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GTBank closes in on payment disruptors with Holdco licence

Payment companies like Paystack, Flutterwave, and Interswitch may be enjoying the time of their lives in Nigeria’s market but a big splash by GTBank on its proposed payment company could tilt the balance.

The shares of Guaranty Trust Bank (GTBank) were suspended on Friday in anticipation of the kick-off of the bank’s holding company structure.

The holding company (Holdco) structure which may be coming about a quarter late would enable Nigeria’s biggest lender by market value to consolidate its businesses into one group with payment and asset management subsidiaries. In 2020, Segun Agbaje the bank’s CEO had said during a conference call for investors, that the Holdco structure was expected to go live by the first quarter of 2021.

The structure also means the bank would now list as Guaranty Trust Holding Company Plc on the Nigerian Stock Exchange (NGX).

“The suspension is necessary to prevent trading in the shares of the bank in preparation for the eventual delisting of Guaranty Trust Bank Plc from the Daily Official List of the Nigerian Exchange Limited (NGX) and listing of the Holding Company, Guaranty Trust Holding Company Plc on NGX,” a statement from the exchange noted.

GTBank is expected to swap on a one-on-one basis its outstanding shares of 29.431 billion units for the shares in the succeeding holding company

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BusinessDay had reported in March that GTBank was recruiting talents for its soon-to-be payment company, Habari Pay. In a vacancy advert, BusinessDay found on LinkedIn, GTBank described HabariPay as a young start-up on the path to building a truly pan-African payments unicorn.

“We know we can do it – with a high-impact founding team and the backing from a multinational financial services company,” the bank noted. Although GTBank has since deleted the recruitment advert after this paper’s publication, the bank’s plan to float a payment company as part of its Holdco ambitions is not a secret.

At the conference call for investors in the first quarter of 2020, Agbaje had said the Holdco licence would enable the bank to operate as a payment company of the fintech genre modeled after WorldPay.

Before WorldPay became known as a globally renowned payment processing company, it was merely providing an end-user payment gateway as a subsidiary of National Westminster Bank in 1995.

It took two acquisitions, one in 2002 by Royal Bank of Scotland Group and the second by Fidelity National Information Services (FIS) in 2019, and a series of expansion projects for WorldPay to emerge among the top three largest payment processing companies in the world. The firm now has a 42 percent share in the UK payment market and a wide reach into online transactions through its global e-commerce division.

GTBank is also hoping to establish itself as a competitor in a market already dominated by the likes of Paystack, Flutterwave, and Interswitch.

Paystack controls about 15 percent of the online payment market in Nigeria. The acquisition by Stripe gives it financial leverage to penetrate new African markets. Recently, it opened a new office in South Africa, the third country it is launching in.

But while Paystack and the others have brought disruption to the market, they have also not ticked all the boxes in customer service. Stories of unfulfilled customers’ expectations continue to arise and grow.

In a particular story, a customer narrated to BusinessDay, he had complained that a fintech company he used to address a recurrent debit issue which saw his account being debited for an old subscription even though he had migrated to a new subscription. The issue was not was not fixed.

A company that runs a subscription service said most of the payment services do not have capacity to accommodate businesses in that segment, hence things often go wrong that require a lot of back-and-forth between the business and the payment company.

“It is unlike Stripe that has a robust service and global subscription clients, so they can easily anticipate the needs of these customers,” the company’s spokesperson said.

As the complaints grow, GTBank’s new payment service may find itself given an opportunity to disrupt the companies that have equally capitalised on consumer gaps in the financial services sector to disrupt payment services.

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