Onafriq, the pan-African digital payments network operating across 40 African countries, is winding down Baxi, its Nigerian agent banking business, after five years of operations.

The company said the decision followed a review of its long-term strategy and the sustainability of the business. It cited inflation, naira depreciation, rising operating costs, lower transaction volumes, pressure on margins and the growing popularity of instant account-to-account transfers as factors that made its offline agent banking operations increasingly difficult to sustain.

The closure marks the end of one of Onafriq’s major efforts to build a physical payments network in Nigeria, where agents have traditionally helped customers access financial services without visiting a conventional bank branch.

However, Onafriq stressed that the decision applies only to Baxi’s agent banking business and does not mean the company is leaving Nigeria.

Why Onafriq Is Closing Baxi

In a statement issued on Friday, Onafriq said economic pressures and changes in payment behaviour had affected the long-term viability of Baxi’s operations.

Agent banking businesses rely on networks of physical locations and agents to provide services such as cash deposits, withdrawals, transfers and bill payments. Maintaining these networks requires operating expenditure, liquidity management and sufficient transaction activity to generate sustainable revenue.

For Baxi, inflation and the depreciation of the naira increased the pressure on operating costs, while lower trading volumes and shrinking margins weakened the business case for maintaining its network.

Dare Okoudjou, Onafriq’s founder and chief executive officer, described the decision as difficult, acknowledging the efforts of employees, agents and business partners who helped build Baxi.

“We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for,” Okoudjou said.

The company did not disclose how many employees would be affected by the closure.

What Happens to Baxi Agents and Customers?

Onafriq said Baxi agents have been transitioned to another principal bank and instructed to move their funds to their preferred principal bank within 30 days.

The transition is an important part of the wind-down because agents depend on their banking relationships to support transactions and manage funds used in their businesses.

Onafriq also said it would consult affected employees, support them through the transition and honour its commitments to agents and other stakeholders.

However, the company has not publicly disclosed the number of employees affected or provided further details in the supplied announcement about the receiving bank, the precise transition arrangements or the final date for all Baxi services to end.

Agents and customers should therefore rely on official communications from Onafriq and their relevant banking partners for instructions about outstanding transactions, account arrangements and service changes.

How Baxi Became Part of Onafriq

Onafriq entered Nigeria’s agent banking market through the acquisition of Capricorn Digital, announced in October 2021. Capricorn operated Baxi, a network that provided payment and financial services through physical agents.

At the time of the acquisition announcement, Baxi had more than 90,000 agents and had processed over $1.6 billion in transactions during 2021.

The strategy was to connect Nigeria’s offline payments market to the wider cross-border payments infrastructure operated by MFS Africa, which later became Onafriq.

Through its agents, Baxi offered services including cash-in and cash-out transactions, money transfers, bill payments and account-opening support.

The network targeted customers and businesses that continued to depend on cash or needed convenient access to financial services outside traditional bank branches.

Its closure therefore represents more than the withdrawal of a fintech product: it is a retreat from a physical distribution model that had helped extend digital financial services to customers across Nigeria.

Instant Transfers Change Nigeria’s Payments Market

One of the factors Onafriq identified was the growth of instant account-to-account payments.

Data from the Central Bank of Nigeria cited in the source material shows that internet transfers recorded approximately 11.6 billion transactions in the first half of 2024, compared with about 6.3 billion point-of-sale transactions over the same period.

The figures illustrate the growing importance of digital transfers in Nigeria’s payments ecosystem. As more consumers and businesses become comfortable sending money directly between accounts, some transactions that previously required a physical agent may be completed digitally.

That shift can create challenges for businesses whose economics depend on high volumes of cash-related transactions at agent locations.

Competition has also intensified. Operators including Moniepoint, OPay and PalmPay have established substantial presences in Nigeria’s agent banking and point-of-sale market, putting pressure on businesses to compete on transaction volumes, pricing, agent support and service reliability.

The growth of digital payments does not mean physical agents are no longer needed. Cash access remains important for many Nigerians, and agents continue to serve customers who face barriers to using digital banking independently. However, the changing mix of transactions can make it harder for some networks to sustain their operating costs.

Economic Pressures Add to the Challenge

Nigeria’s economic conditions have also contributed to a difficult operating environment for businesses with large physical networks.

The naira depreciated sharply in 2024, while inflation increased the cost of goods and services. The source material cites a roughly 129% depreciation in the naira’s value during 2024 and an inflation rate of 34.8% in December that year.

Such pressures can affect the cost of maintaining technology, staffing, transportation and other business operations. They can also reduce consumers’ purchasing power and alter transaction patterns.

For agent banking operators, the challenge is to generate enough revenue from each transaction and maintain sufficient activity across their networks to cover these expenses.

Onafriq’s decision suggests that Baxi’s existing operating model no longer met the company’s requirements for long-term sustainability.

Onafriq Will Continue Its Other Nigerian Operations

Despite the Baxi shutdown, Onafriq says it will remain active in Nigeria through its payments network and card-issuing services.

The company said its decision was limited to the Nigerian agent banking business and did not represent an exit from the market. It also pointed to continued growth in its cross-border payments network and card-issuing operations.

This distinction matters because the company operates beyond consumer-facing agent banking. Its wider business connects financial institutions, payment providers and businesses across African markets, allowing it to continue serving the region without maintaining Baxi’s physical agent network in Nigeria.

The wind-down is therefore a strategic adjustment rather than a complete withdrawal from the country.

Baxi’s Closure Reflects Wider Fintech Challenges

Onafriq’s decision comes amid broader pressure on parts of Nigeria’s fintech sector, where companies face the combined challenges of funding constraints, operating costs and competition.

Other fintech businesses have also announced closures or wind-downs in 2026. Chimoney reportedly ceased operations in May after struggling to secure sufficient capital, while Gigbanc announced plans to wind down in July amid a difficult fundraising environment.

Although each business has its own circumstances, these developments highlight a wider reality: growth alone does not guarantee sustainability. Fintech companies must build business models that can withstand economic volatility, generate sufficient margins and adapt as customers change how they pay.

For Baxi, the combination of economic pressures and a shift towards instant transfers appears to have undermined the viability of its agent banking model.

What Baxi’s Exit Means for Nigeria’s Fintech Industry

The shutdown raises questions about the future of physical agent networks as digital transfers continue to expand.

For agents, the immediate priority is understanding the transition to another principal bank, moving funds within the stated 30-day period and confirming which services will remain available during the wind-down.

For customers, the main concern will be maintaining reliable access to cash, transfers and other services previously provided through Baxi agents.

For fintech companies, the development underscores the importance of balancing expansion with profitability. Large networks can provide significant reach, but they also bring costs that become more difficult to manage when transaction volumes or margins weaken.

Onafriq’s broader Nigerian operations will continue, but Baxi’s closure marks a significant change in how the company serves the country’s offline payments market.