Five years after betting big on Nigeria's offline payments economy, Onafriq is pulling the plug on Baxi, its Nigerian agent banking business. The pan-African digital payments network, which operates across 40 African countries, announced the shutdown on Friday, pointing to a brutal mix of economic headwinds and rapidly shifting consumer behaviour.
The company cited inflation, naira depreciation, rising operating costs, lower trading volumes, margin pressure, and the explosive growth of instant account-to-account payments as the forces that made Baxi's business model unsustainable.
A Difficult Exit After Five Years
Dare Okoudjou, Onafriq's founder and chief executive officer, did not soften the blow in his statement.
"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."
Onafriq confirmed the closure will affect employees whose roles are directly tied to Baxi, though the company declined to disclose the exact number of people impacted. Baxi agents have been transitioned to another principal bank and given 30 days to move their funds to their preferred principal bank.
Onafriq is not leaving Nigeria entirely. The company says it will continue operating in the country as a Payment Solution Service Provider, focusing on its payments network and card issuing services.
How Baxi Came to Be
Onafriq — then operating as MFS Africa — entered Nigeria's agent banking market by acquiring Capricorn Digital in a deal announced in October 2021. At the time, Baxi boasted more than 90,000 agents and had processed over $1.6 billion in transactions that same year. It was a commanding footprint in a country where banks and cash still dominated the financial system.
The original vision was ambitious: use Baxi's vast physical distribution network to bridge Nigeria's offline payments ecosystem with MFS Africa's cross-border payments infrastructure. Baxi's agents offered cash-in and cash-out services, account opening, money transfers, and bill payments — essentially acting as mobile bank branches in communities underserved by traditional finance.
What Went Wrong
Nigeria's macroeconomic deterioration hit agent banking particularly hard. In 2024, the naira lost roughly 129% of its value, falling to ₦1,479 per dollar. Nigeria's inflation rate hit 34.8% in December 2024, according to the Central Bank of Nigeria. For a business that runs a large physical network — with real estate, devices, and human agents to maintain — those numbers translate directly into unsustainable operating costs.
That shift in payment behaviour is arguably the most telling signal. As instant account-to-account transfers became mainstream, the core value proposition of physical agent networks weakened. Nigerians did not need to walk to an agent to move money anymore.
The competitive dynamics in Nigeria's fintech space added another layer of pressure. Companies like Moniepoint, OPay, and PalmPay aggressively dominated the PoS agent-banking market, squeezing margins and market share for everyone else. For Baxi, fighting on both the economic and competitive fronts simultaneously proved too much.
A Broader Warning for Agent Banking
Baxi's closure is not just a story about one company's struggles. It raises real questions about the long-term viability of agent banking models in markets where digital infrastructure is expanding fast. The entire premise of agent banking — that physical proximity to cash-based services is a competitive advantage — is being eroded in real time as smartphone penetration grows and digital payment rails mature.
Onafriq's retreat from offline payments in Nigeria, even as it maintains a presence through card and payment network services, signals a pivot toward the infrastructure layer rather than the last-mile distribution play. Whether other agent banking operators across the continent are watching closely is no longer a question worth asking — they almost certainly are.