Unlock Editor’s Digest Lock for Free
This is a crowded field for many Nigerian fintech startups competing for slices of markets in Africa’s most populous countries, making it difficult to stand out.
But that’s not the case with PalmPay, a mobile payments app operator who launched in 2019 with a $40 million seed funding round led by Transion, the biggest Chinese mobile phone manufacturer to African startups.
Two years later, another $100 million funding round followed, and the course was drawn to become one of Nigeria’s biggest fintechs. Palmpay first appeared on the list of the Financial Times, the fastest growing company in Africa this year, with the ranking in second place highlighting the growth that followed.
Supported by several other Chinese investors, including internet technology companies Netease and Venture Capital Funds, Palmpay has begun operating as the so-called Neobank, part of a growing cohort of mobile app-based companies offering accounts in Nigeria. The services range from paying utility bills to transferring near instant banks and top-up mobile phone broadcast times.
Palmpay aims to be a “super app” for finance, offering multiple services
PalmPay operates a dual “smartphone-first” strategy, saying it has 35mn users through a network of mobile money merchants and agents for 35MN registered users of mobile apps on Android and iOS, as well as a network of mobile money merchants and agents for customers who don’t have the technical skills to use the product online. The company believes face-to-face services are potential “lamps” that users will ultimately digitize. We also have around 1 million to medium-sized business clients.
Sofia Zab, Chief Marketing Director at Palmpay, who has been involved with the group since its launch, says the key to the company’s success is focusing on serving large sections of Nigeria who feel excluded by traditional banks or are dissatisfied with the troublesome requirements of opening a bank account or taking away loans.
“Our ultimate competition was cash,” Zab says of a country where cash remains king. “For us, it was about using cash restaurant transactions that are more convenient or rewarding than using cash to digitalize transactions and change consumer behavior.
Sofia Zab, chief marketing officer at Palmpay, says the company’s vision is to “create a comprehensive mobile banking platform that will deliver all your financial needs in one place.”
However, Palmpay’s customer base growth is also supported by transchantion, which supports the popular Tecno, Itel and Infinix mobile phones. All trans phones for sale in Nigeria are pre-installed with the PalmPay app.
According to Chivzoll Mera, Vice President of Partnerships, Palm Pay has lowered barriers to intrusions into banking services, but Palm Pay still has a robust “knowing the customer” guardrail against fraud and money laundering. “We did what the banks did in a more innovative way,” he says.
Palmpay has expanded to Tanzania and Bangladesh with its consumer services, and is operating inter-business operations in Ghana and South Africa.
We aim to provide multiple services and become a financial “super app.” The company offers loans and insurance products through third-party partnerships with microfinance banks and insurance companies. According to ZAB, 1 million PalmPay users filmed insurance products and worked with three insurers to encourage customers to go digital.
“In Nigeria, I think we’re already cute (it’s become a super app),” she adds. “Our vision is to create a comprehensive mobile banking platform that will deliver all your financial needs in one place.”
Given China’s funding for Palmpay, its “SuperApp” strategy compared to Alipay and Wechat’s strategies, pulling out the drive to make X what Elon Musk calls “The Everything App.”
But Zab says the comparison isn’t always that easy. “We are inspired by market leaders in other regions. You are inverted to Wechat and Alipay in China, Nubank in Latin America, across Europe. But it’s important to note that you’re not just trying to build an X for Africa.
