Onafriq, the pan-African digital payment platform, has announced plans to wind down its Baxi agent banking business in Nigeria after rising operating costs, currency depreciation, and intensifying competition weakened the sustainability of its offline payment operations.
The decision marks a strategic retreat from Nigeria’s agent banking market for a business that Onafriq acquired in 2021 to expand its presence in Africa’s largest economy.
However, the company has clarified that the shutdown of its agent banking platform does not represent a complete exit from Nigeria, as it intends to continue operating through its cross-border payments network and card-issuing services.
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According to the company, changes in Nigeria’s operating environment since 2024 have significantly altered the economics of running its agent banking business, affecting transaction volumes, operating expenses and profit margins.
The rapid adoption of instant account-to-account transfers has also changed consumer payment behaviour, while growing competition has made it increasingly difficult for offline payment providers to sustain their businesses.
How Baxi Became Part of Onafriq
In October 2021, Onafriq announced an agreement to acquire Capricorn Digital Limited, the Nigerian fintech company operating under the Baxi brand, in a transaction designed to expand its presence in Africa’s largest economy.
The agreement, announced on October 20, 2021, marked a significant step in the pan-African payments company’s expansion strategy. The acquisition was subsequently completed on March 28, 2022, after receiving approval from the Central Bank of Nigeria.
Although the financial terms were not disclosed, the transaction was described at the time as one of Nigeria’s largest fintech acquisitions.
Before the acquisition, Onafriq had established a payments network connecting banks, mobile money operators and other financial service providers across multiple African markets.
However, its presence in Nigeria remained limited, partly because the country’s payments landscape differed from markets where mobile money wallets were more widespread.
Nigeria’s financial services market relied heavily on banks, electronic transfers and physical payment distribution networks. Consequently, entering the market required more than a cross-border payments infrastructure; it also required access to the businesses and agents serving consumers on the ground.
Baxi offered that opportunity. The platform had developed an extensive network of agents and merchants providing essential financial services to consumers and small businesses.
Its operations complemented MFS Africa’s existing infrastructure, creating an opportunity to connect Nigeria’s domestic payment ecosystem with a broader international network.
By acquiring Baxi, MFS Africa sought to establish a stronger foothold in Nigeria while extending its ability to facilitate payments between Nigerian businesses and other African markets.
The company also intended to use Baxi’s distribution network to expand access to its services among small and medium-sized enterprises.
Baxi specialised in domestic payment distribution, connecting consumers and small businesses to financial services through physical agents, merchants and digital payment channels.
MFS Africa, on the other hand, focused on connecting payment systems across borders through a unified technology infrastructure. Its network enabled participating financial institutions and payment providers to facilitate transactions across different markets.
The combination was intended to bridge the gap between domestic payments in Nigeria and cross-border transactions across Africa and beyond.
Baxi’s acquisition had already provided an important entry point into Nigeria, one of the continent’s largest markets for financial services and digital payments. The transaction also illustrated how strategic acquisitions could help payments companies overcome market-entry barriers by acquiring established local operations rather than building distribution networks from scratch.
However, the long-term success of such a strategy depends on whether the acquired businesses can remain commercially sustainable as economic conditions, customer preferences and competitive pressures change.
Onafriq’s subsequent decision to wind down Baxi’s agent banking business in October 2026 illustrates that challenge. Although the acquisition initially offered a route into Nigeria’s domestic payments market, changing operating conditions ultimately prompted the company to reassess the sustainability of that particular business model.
Notably, the winding down of Baxi’s agent banking operation marks the end of a significant chapter in Onafriq’s Nigerian expansion strategy.
The company entered the market with the ambition of combining a nationwide distribution network with its pan-African payments infrastructure. However, changing economic conditions and competitive pressures have forced it to reconsider that approach.
Whether its continued focus on cross-border payments and card-issuing services will create stronger opportunities in Nigeria remains to be seen.