Why Financial Institutions Must Unlearn Before They Can Win in New Markets

There is a particular kind of confidence that comes with success. For financial institutions that have delivered transformative results in one market, that confidence is often well-earned. They have navigated regulatory complexity, built distribution networks, and earned customer trust. This is no small achievement.

And yet, that very confidence has been the undoing of many institutions the moment they cross a border. The assumption that a proven playbook translates seamlessly to a new geography is one of the most persistent and costly errors in financial services expansion. Over my career, I have watched this play out repeatedly across Africa: the leaders most invested in a model’s success are often the least able to see why that model may be precisely wrong for the next market they are entering.

When the Continent Teaches Its Own Lessons

The African continent offers three of the most instructive case studies in the world on this exact point: one that refused to change and was shut down, one that pivoted and thrived, and one that got the second market right by design.

Case One: M-Pesa in South Africa – The Cost of Not Changing

By 2010, M-Pesa’s dominance in Kenya was extraordinary. It processed transactions equivalent to nearly 60% of the country’s GDP, underpinned by Safaricom’s 70% subscriber market share, a large unbanked population, and a culture of urban-to-rural remittance that gave the ‘Send Money Home’ proposition an almost self-evident logic.

Vodacom entered South Africa that same year, publicly targeting 10 million users within three years. Six years later, the service was discontinued with just 76,000 active users. Three separate launch attempts, including a 2014 relaunch with Visa card integration, failed to move the needle. The reasons were structural and visible from the start: over 75% of South African adults were already banked, major retail banks had extended affordable services to low-income customers, and FNB’s eWallet and Shoprite’s money transfer service were already competing for the underserved segment. Each relaunch adjusted the product’s features without ever interrogating whether the model’s fundamental premise was right for the market. As one industry analyst observed at the time, Vodacom assumed its experience in Kenya qualified it in South Africa. It was quite the opposite. The service was shut down in June 2016, a direct consequence of applying a model without ever asking whether it belonged.

Case Two: OPay in Nigeria – How Abandoning the Wrong Model Built a $2 Billion Business

OPay’s story is particularly instructive for a Nigerian audience, because it is a story that happened in Lagos, Abuja, and across the country’s markets and streets. When OPay launched in Nigeria in 2018, it arrived with a bold ambition: to become Africa’s equivalent of WeChat, the Chinese super app that had fused messaging, payments, transport, and commerce into a single indispensable platform.

In pursuit of that vision, OPay launched a dizzying array of verticals: ORide for bike-hailing, OFood for food delivery, OBus for bus-booking, OExpress for logistics, and OTrade for B2B commerce. The initial results were encouraging, particularly ORide, which found real traction in Lagos, where traffic congestion made affordable two-wheel transport genuinely valued. But Nigeria was not China, and the super app model that had succeeded in a market with a different regulatory architecture, consumer infrastructure, and digital payment rails was about to encounter the realities of the Nigerian market head-on.

In February 2020, the Lagos State government banned commercial motorcycle operations on major roads. ORide, OPay’s most visible service, effectively ceased overnight. OFood, OExpress, and OBus followed in short order, shut down in July 2020 amid the pressure of COVID-19 lockdowns, the Okada ban, and the fundamental economics of running logistics and transport verticals in Nigeria’s operating environment.

The company faced a crossroads. It could persist with the super app model in some form, or it could accept what the market was telling it and redesign around what was actually working. OPay chose the latter, and the results were transformative. Stripping back to its core financial services, OPay invested heavily in building an agent network designed specifically for Nigeria: mass-market, accessible, and deliberately targeting the millions of Nigerians who needed cash-in and cash-out services but had limited engagement with the formal banking system.

The strategy was not borrowed from China or adapted from another African market. It was designed from the ground up for Nigeria’s specific conditions: its USSD-based payment culture, its large informally employed population, its cash-intensive commerce, and the trust dynamic that makes face-to-face financial services transactions the dominant norm for tens of millions of Nigerians.

By 2022, OPay had over 30 million users, more than 500,000 agents, and had processed billions of naira in transactions. By 2024, it had grown to over 50 million users and was valued at $2.75 billion, processing over $3.5 billion monthly. The super app had failed. The Nigeria-first, agent-led financial services platform succeeded precisely because it was built on what Nigeria actually required, not on what had worked elsewhere.

Nigeria is not a market you can enter with a model borrowed from elsewhere. It rewards those who take the time to understand it on its own terms.

