How a Lagos fintech cracked Africa’s hardest payments puzzle with N60 transactions

In a small office on Adeola Odeku Street in Victoria Island, Lagos, a young fintech startup was trying to solve a problem that many global payment companies had largely ignored.

The challenge looked simple but was one of the hardest in digital finance: how do you make a payment worth just N60 or N100 profitable?

Today, that startup, Touch and Pay Technologies (TAP), has grown into one of Africa’s leading micro-transaction payment companies, processing millions of low-value transactions that power public transport, government collections and everyday commerce across Nigeria.

Its journey, recently reflected on by entrepreneur, investor and board member Ndubuisi Ekekwe, is becoming an important case study for African fintechs looking to build businesses around local realities rather than imported business models.

“I first met them in a modest office on Adeola Odeku Street in Victoria Island, Lagos. They had a small piece of technology, but I was completely sold on the vision,” Ekekwe wrote in a recent LinkedIn post.

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That vision belonged to founders Olamide Afolabi, Kabir Yabo and Michael Oluwole, who believed Africa needed payment infrastructure designed specifically for its own economy instead of technology borrowed from developed markets.

While international payment networks have built highly efficient systems for larger transactions, Africa’s informal economy depends heavily on payments that are often worth less than N200. Processing such small amounts through conventional payment rails can leave almost no room for profit because transaction costs consume much of the value.

Rather than adapting existing global systems, TAP developed its own payment protocol that could process tiny transactions at much lower costs while remaining reliable enough for high-volume daily use.

That decision has become the company’s biggest competitive advantage.

Its technology now powers payment systems used by governments, transport operators and businesses, including Lagos’ widely used Cowry Card and the Ije Card, helping commuters make seamless digital payments while improving fare collection.

The company’s rise also highlights a broader shift taking place across Africa’s technology ecosystem.

For years, many startups attempted to replicate successful products from Europe, Asia or North America. While some attracted investor interest, many struggled because they failed to account for Africa’s unique infrastructure, pricing realities and consumer behaviour.

TAP took the opposite approach.

Instead of asking how global payment systems worked, the company focused on why they did not work efficiently for Nigeria’s markets, buses, informal traders and public transport systems.

“The lesson is timeless. Learn from global innovations, but build for local realities. Great companies are not created by copying the world; they are created by understanding local market frictions and engineering solutions that fit,” Ekekwe noted.

Industry observers say that philosophy increasingly defines the next generation of African technology companies.

As governments push for greater financial inclusion and digital payments, there is growing demand for infrastructure capable of handling millions of low-value transactions every day without significantly increasing costs for merchants or consumers.

The opportunity extends well beyond transport.

Affordable micro-payment infrastructure could accelerate digital collections for utilities, education, healthcare, retail and other sectors where cash still dominates because electronic payment costs remain relatively high for small purchases.

TAP’s progress has also attracted international recognition. The company is backed by Y Combinator through its Winter 2022 batch, joining a select group of African startups that have secured support from the Silicon Valley accelerator while building solutions rooted in local market realities.

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For Ekekwe, who became both an investor and board member after his first meeting with the founders, the company’s evolution reflects the value of patient capital combined with founders solving practical problems rather than chasing global trends.

From a modest office in Victoria Island, TAP has built technology that quietly powers millions of everyday transactions across Nigeria, demonstrating that some of Africa’s biggest fintech opportunities may not lie in billion-naira transfers but in making a N60 payment fast, affordable and profitable.

Its story underscores an increasingly important lesson for Africa’s digital economy: the continent’s next technology champions may not be those that copy global innovations, but those that redesign them for local realities.