Nigeria’s fintech landscape has undergone a seismic shift in recent years, driven largely by persistent technological failures in the traditional banking sector. Outdated banking IT infrastructure – often based on legacy systems – has led to frequent outages, slow processing, and inadequate scalability during peak demand or crises.

These shortcomings eroded user trust, creating a fertile opening for innovative alternatives. Leading the charge are OPay and PalmPay, two mobile money operators backed by substantial Chinese investment, which have stepped in to fill the void. They now dominate Nigeria’s daily payments ecosystem, offering tens of millions of Nigerians a reliable way to send money, pay bills, and transact when banks falter.

From Banking Failures to Fintech Triumph

The COVID-19 pandemic exposed the fragility of Nigeria’s traditional banking channels. During the 2020 lockdowns, bank branches were inaccessible and ATMs frequently ran out of cash. Transaction volumes shifted online almost overnight – the number of electronic payments surged by over 50% year-on-year in early 2020 – overwhelming bank IT systems.

Customers experienced app crashes and USSD service failures as usage spiked, with some transfers taking days to complete or failing without quick reversal. In contrast, fintech upstarts OPay and PalmPay rose to the occasion with scalable, cloud-based platforms. Both offered easy mobile wallets accessible via smartphone apps or basic phones (through USSD codes like *955# for OPay), ensuring people could transact even on low-data connections or offline.

As a result, OPay’s transaction volumes exploded – its monthly payment value quadrupled from about $363 million in January 2020 to $1.4 billion by November 2020. By the end of that year OPay was processing over $2 billion in transactions monthly (a 4.5× jump) and serving around 10 million users.

PalmPay, which launched in late 2019, also saw rapid uptake by offering instant airtime top-ups and e-commerce integrations on its app. A 2021 GSMA report noted that Nigeria’s mobile money transaction count grew exponentially during this period – part of a nearly 30-fold increase in mobile money value between early 2020 and 2024– with much of the growth driven by non-bank providers like OPay and PalmPay as the banks struggled to cope.

Cashless Policy Chaos (2022–2023): Fintechs Seize the Moment

Nigeria’s push toward a cashless economy, which began in 2011, hit a critical juncture in late 2022 with the Central Bank’s naira redesign and cash withdrawal limits. The policy, aimed at reducing cash in circulation, backfired due to poor execution – new banknotes were scarce, and a cash crisis ensued. Millions of Nigerians mobbed banks to deposit old notes and withdraw what little cash was available, overwhelming banking systems.

Traditional banks’ technology buckled under the pressure: transaction failure rates spiked, mobile banking apps crashed repeatedly, and POS terminals frequently went offline. In February 2023, the value of electronic payments actually dropped to ₦37.6 trillion (from ₦39.6 trillion in January) due to the disruptions.

By March 2023, only 60% of the failed e-payment transactions had been resolved, leaving 40% of cases (many involving customers’ money stuck for weeks) unresolved. This breakdown traumatized users and dramatically amplified distrust in the banking system. OPay and PalmPay capitalized on the chaos: their agile infrastructure allowed them to scale rapidly while banks went down. For instance, OPay boasted that its cloud-based network could expand capacity faster than traditional banks, enabling near-100% uptime during the cash crunch.

Both fintech apps became the most downloaded finance apps in Nigeria by March 2023, and by October 2023 OPay was the single most downloaded app in the country across all categories. Customers flocked to their extensive agent networks to get cash or make deposits when bank ATMs were empty – OPay’s agents grew to over 500,000 by 2023, while PalmPay’s agent network exceeded 500,000 as well.

These agents (recognizable by OPay’s green and PalmPay’s blue kiosks) became lifelines in both urban and rural areas, processing cash-in/cash-out transactions reliably when bank systems failed. Thanks to this surge, mobile money operators handled ₦41.5 trillion in transactions between January and July 2024 (up from just ₦1.37 trillion in the same period of 2020). By the first half of 2025, Nigeria’s licensed mobile money providers had processed around ₦50 trillion in transactions – a meteoric rise that cemented these fintechs as leaders in daily payment services.

Ongoing Banking Glitches (2023–2025): Sustained Migration to Fintech

Even after the cash crisis abated, Nigerian banks continued to suffer high-profile tech outages. In late 2024, for example, a major bank’s core banking system migration led to multi-day network downtime, leaving customers unable to access funds and delaying salary payments by up to 72 hours.

Such incidents have not been rare – customers have recounted being unable to open banking apps or access salaries during periodic glitches in 2023 and 2024. When these failures hit, many Nigerians again turn to OPay or PalmPay as backup. Each bank outage or slow reversal (which can take over a week for failed transactions) drives more people toward the fintech platforms.

