OPay Aims To Stake USD 60 M On Bold Neobank Play In Egypt

OPay, one of Africa’s leading providers of financial technology and electronic payments solutions, has announced its intention to apply for a license to establish a digital bank in Egypt with a capital of USD 60 M, according to the rules for licensing and registration of digital banks, and control and supervision recently issued by the Central Bank of Egypt.

Since launching in Egypt at the start of 2021, OPay has made significant inroads, boasting thousands of merchants that utilize its point-of-sale (POS) devices to collect bills and other payments. The Opera-backed startup, which now appears keen to tap into markets in the Middle East and North Africa, is banking on wooing the Egyptian market with its app-based consumer banking solutions which have seen some measure of success in its primary market Nigeria.

OPay stormed the Nigerian market in 2019 with ample backing from a consortium of Chinese investors and initially looked to offer multiple services not unlike a super app; from e-hailing and logistics to classifieds. The startup however nixed those multiple verticals to focus solely on financial services from 2020 onwards, which may have always been the plan despite sentiments that regulatory upheavals forced its hand.

“Payments were always our focus. We did not pivot. Those services were value-added to support the main business. When we shut them down, we quickly adapted to the regulatory change and doubled down on the payment business. That decision paid off tremendously,” Olu Akanmu, outgoing President and Co-CEO of OPay Nigeria, reiterated in a recent interview with Big Tech This Week.

Currently, OPay boasts 35 million registered app users and 500,000 agents, making it one of the biggest mobile money players in Nigeria, while reportedly valued at around USD 2 B; one of Africa’s few tech unicorns.

The startup saw something of its biggest boon earlier this year and became hugely popular in instant digital peer-to-peer/bill payments when Nigeria suffered a cash shortage crisis earlier following a tumultuous attempt at banknotes reform. Savings, loans, and cards are also among its products in Nigeria, and merchants/agents wielding its conspicuous mint-green POS devices are a common sight.

OPay would be looking to replicate some of that success with its latest move in Egypt, a market that Akanmu considers to be fundamentally similar and hence, a good fit for their expansion effort. Key to these efforts is a shift in the evolving regional regulatory landscape which is now opening up to digital solutions that can accelerate financial inclusion, after decades of operating a closed-off system.

“The common thread among the markets where OPay operates is that they are countries with large populations and a significant number of people who have historically been excluded from financial services. This disparity informs our decision to operate in these countries because our goal is to provide greater financial inclusion for those who need it most,” Akanmu had emphasised in the interview referenced earlier.

OPay aims to enhance its services with innovation and the latest technological solutions to meet the needs of the Egyptian market, a press release shared with WT reads, and facilitate the conduct of financial and banking transactions for customers. “The company will work through the digital bank to provide lending, savings and card services via the Internet without the need for customers to go to branches, in addition to OPay services to accept payments such as POS, digital payment gateway, and electronic wallets,” it adds.

Mahmoud Khedr (pictured in featured image), Director of Business Development and Partnership at OPay, said the value of OPay’s sales in the region has amounted to more than USD 50 B while emphasising the company’s track record.

“OPay is qualified to make a breakthrough in this industry as it has 5 years of experience in the financial technology sector in the countries in which we operate, which represents a real impetus towards achieving success and achievement in Egypt,” he says.

“We are excited to obtain a license to establish a digital bank in Egypt, and to work hand in hand with the Central Bank of Egypt and all concerned authorities to start this step, which represents a new beginning to keep pace with global developments in the field of financial technology,” Khedr adds.