Onafriq, the pan-African payments company, has announced the closure of its Baxi agent banking business in Nigeria, citing a combination of economic and market pressures that have made its operations unsustainable. The company, which acquired Capricorn Digital Limited, the operator of Baxi, in 2021, pointed to persistent inflation, naira depreciation, rising operating costs, and increasing competition as key factors behind the decision.
Baxi's Network and Financial Difficulties
Baxi had built a network of more than 460,000 agents as of 2025, providing services to customers who relied on PoS terminals for cash withdrawals, transfers, bill payments, and other transactions, according to TechCabal. However, the size of its network did not prevent the business from experiencing financial difficulties. Onafriq said the economic environment had weakened the commercial viability of its Nigerian agent banking business.
Five Reasons Behind the Shutdown
Onafriq outlined five primary reasons for the closure:
- Rising operating costs: Running a large agent banking network requires spending on technology, infrastructure, staff, and other operational activities. As these expenses increase, payment providers must generate enough revenue from transactions to cover their costs and remain profitable.
- Persistent inflation: Inflation has increased the cost of doing business in Nigeria, putting pressure on companies across several sectors. For agent banking providers, higher expenses can reduce the amount left from transaction fees and other revenue after operating costs have been paid.
- Naira depreciation: Currency weakness can increase the local-currency cost of technology, equipment, and other expenses linked to foreign currencies. Combined with inflation and rising operational expenses, the weaker naira added to the challenges of maintaining a profitable agent banking network.
- Growing competition and shrinking profit margins: Nigeria's PoS market has attracted a growing number of operators and agents, increasing competition for customers and transactions. Onafriq said competition and shrinking margins had made its offline agent banking operations increasingly difficult to sustain.
- Increasing use of instant bank transfers: The growing adoption of instant account-to-account transfers has changed how Nigerians make payments. Customers can now transfer money directly between bank accounts through digital banking channels without necessarily visiting a PoS agent.
Transition and Support for Baxi Agents
As part of the shutdown process, Onafriq said Baxi agents had been transitioned to another principal bank and given 30 days to transfer their funds to their preferred principal bank, according to Punch. The company also said its support teams would assist agents during the transition. Onafriq stated it will keep other payment operations running in Nigeria.
Context: PoS Transaction Growth
Earlier, Legit.ng reported that the value of transactions over Point of Sales (PoS) terminals in Nigeria surged to N18 trillion in 2024, hitting an all-time yearly record. This was based on data obtained from the Nigeria Inter-Bank Settlement System (NIBSS). Driven by a prolonged cash shortage at ATMs and the aggressive expansion of PoS deployments by fintech companies, the 2024 record marked a 69% increase compared to the N10.7 trillion value of PoS transactions in 2023.