The result has been a steady migration of everyday payments away from banks. By mid-2025, OPay reported over 50 million registered users in Nigeria, with around 10 million daily active users. PalmPay isn’t far behind – it has grown to 35 million users as of 2024 and was processing about 15 million transactions per day in 2025. These volumes indicate that for peer-to-peer transfers, merchant payments, and small-value transactions, Nigerians now overwhelmingly rely on mobile money fintechs.

According to the Nigeria Inter-Bank Settlement System, mobile money operators handled ₦20.7 trillion in transactions in just Q1 2025 – 1,518% higher than in Q1 2021. While traditional bank channels still process greater value overall (for example, ₦285 trillion in Q1 2025 via bank instant transfers), the fintechs have become the go-to for daily retail payments due to their reliability. As fintech usage became habitual, OPay and PalmPay entrenched their positions with aggressive customer incentives (like prolonged free transfer fees) and new services, effectively turning the post-2020 era of banking failures into a fintech triumph.

Ownership: Chinese Capital at the Helm

A notable aspect of OPay and PalmPay’s story is the heavy involvement of Chinese capital and expertise behind the scenes. Neither startup is purely Nigerian-owned – both were incubated with Chinese backing, which provided the financial muscle and tech know-how for their rapid expansion:

OPay: The company’s origins trace back to PayCom Nigeria (founded 2010), which was acquired in 2018 by Opera – the browser company that had itself been bought by a Chinese consortium led by billionaire Zhou Yahui. Zhou’s team rebranded PayCom as OPay and injected significant funding. Today, OPay is incorporated in Hong Kong and its major investors are Chinese or Asia-focused: IDG Capital and Sequoia China were early backers, and in 2021 OPay raised a landmark $400 million Series C round led by SoftBank Vision Fund 2 (with participation from DragonBall Capital, Source Code Capital, and other Asia-based investors), valuing the company at about $2 billion.

In total OPay has raised roughly $570 million to date. While daily operations in Nigeria are run by local management (the current MD/CEO of OPay Nigeria, Dauda Gotring, is Nigerian, and succeeded a former Nigerian CEO in 2023), strategic decisions and technical architecture are heavily influenced by the Chinese parent and investors.

This influence is evident in OPay’s model, which closely mirrors Chinese “super-apps” like Alipay – focusing on high-volume, low-margin transactions and rapid user acquisition funded by venture capital. Opera/OPay’s Chinese ownership stake was about 9.4% in 2024, implying a valuation of $2.75 billion for OPay that year. The deep pockets of its investors enabled OPay’s strategy of offering free or near-free transactions for years to gain market share.

PalmPay: PalmPay is even more directly an extension of Chinese corporate expansion. It was founded in 2019 as a subsidiary of Transsion Holdings, the Shenzhen-based maker of Africa’s ubiquitous Tecno, Infinix, and itel phones. In fact, PalmPay’s initial $40 million seed round was led by Transsion, and as part of that investment PalmPay’s app came pre-installed on all new Tecno/Infinix devices, giving it instant reach to Transsion’s huge customer base.

Transsion itself became a publicly listed company in Shanghai in 2019 (raising ~$400 million) and soared to a market capitalization of around $13–15 billion by 2025, reflecting its dominance in African tech markets. PalmPay remains majority-owned by Transsion and thus effectively Chinese-controlled.

It has also attracted funding from other Chinese venture firms – for example, a $100 million Series A in 2021 (led by Transsion with participation from Chinese VC GSR Ventures) brought PalmPay’s total disclosed funding to $140 million. Industry reports suggest PalmPay likely attained “unicorn” status (a valuation of $1 billion+) by 2025 on the back of further internal investments, even if not publicly announced.

The company’s CEO and many top executives are Chinese or expatriates, though PalmPay Nigeria has a local Managing Director, Chika Nwosu, who handles daily operations. The strong support from Transsion—which controls over 50% of Nigeria’s smartphone market—gives PalmPay a strategic advantage, as it integrates into the phone hardware ecosystem and benefits from Transsion’s brand recognition. 

However, this foreign ownership has also attracted some scrutiny. Commentators have raised concerns about data security and sovereignty, noting that large amounts of Nigerian financial data are flowing through Chinese-managed platforms (a concern sometimes called “digital colonialism”). Nonetheless, there is broad agreement that without Chinese capital and tech expertise, neither OPay nor PalmPay could have expanded as rapidly as they did during the period when Nigeria’s banks were struggling.

