OPay (40 million), and First Bank (39 million). Other banks in the tier-1 category include UBA (30 million), and GTBank (28 million).
Therefore, the company can easily leverage the 33 million customers to scale its retail banking offerings. For example, Moniepoint recently announced the Working Capital Loans, a solution that is targeted at the 1.5 million businesses on its platform, to help solve capital challenges and keep their businesses running and growing. The loans are short to medium-term, which means borrowers are expected to pay within 7 to 120 days which can be easily and in some cases automatically renewed.
“This way, any merchant who runs his business via their Moniepoint account may have access to a line of credit proportional to the business that passes through the Monieppoint account. The product is already widely adopted by a number of businesses; supermarkets, fuel stations, etc. And currently had zero defaults so far,” the company said in a statement.
Prior to now, Moniepoint has almost exclusively focused on growing PoS transactions. It is currently leading the banking agent market with 611,213 agents. The company currently processes over $170 billion in annualised total payment volume (TPV), making it the largest fintech company. While the company’s revenue is not available, a spokesperson for Moniepoint said its revenue for its last financial year was in the “hundreds of millions of $”.
Moniepoint evolved into a full-service business bank in 2022 when it received its banking licence from the Central Bank of Nigeria (CBN) and launched as a full-service business bank. But it wasn’t until 2023 that it shed its old name TeamApt and became Moniepoint, and announced its lending business. Tobi Amira, vice president of loans at Moniepoint, said solving problems like reconciliation and stability that agents faced was the biggest selling point for the company. This proved important when the CBN moved to redesign the naira which led to an acute shortage of naira notes across the country.
“We identified problems around reconciliation, support, and distribution that no one was addressing and created reliable solutions for agents,” Amira wrote in a LinkedIn post.
As of Friday, the Moniepoint app has seen over 1 million installs on the Google Play Store. According to the company, users can make transfers, pay bills and buy airtime using the app. The Moniepoint debit cards can be used at ATMs, PoS terminals, and online transactions.
“Moniepoint moving into third gear. I’m happy to see this launched publicly to consolidate the significant trust and brand equity built in recent years. As I’ve said many times privately, product strategy at Moniepoint is up there – driven by first principles,” said Peter Oraifo, principal at Oui Capital.
Users can open an account on the Moniepoint app in less than minutes, according to Tosin Eniolorunda, CEO of the company. Other services such as salary advances will be rolled out on the app in the coming months.
“It’s a good market, and it’s more like them trying to cover both ends of the service, supplying both the users and the businesses. If you handle the whole flow, you’re less likely to have problems outside your control,” said Sultan Akintunde, cofounder of AltSchool Africa. “However, I assume they’d be acquiring a certain startup to get into the user base, not necessarily building their own user bank.”