Fintava Pay Tackles Northern Nigeria’s Unbanked Population

The catchphrase for Nigerian fintechs during the 2020–2023 fintech boom was “banking the unbanked.” The assertion that they would bank 36% of Nigeria’s adult population, or 28.8 million individuals without access to financial services, was repeated by other fintech companies. But just a small number of fintech companies fulfilled that promise outside of Lagos, Nigeria’s startup and economic hub. 

Fintava Pay, a Banking-as-a-Service (BaaS) platform, was introduced in 2022 by Tobi Arowolo, Samuel Ojerinde, and Isaiah Tokunbo. It enables companies, including cooperative societies, agent networks, and microfinance banks, to introduce customized financial products with the goal of promoting financial inclusion in Northern Nigeria. Fintava Pay offers white-label banking solutions to companies, super agents, and microfinance institutions, allowing them to provide customized financial services to their own communities, in contrast to typical fintechs that create direct-to-consumer apps.

The strategy of Fintava Pay is especially helpful in Northern Nigeria, where there is a high rate of financial exclusion and low levels of digital literacy. Approximately 47% of people in the North West and 38% of people in the North East are economically excluded. People in this area depend on super agents to conduct financial operations and obtain cash. Fintava Pay provides a lifeline by enabling super agents to establish bank accounts for consumers using its white-label solutions. 

In addition to using transaction verification techniques that do not rely on smartphones—which are still rare in the regions it serves—Fintava Pay frequently customizes these banking solutions in Hausa, a regional language spoken in Northern Nigeria.

“We continue to open bank accounts using the CBN-mandated method, which is the use of BVN and NIN,” Ojerinde stated.

Fintava Pay provides three family members in separate places with OTPs for verification. This is to guarantee that the user’s account is not accessible to the agent.

The firm offers ATM cards for cash withdrawals to customers who do not have cellphones for digital banking.

“OTPs will be provided to the three numbers prior to their receiving ATM cards. Users will not receive cards if the three OTPs are unavailable at that time, Arowolo stated.

BusyPay, a super agent network in Kano, was just onboarded by the firm.

“The BusyPay founder came to us and said, ‘I could onboard thousands of people overnight if I had the technology,'” Ojerinde said.

According to Fintava Pay, the platform recorded 1,000 downloads and started onboarding clients who had not previously had access to digital banking within 24 hours of the introduction of BusyPay’s bespoke banking app.

Although low levels of digital literacy in Northern Nigeria are a contributing factor to financial inclusion, people’ religious convictions cause them to see interest-based banking negatively. Most people in the north are Muslims. Fintava Pay has been able to solve this by collaborating with super agent networks such as BusyPay.

Because they believe traditional banks are associated with interest-based transactions, some individuals are unwilling to create accounts with them, Ojerinde stated. “However, they are more inclined to interact with financial services when they recognize a familiar face—a reputable local company or agent.”

For Fintava Pay, fraud has been a big worry because of users’ poor level of digital literacy. The business runs the risk of agents exploiting client information for unauthorized transactions. Agents must adhere to stringent onboarding criteria to maintain confidence, which include needing three distinct phone numbers (including family members) for identification verification and OTP authentication.

“Human mistake is one thing we have battled against. According to Ojerinde, some people reveal their BVN, and dishonest people exploit it to obtain loans.

According to Ojerinde, the team employs ethical hackers to periodically scan its systems for vulnerabilities in order to prevent fraud.   

In addition to offering financial services to Nigerians, Fintava Pay is attracting interest from other African countries and is presently collaborating with a Zambian company to duplicate its business model.

Ojerinde pointed out, “This isn’t just a Nigeria problem.” “The same obstacles to financial inclusion exist in many African markets.”

With the goal of becoming a pan-African banking-as-a-service provider, Fintava Pay is looking at ways to raise money to support its growth. Ojerinde, who is presently bootstrapping alongside his cofounders, is wary about accepting investor funding too soon, though.

“Raising for the sake of raising is not what we want. First, we want to demonstrate our model at scale,” he stated.

A combination of transaction fees, subscription plans, and service fees are how Fintava Pay makes money. Companies can provide financial services without obtaining a banking license by paying to utilize its API infrastructure.

A monthly membership fee is assessed to partners that use Fintava Pay’s white-label banking products in order to cover platform updates and maintenance. Additionally, the business receives a cut on ATM withdrawals, bank transfers, bill payments, and wallet top-ups.

It also makes money by charging companies who integrate its services through APIs and offering debit cards connected to its banking platform. The business, which has not yet made a profit, claims to have served over 100,000 clients and handled over ₦30 billion ($38 million) in transactions, with aspirations to grow even more.

Fintava Pay distinguishes itself by emphasizing financial inclusion in underserved regions, especially Northern Nigeria and rural populations, even while firms like Bloc, Anchor, and Maplerad provide Banking-as-a-Service. Fintava Pay tailors its solutions for regional financial behaviors, in contrast to rivals that offer general banking APIs.

Fintava Pay collaborates with agent networks and microfinance banks that already enjoy the confidence of their clients rather than dealing directly with end customers. This is different from companies like Moniepoint and Opay, who handle agent-led banking directly but don’t provide businesses extensive customization to manage their own fintech solutions.

Fintava Pay claims to provide quick settlement for companies who utilize their API to collect payments. According to Arowolo, companies who accept payments using rival APIs can only retrieve their funds 24 hours later. Additionally, according to the company, costs may be adjusted depending on the volume of transactions and it charges less than its rivals.

There are no plans for the firm, which is already operating in northern Nigeria, to expand into Lagos.

Ojerinde said, “You want to concentrate on other regions of the nation where people are not paying attention.”