Nigeria’s fintech sector is growing at a fast pace. There’s a massive influx of new startups and funding. And it’s not over yet as Africa-focused payment company, PalmPay has officially launched in the Nigerian financial space after raising $40 million in a seed fund round.
According to TechCrunch, this funding was led by Chinese mobile-phone and device maker, Transsion Holdings with participation from China’s NetEase and Taiwanese wireless comms hardware firm Mediatek.
Although just publicly launched, PalmPay has been around in Nigeria since July running a beta test with a limited number of customers. During this period, the platform received its license as a mobile money operator from the Central Bank of Nigeria (CBN).
As with every other mobile payment platform, PalmPay offers users a mobile wallet with which they can top up funds electronically or at offline access points, make and accept payments, pay bills, buy airtimes and other services.
And according to the company, during the beta phase, it had registered 100,000 users and processed 1 million transactions. This shows an average of 10 transactions per user, which is a fair one for a beta period which had loads of discounts initiatives.
Now with this ‘fund chest’, Palmplay promises to offer discount on airtimes purchases and bank transfer rates as low as N10 in Nigeria. It will also use the funding to grow its services in Ghana with plans to expand to more countries in 2020.
But in all of this, what chance does it stand in the competitive and ever-growing mobile payments space in Nigeria?
For one, PalmPay has the funds. Despite just launching, PalmPay already has a huge war chest of funds to go toe-to-toe with almost all its competitors – save OPay which has raised more.
And with $40 million of funding, PalmPay has enough to aggressively grow its numbers in Nigeria over the next few years. And if it gets its strategy right with such huge cash, it could become one of the fastest growing fintech solutions in Nigeria.
On strategy, PalmPay’s CEO, Greg Reeve is no newcomer in the African fintech space. With over 10 years of experience in the space, including in top positions like the global head of Visafone’s M-Pesa, his leadership experience will definitely come in handy if PalmPay is to break into the nascent space in Nigeria – and eventually Africa.
Also PalmPay had earlier in April partnered with global payments technology company, Visa. This partnership allows Visa cardholders initiate payments within the app and make online and mobile payments with their cards and for non-card carriers to generate a virtual Visa card upon registration – allowing them variety of financial products offered on Visa’s network.
Interestingly, since it’s jointly owned by Transsion Holdings Group, makers of the Itel, Infinix and Tecno brands, this means PalmPay stands a chance of having its app pre-installed on future models of these phones.
For a while now, Transsion has been in pole position of the smartphone race in Africa, mainly due to the affordable and impressive devices. So as a widely used brand in Africa, PalmPay’s partnership with them potentially puts its app in the hands of a large population of African, making expansion easier.
One thing is sure, the market is very competitive and as such it will not be a walkover. But then, it is safe PalmPay could witness massive growth over the next few years.
In all, it means more competition, and of course more options for users. Let the games continue!