In a move that is expected to further boost its plans of expanding beyond Nigeria and Africa, Paga — a Nigerian fintech startup that specializes in payments — has partnered with Visa on payments and financial technology for Africa and abroad.
Since its founding in Lagos at the beginning of the last decade, Paga has raised up to USD 34 Mn in venture capital with the last fundraise being the USD 10 Mn Series B snapped up in 2019.
Founded in 2009, Paga has created a multi-channel network to transfer money, pay bills, and buy things digitally.
The company boasts 14 million customers in Nigeria who can transfer funds from one of Paga’s 24,000+ agents or through the startup’s mobile apps on iOS or Android, or via USSD in feature phones. There are also remittance partnerships with the likes of Western Union to boot.
During the announcement of Paga’s acquisition of Apposit in January this year, Paga’s CEO, Tayo Oviosu, told TechCrunch that the startup has processed 104 million transactions worth USD 6.6 Bn since inception.
Having scaled in its fintech business in Nigeria, Paga is now eyeing expansion and entry into Ethiopia via Apposit was the first play.
The startup is also understood to have opened an office in Mexico and operations are slated to kick off fully in the Central American nation sometime this year. And the freshly-minted partnership with Visa will certainly help these expansion efforts.
The new arrangement will allow Paga account holders to transact on Visa’s global network. It will also see both companies work together on tech.
According to Oviosu, Visa and Paga’s engineering teams have already started working together and Paga expects to roll-out these new options in Nigeria sometime in second-quarter 2020.
The collaboration reflects Visa’s strategy to expand in Africa working with the continent’s top startups. Last year, another Nigerian payment company, Interswitch, reached a USD 1 Bn valuation after Visa took a minority stake, reportedly for USD 200 Mn.
Although Visa’s partnership with Paga does not include investment in the startup, it is expected to drive larger payment volumes for both companies — and Visa’s priorities in Africa.
“We want to digitize cash, that’s a strategic priority for us. We want to expand merchant access to payment acceptance and we want to drive financial inclusion,” said Otto Williams, Visa’s Head of Strategic Partnerships, Fintech and Ventures for Africa.
The Paga-Visa arrangement will also bring new merchant options to Paga’s network.
“Based on the partnership, we’re going to launch QR codes and NFC [payments] into the market in Nigeria — alternative ways of receiving payments than bringing out a physical card,” said Oviosu.
Apart from venturing into venture capital investments with last year’s minority stake acquisition in Interswitch, Visa has strengthened its Africa strategy in recent times by entering into collaborations with top African fintech companies even before now.
The global financial services company had previously partnered with B2B payments company, Flutterwave, and South African startup, Yoco, which is focused on enterprise payments services and hardware for SMEs.