Pan-African payments company Onafriq is winding down its Baxi agent banking operation in Nigeria, citing naira depreciation, rising costs, tighter margins and a rapid shift towards instant account-to-account transfers that has weakened the economics of its physical point-of-sale network.
The company stressed that the decision is limited to agent banking and does not amount to an exit from Nigeria. It plans to continue operating as a Payment Solution Service Provider through its wider payments network and card-issuing services.
That distinction matters because Baxi’s familiar yellow terminals and agent points are only one part of Onafriq’s business. The company’s broader infrastructure connects banks, mobile money providers, enterprises and other financial institutions across African markets.
Agents given transition period
Onafriq said agents registered through the Baxi platform have been transferred to another principal bank. They have also been asked to move their funds to a principal bank of their choice within 30 days.
The company said its teams would remain available to guide agents through the transition and honour existing commitments. Employees whose roles are directly connected to the agent banking operation will be consulted individually and supported during the closure process, according to the statement.
For agents, the immediate priority will be to confirm account balances, retain transaction records and follow only verified instructions issued through Baxi or Onafriq’s official support channels. Customers should also confirm that any agent they use is operating under an authorised provider before completing a transaction.
Why the business became harder to sustain
Onafriq identified several pressures behind the decision. It said trading conditions changed materially from 2024 as currency depreciation and wider economic strain increased the cost of running the network.
At the same time, the growing use of instant bank transfers altered the transaction mix passing through point-of-sale agents. More competition placed additional pressure on margins, leaving the company to review whether the business could remain sustainable over the long term.
The development illustrates how quickly Nigeria’s retail payments market is changing. Agent banking expanded access to withdrawals, transfers, bill payments and account services in communities where conventional bank branches were limited. It also became a source of income for thousands of small operators.
Yet the same digital shift that helped agent networks grow is changing customer behaviour again. Many consumers now use account-to-account transfers for payments that might previously have required a cash withdrawal or card terminal. Operators must still cover technology, support, compliance and agent-management costs even when transaction values or margins come under pressure.
Five years after the Baxi acquisition
Onafriq, then known as MFS Africa, entered Nigeria’s agent banking market in 2021 by agreeing to acquire Capricorn Digital Limited, the company behind Baxi. The acquisition was completed in March 2022 after approval from the Central Bank of Nigeria.
Baxi had built a network of more than 90,000 agents before the acquisition. Its services included withdrawals, transfers, bill payments and account opening, giving Onafriq a physical distribution route to consumers and small businesses alongside its cross-border payments infrastructure.
The company continued investing in the network through 2023, but later concluded that the operation was no longer producing the expected outcome. Founder and chief executive Dare Okoudjou described the closure as difficult because of its impact on employees, agents and business partners.
He nevertheless said that “Nigeria remains central to our mission”, signalling that the group sees continued value in the market even as it changes its operating model.
A test for financial inclusion
The winding down of a large agent network raises questions about how financial institutions can maintain convenient access to services while customers move towards digital transfers. Agent banking remains important for people and businesses that depend on cash, live far from branches or need assistance with digital transactions.
The closure does not mean that Nigeria’s agent banking sector is disappearing. Other banks and financial technology companies maintain extensive networks. It does, however, show that scale alone does not guarantee profitability when operating costs rise and payment habits change.
Onafriq’s official platform says its broader network connects one billion mobile wallets, 500 million registered bank accounts and payment partners across more than 40 African countries. Its services include pay-ins, payouts, card issuance and treasury support.
The company’s decision therefore looks less like a retreat from African payments than a move away from one costly physical channel. The transition will be judged by whether agents can move their funds without disruption, employees receive the promised support and customers retain reliable access to regulated alternatives.
Baxi agents affected by the closure should use official company channels to confirm deadlines and migration instructions, while regulators and principal banks should ensure that outstanding balances, complaints and service obligations are resolved transparently.
