During a Zoom call from Lagos, the CEO acknowledged that he was perhaps ahead of the curve, noting that when he started the company, it was with a team of eight people, and “for everybody in that room, a cashless society was a scary thought.” However, he says, they all geared towards achieving the vision, having “left their jobs to follow me on that journey.”
The company began commercial operations in 2012 and reached the N2tn ($4.8bn) level in March 2020 (after eight years). By May 2021, the fintech firm had reached the N1tn level – in just 15 months.
Oviosu’s aim was to “build the Paypal for Africa”, and he sought to find out how the continent could “digitise cash and really end the use of [physical] cash across our economy, as well as increase access to financial services.”
Ahead of the curve
“Paga is a Spanish word meaning to pay. I did not originally intend for it to be the name of the company, but I wanted something short and catchy, and Paga was already the name of one of my projects. Then my friend said – you have it: Just Paga me, Just Paga it – it works!”
Oviosu is well aware that front-running technology is not always the way to go. “If you check for Paga on YouTube, the oldest video of us shows someone paying with ‘tap to pay’ on the phone. This was in 2010 – we had ApplePay capability, but the market was not ready for that. It was not appropriate at that time, we would have wasted money and energy. However, the market is more ready today.”
Paga in Nigeria
Oviosu says in Nigeria – where Paga was started and still remains the main base of operations – “[physical] cash is very much still a thing” probably due to the fact that “banking services are still very challenging, even for those who are banked, talkless [let alone] of those who are not.”
“Paga has over 17 million unique users, and in the last four years has processed $8bn worth of transactions.” This shows that the company is “growing at a really fast pace as we continue to deepen our business within Nigeria.”
We are going to be getting crypto into Paga, but not in Nigeria, due to the CBN’s request that financial institutions not deal in crypto.
Oviosu has not forgotten that a majority of the population may not be tech savvy, so “for the mass market, you can go to agents if you don’t want or know how to use the technology. You still deal in [physical] cash, but the agent can do the digital.”
“One of my main focuses when starting the company was, how do I get the market woman in Ajegunle [a place in Lagos] to use this,” he says.
Many Nigerians do not trust banks, and might not use smartphones so the ‘aha moment’ for Oviosu “was [to] build a retail network of shops where they can go: she [the market woman] might use [physical] cash but we will train an agent to use digital. So that’s how the agent network became a means to an end for them. This ecosystem can solve many problems in Africa. Our ambition is that one billion people should use this platform to access and use money. We want to particularly focus on the emerging middle class – helping them to pay, and helping them to get paid.”
In the coming weeks, Paga is going to launch a new platform specifically for small to medium-sized business (SMBs). SMBs in Nigeria struggle to sell efficiently as they lack systems for tracking inventory and therefore primarily trade in cash. They struggle to manage internal operations (such as paying salaries and vendors) and this is a problem that Paga, in partnership with Visa, is aiming to resolve.
Paga will allow customers to choose their method of payment (bank transfer, cards, etc), and receive immediate confirmation of payment alongside the businesses. This will help in building trust between the customer and the business.
In short, Paga is “trying to build an ecosystem for the consumer to conveniently make payments: for the SMBs to manage their businesses and do payrolls.”
Paga is reported to be seeking entry into Ethiopia and Mexico. However, Oviosu clarifies that “in Mexico, we are pausing to think whether or not to move forward.”
However, he tells The Africa Report that: “We want to solve the problems in big places – Africa and Latin America. We will go to neighbouring countries [to Nigeria] in Africa, but our next country is Ethiopia. We are waiting for regulatory approvals currently, and are now working to prioritise the other African countries we aim for. But the way we go to various countries will differ.”
He says: “There are local nuances you need to be aware of, which is why we also need local teams. As a company, we already have people all around the world – there are 50 people in Ethiopia already. We have a team in Nigeria, in the UK, one person in Mexico. We are used to working across time zones and geographies, but it is important to have a culture of the company: maintain one Paga wherever you are.”
Different countries use different official languages, but luckily, Oviosu says: “the platform was built to be multilingual, so switching from one language to another is easy. In implementation, we must make sure the proper translations are in place, but it should not be difficult.”
In terms of funding their expansion plans, Oviosu says they are trying to raise additional capital in the coming quarters. “We haven’t started, but we will be doing it soon. We are currently backed by a number of private equity firms though.”
The effect of Covid-19
Covid-19 affected everyone, and all businesses, but for Paga, Oviosu says “the digital side of the business saw significant acceleration – over two million people registered. During the peak in Nigeria, we saw a 700% quarter on quarter growth – people were looking for alternative ways to pay for things.”
“However, the agent business was negatively affected as it had to shut down, but we saw the resilience of it. 80% of them managed to stay active, despite markets not being open every day – the agent business only went down by about 11%,” he says.
“On the pure plate digital side, there was massive acceleration, whilst on the side with some physical element, there was a small decline. But in the midst of everything – 11% decrease is not bad,” he says.
In the fintech world, one cannot ignore cryptocurrencies.
“We are going to be getting crypto into Paga, but not in Nigeria, due to the CBN’s request that financial institutions not deal in crypto. But we won’t be doing crypto exchange – we are not trying to compete with Binance, etc, but consumers and businesses should be able to transact crypto and hold crypto,” Oviosu told The Africa Report.
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