Onafriq shuts down its Nigerian agent banking business after five years

Onafriq is shutting down Baxi, its Nigerian agent-banking business, after five years. Baxi used physical agents to provide cash deposits and withdrawals, account opening, transfers, and bill payments. The company says inflation, naira weakness, rising costs, lower transaction volumes, and instant transfers made this model unsustainable.

Onafriq entered through its 2021 acquisition of Capricorn Digital, Baxi’s operator. In 2021, Baxi had over 90,000 agents and processed more than $1.6 billion. Its agents connected people relying on cash with formal financial services. But fintech rivals such as Moniepoint, OPay, and PalmPay intensified competition.

Agents are moving to another principal bank and must transfer funds within 30 days. Onafriq will keep operating in Nigeria through payments and card-issuing services. This is a withdrawal from offline agent banking, not from Nigeria. Internet transfers reached 11.6 billion in the first half of 2024, versus 6.3 billion PoS payments.

Agent banking lets customers use nearby agents for financial services instead of visiting a bank branch. Agents act as local service points, helping people who depend on cash access accounts and payments.

Baxi agents offered cash-in and cash-out services, account opening, money transfers, and bill payments. A customer could visit an agent to deposit or withdraw cash, open an account, send money, or pay a bill. Baxi connected this physical network to Onafriq’s wider payments infrastructure, extending services beyond traditional bank branches.

Baxi launched through Onafriq’s 2021 acquisition of Capricorn Digital and had more than 90,000 agents then. Internet transfers reached 11.6 billion in the first half of 2024, versus 6.3 billion PoS payments. Inflation, naira depreciation, and competition from Moniepoint, OPay, and PalmPay made the model unsustainable. Onafriq is winding down Baxi, while continuing Nigerian payments and card services.

When Onafriq acquired Capricorn Digital in October 2021, Baxi already had a huge Nigerian agent network. It had more than 90,000 agents and processed over $1.6 billion in transactions that year. That scale gave Onafriq a direct presence in Nigeria’s cash-based payments economy.

Baxi’s agents offered cash deposits and withdrawals, account opening, transfers, bill payments, and other services. Onafriq planned to connect this physical network with MFS Africa’s cross-border payments infrastructure. The acquisition supplied distribution, while Onafriq brought broader payment connections.

The network’s size did not guarantee lasting success: in 2024, instant account-to-account transfers reached 11.6 billion, versus 6.3 billion point-of-sale payments. Competition from Moniepoint, OPay, and PalmPay, plus inflation and naira depreciation, increased pressure. Onafriq is now winding down Baxi while continuing Nigerian payments and card services.

An agent network depends on many small transactions covering staff, technology, cash handling, and location costs. When prices rise and the naira loses value, those costs increase while each transaction produces less value in dollar terms. Margins then shrink until maintaining thousands of physical agents no longer pays.

In 2024, the naira lost roughly 129% of its value, falling to ₦1,479 per dollar. Nigeria’s inflation reached 34.8% in December 2024, making operating inputs more expensive. Lower trading volumes also meant fewer fees to spread across those rising costs.

Customers were shifting toward instant account-to-account transfers. Internet transfers reached 11.6 billion in the first half of 2024, versus 6.3 billion PoS payments. Competition from Moniepoint, OPay, and PalmPay added pressure, so Onafriq concluded Baxi’s offline model was unsustainable.

Instant account-to-account transfers let people move money directly between bank accounts, without handing over cash or visiting a point-of-sale agent. Their rapid spread changed everyday payment habits and weakened large offline agent networks. They also made payments faster and reduced reliance on physical cash.

Baxi shows the impact. Its agents offered cash deposits, withdrawals, transfers, and bill payments, but customers increasingly chose instant digital transfers instead. This reduced trading volumes for agents, while inflation, naira depreciation, and rising costs squeezed their margins.

The numbers show the change clearly. Internet transfers reached 11.6 billion in the first half of 2024, compared with 6.3 billion PoS payments. As transfers became more common, Moniepoint, OPay, and PalmPay dominated agent banking. Onafriq then closed Baxi while retaining other Nigerian payment services.

Moniepoint, OPay, and PalmPay intensified competition in Nigeria’s agent-banking market. Their growth helped them dominate PoS services, weakening Baxi’s position and adding pressure to its business.

Baxi depended on a large physical network offering cash services, transfers, bill payments, and account opening. This gave agents and customers more alternatives, making it harder for Baxi to sustain volumes and margins. The rivals competed for similar customers and transactions.

The article does not quantify how much business Baxi lost specifically to each competitor. However, Internet transfers reached 11.6 billion in the first half of 2024, versus 6.3 billion PoS payments. This shift away from cash-based transactions further reduced the value of Baxi’s offline model. Onafriq said rising costs, weaker volumes, and margin pressure made the business unsustainable. It is winding down Baxi after five years.

Inflation means prices rise, so a business pays more for fuel, rent, equipment, wages, and other everyday needs. Currency depreciation means the local currency buys less foreign currency, making imported technology, hardware, and services more expensive.

Baxi shows how these pressures can weaken a physical network. Nigeria’s naira lost roughly 129% of its value in 2024, while inflation reached 34.8% in December. For agents, higher costs squeezed margins, while customers’ lower spending could reduce transactions.

Onafriq said these pressures, alongside lower trading volumes and instant transfers, made Baxi’s offline model unsustainable. Internet transfers reached 11.6 billion in the first half of 2024, versus 6.3 billion PoS payments. Businesses with physical infrastructure must therefore control costs, protect margins, and adapt as customers move to digital channels.