TeamApt with CBN Switching License Goes Into Interswitch Territory in Nigeria

TeamApt with CBN Switching License Goes Into Interswitch Territory in Nigeria

TeamApt, a Lagos-based fintech startup, which just raised $5.5 million, has been awarded a switching license by the Central Bank of Nigeria. The license powers AptPay, one of TeamApt’s products, to lead a financial revolution as it provides solutions for different customer segments in the Nigerian society. TeamApt Limited has a customer base of 26 banks across Africa, including Zenith, ALAT by Wema, UBA, First Bank, GTBank and Access Bank.

Another bucket of money arrives in the fintech space in Lagos. TeamApt, a payment startup supplying solutions to some leading Nigerian banks like Zenith, UBA and ALAT, has raised $5.5 million from Quantum Capital Partners, an investment firm founded by Zenith Bank’s Jim Ovia. The investor wrote the whole cheque.  According to the company, founded in 2015, it serves 26 African bank clients and processes $160 million in monthly transactions, growing revenue at 4,500 percent over a three year period. With this money, the company wants to expand into Canada and Europe.  And TeamApt plans another destination: NASDAQ.

TeamApt CEO, Tosin Eniolorunda, describing the impact of the license says “It is the highest license awarded to any fintech by the CBN because the license allows you to put all the banks together and be able to debit their banking position with the central bank. What this translates to is that with AptPay, TeamApt can actually move money across the banks without putting our money down. This license puts TeamApt on the same level as other Tier-1 financial technology companies.”

I must say that TeamApt has moved to the upstream in the payment system domain while operating at the edges of the switching curves. And will create more value than most typical fintech startups in Nigeria today.

Largely, as explained by the startup CEO, “If through a payment gateway, a buyer pays a merchant for a product and the payment gateway provider needs to pay the merchant instantly, without the license, the provider will have to pay with its own money. But with the license, the provider is merely moving the bank funds around without tying down its money”. Yes, it does not have to tie its money because it is operating at the edges where the best values reside. AptPay has the ‘last piece to the matrix’ in the payment solution space in Nigeria.

Simply, Interswitch has a real competitor now. With the switching license TeamApt has, it can process transactions between service providers and customers directly. That used to be the only exclusive domain of Interswitch. Possibly, this competition will improve services and reduce some notable paralyses in the nation’s financial services like the persistent failures in the PoS terminals.

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