Case Three: Wave in Côte d’Ivoire – Getting the Second Market Right by Design

Wave launched in Senegal in 2018 with a model that was genuinely disruptive for West Africa: a flat 1% fee on peer-to-peer transfers, with zero fees on deposits, withdrawals, and bill payments. Orange Money had previously held a near-monopoly on the market, charging between 6% and 10% on transactions. Wave’s pricing restructured the competitive landscape entirely, forcing Orange Money and MTN Money to follow suit. Within a few years, Wave held approximately half of all mobile money accounts in Senegal and became francophone Africa’s first unicorn, valued at $1.7 billion.

The Côte d’Ivoire expansion, which began in 2019, could easily have been approached as a copy-paste exercise. Wave chose differently. Recognising that Côte d’Ivoire had a more entrenched mobile money market with established telco players and its own regulatory architecture under the BCEAO, Wave secured a first-of-its-kind electronic money licence directly from the BCEAO without relying on a telco or bank intermediary. It built a local leadership team with deep Ivorian market knowledge and adapted its agent float financing model to local cash-flow realities.

The outcome: over 20 million accounts and nearly 150,000 active merchants in Côte d’Ivoire as of 2024 (TriplePundit, 2025), and a subsequently launched commercial bank to deepen its financial services offering. Wave succeeded in its second market not because it replicated Senegal, but because it understood where Côte d’Ivoire was different and designed accordingly.

What Every Market Entry Must Examine

These three cases point to five diagnostic dimensions that no institution can responsibly skip when entering a new market. The regulatory architecture: not merely what licences exist, but how regulation shapes the competitive landscape and what it implicitly permits or forecloses. In South Africa, bank-centric regulation made telco-led mobile money structurally unworkable. In Nigeria, the CBN’s deliberate policy of promoting competition and platform neutrality meant that OPay’s super app model, which relied on owning both the distribution ecosystem and the consumer relationship, faced a very different operating environment from the one that spawned it.

The competitive landscape examined honestly: This includes informal actors: rotating savings groups, agent banking networks, USSD-based bank channels, and cash-based retail money transfer services. South Africa already had affordable money transfer solutions from banks and retailers. Nigeria already had USSD banking channels and deep cash handling habits that shaped what an effective distribution model had to look like.

Consumer behaviour and financial psychology: What people actually do with money, not what they say they want (Collins et al, 2009). Hofstede’s cultural dimensions provide one lens. But field-based research, observing how Nigerians actually transact, save, and manage risk across formal and informal channels, is more valuable than any theoretical framework applied from a distance.

The payment ecosystem: Which rails consumers trust and which instruments dominate. Nigeria’s NIBSS Instant Payment (NIP) infrastructure, its USSD banking penetration, and its deeply cash-reliant commerce ecosystem define the competitive environment into which any new entrant steps (EFInA, 2023). An institution that builds its product around payment methods its target market does not use, or that regulators constrain, has not entered the market. It has arrived at the wrong address.

Distribution architecture: The physical and human infrastructure through which financial services reach customers. OPay’s eventual success was built on understanding that in Nigeria, the POS agent is not a distribution channel of last resort. It is the primary financial touchpoint for tens of millions of people. EFInA data consistently reinforces this: last-mile agent access remains among the most critical determinants of financial inclusion for underserved Nigerians.

Conclusion

M-Pesa is one of the greatest financial inclusion innovations in history. OPay is now one of Nigeria’s most consequential fintech businesses. Wave has transformed payments in francophone West Africa. These are exceptional organisations. The cases above are not a critique of their capabilities; they are evidence that even the best models, applied without genuine market diagnosis, will underperform or fail entirely.

For senior financial services leaders in Nigeria, the practical instruction is clear: this market has its own logic, its own regulatory DNA, its own distribution realities, and its own consumer psychology. What succeeded in Nairobi, Dakar, or Shanghai carries limited transferable weight here. Treat every market entry as a research problem before it becomes a deployment decision. Invest in understanding the regulatory environment, competitive dynamics, consumer behaviour, payment ecosystem, and distribution architecture of the specific market you are entering.

And when the evidence challenges your assumptions, treat that as the most valuable information you have received. The leaders who have built enduring financial services businesses in Nigeria are not those who were most confident in their imported model. They are those who were most willing to question it.

About the Author

Obed Esejowho is Head of Business Management at M-KOPA Nigeria, where he leads marketing strategy, geographic expansion, and commercial operations. He writes on financial inclusion, market development, and strategic leadership in emerging markets.