Onafriq Winds Down Baxi Agent Banking in Nigeria Amid Macro Squeeze

TL;DR

• Pan-African digital payments network Onafriq is shutting down its Nigerian agent banking business, Baxi, after five years.
• The decision follows extreme inflation, currency depreciation, rising operating costs, and fierce competition from instant account-to-account payments.
• Onafriq is not exiting Nigeria entirely, shifting its focus exclusively to its core cross-border payments network and card-issuing services.

Pan-African digital payments network Onafriq announced that it is winding down Baxi, its Nigerian agent banking business, five years after its high-profile acquisition.

The company said the decision was influenced by macroeconomic pressures, currency devaluation, and shifting consumer payment habits. The move marks a strategic retreat from offline, cash-heavy physical distribution in Africa’s largest economy.

While the closure signals the end of an ambitious offline bet, Onafriq leadership insists it is not a departure from the market. Instead, Onafriq is shedding capital-intensive point-of-sale (POS) operations to double down on high-margin, software-driven cross-border payments and digital infrastructure.

“This decision is confined to the agent banking business in Nigeria and does not represent an exit from the Nigerian market. Onafriq Group remains strong, with continued growth across its cross-border payments network and card issuing services.” 

Anatomy of an Exit

Onafriq initially entered Nigeria’s offline payments economy in October 2021 by acquiring Capricorn Digital Limited. Capricorn Digital Limited was the operator of Baxi. At the time, Baxi boasted over 90,000 agents and processed billions in transactions. It was a critical bridge for cash-dependent populations.

However, the operating environment deteriorated sharply. By June 2024, Nigeria’s inflation surged to 34.2%. In the same year, the naira depreciated by 129%. This persistent inflation, coupled with dramatic naira depreciation, severely inflated operating inputs and hardware maintenance costs.

At the same time, consumer behaviour shifted. The growth of instant account-to-account bank transfers overshadowed traditional POS cash-in/cash-out services. Early 2024 data showed that internet transfers significantly outpaced POS transaction volumes.

This left offline agent networks caught between rising operational overhead and razor-thin margins. All while battling fierce competition from indigenous fintech giants like Moniepoint, OPay, and PalmPay.

Dare Okoudjou, CEO at Onafriq, said, “We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for” … “Closing this business was a difficult decision to arrive at, one that affects colleagues, agents, and business partners across Nigeria who poured their hearts and soul into building out the Baxi network.”

Affected agents have transitioned to alternative principal banks, with a 30-day window to settle balances, while impacted employees receive formal transition support.

From Cash-Heavy POS to Software-Driven Cross-Border Rails

Onafriq’s pivot reflects a broader industry realisation. Maintaining vast physical agency networks in high-inflation environments is increasingly unsustainable compared with asset-light, software-first architectures.

While offline POS agency models struggle with cash logistics and margin erosion, digital-first cross-border payment infrastructure is scaling rapidly.

Across the continent, fintechs and payment networks are aggressively migrating toward digital assets, tokenised rails, and stablecoin integrations. These are designed to eliminate foreign exchange bottlenecks and cut settlement costs.

Strategic collaborations, such as Onafriq’s stablecoin payment infrastructure integration and multi-party digital asset pilots with global giants like Visa and M-Pesa, point to where future growth and operational efficiency lie.

Onafriq is reallocating resources toward its core competencies. Its expansive pan-African cross-border payments network and card-issuing services are central to this strategy. The company will continue operating in Nigeria as a Payment Solution Service Provider (PSSP).

The Broader Shift Toward Digital Asset Infrastructure

Onafriq’s exit from offline agency banking reflects a wider African fintech pullback, as startups and infrastructure providers drop cash-draining businesses to reach profitability. Earlier in the year, several cross-border platforms, including Chimoney and Gigbanc, wound down operations.

For the broader ecosystem, this contraction underscores a decisive transition. Traditional, physical, cash-dependent models are giving way to frictionless, software-led corridors. Businesses increasingly demand instant, low-cost international settlements.

In response, companies are looking toward programmable digital currencies and stablecoin liquidity layers, such as those explored in Visa and Onafriq’s credit access initiatives, to future-proof their operations.

Onafriq’s recalibration proves that true scale in African fintech requires moving beyond surface-level physical footprints into robust, highly scalable digital execution.