Market Position: Surging Ahead of the Pack

As of 2025, both OPay and PalmPay have achieved unicorn status, reflecting investor confidence in their market leadership for payments in Nigeria. They have not only amassed huge user bases but also command a majority share of transaction volumes among licensed mobile money operators:

With around 50 million registered users and 10 million+ daily active users by 2024, OPay is the largest fintech platform in Nigeria by user number. It processes an astonishing volume of transactions – over $12 billion per month in payment value as of early 2024, which equates to roughly ₦9 trillion monthly. This includes transfers, bill payments, merchant payments, and airtime purchases facilitated through OPay’s app and agent network. Notably, OPay reported about 100 million daily transactions on its platform in 2024 (many of these are likely micropayments or peer-to-peer transfers).

OPay’s footprint in the offline merchant/agent space is also huge: it had over 563,000 agents as of mid-2023, giving it roughly 37% of all banking agents in Nigeria – the single largest share by any provider. Its POS terminals and kiosks are ubiquitous, and by mid-2025

OPay’s footprint in the offline merchant/agent space is also huge: it had over 563,000 agents as of mid-2023, giving it roughly 37% of all banking agents in Nigeria – the single largest share by any provider. Its POS terminals and kiosks are ubiquitous, and by mid-2025 OPay accounted for an estimated 30–40% of Nigeria’s daily POS transaction count (by some industry measures). The company’s valuation has skyrocketed in tandem with its growth. After the 2021 SoftBank-led round it was valued at $2 billion; by April 2024, Opera’s filings valued OPay at about $2.75 billion.

This is 5× higher than its implied valuation in 2018–2019, and reflects a revenue-positive operation (OPay achieved its first monthly profit in 2024) with massive scale. In terms of daily usage, OPay has about 10 million active traders/users per day on average – a figure that dwarfs the digital engagement of any single traditional bank. Its aggressive expansion isn’t limited to Nigeria either: OPay has ventured into other markets like Egypt and Pakistan, aiming to replicate its success beyond Nigeria.

Although slightly trailing OPay, PalmPay has been on a rapid growth trajectory and is a strong number two in Nigeria’s fintech arena. PalmPay reached over 35 million registered users in Nigeria by 2024 and claims more than 15 million transactions daily on its platform as of 2025. Its agent network has expanded to 500,000+ agents nationwide, comparable to OPay’s reach.

This gives PalmPay roughly one-third of the overall agency banking market – together, PalmPay and OPay control at least 60% of Nigeria’s agent banking outlets by most estimates. PalmPay’s monthly transaction value is a bit lower than OPay’s (industry insiders estimate it handles around $8 billion per month in payments as of 2024–25, given its volume of daily transactions and slightly smaller user base). Still, that is an enormous figure, making PalmPay the second-largest mobile money operator in the country by volume.

PalmPay’s latest known funding round was its $100 million raise in 2021, but since then its valuation has grown substantially. By early 2025, PalmPay was reportedly valued around $1.5 billion, having quietly attained unicorn status as Transsion and partners increased their investment (this is in line with PalmPay’s user and revenue growth; for context, PalmPay’s revenue hit about $64 million in 2023, a staggering 31,000% increase from just $0.2 million in 2020.

In rural areas and smaller cities, PalmPay has been growing especially fast, leveraging the presence of Transsion’s affordable smartphones and its strategy of recruiting agents in every local community. The company has also started offering adjacent financial services like micro-loans and high-yield savings on wallet balances to entice customers. PalmPay’s wallet savings feature, for instance, has offered interest rates up to ~18% annualized on deposits – far above the 5–10% interest typically offered by banks – as a way to attract and retain users (and indeed, OPay offers a similar product “OWealth” with up to ~15–20% annual interest).

Such features have helped PalmPay deepen engagement with users beyond just payments. Overall, with an estimated 30 million+ active users by late 2025 and a valuation in the range of $1–2 billion, PalmPay stands as a formidable competitor that in many respects has overtaken most incumbent Nigerian banks in daily customer touchpoints.

Together, OPay and PalmPay now dominate Nigeria’s fintech payments sector. They reportedly handle about 60–70% of all mobile-money transactions by value in the country and an even greater share of the pure consumer-to-consumer transfers. Their combined valuation (roughly $4 billion+) also exceeds the market capitalization of several of Nigeria’s top banks (when adjusted to current exchange rates), highlighting just how quickly these fintechs have surged ahead in the financial services landscape.

Understanding Nigeria: Cultural Psychology and Fintech Influence

OPay and PalmPay did not merely exploit technology failures – they also succeeded by deeply understanding Nigerian consumers’ psyche and cultural context, tailoring their services accordingly. This fusion of local insight with foreign tech savvy has been crucial to their dominance, and it’s reshaping the broader economy:

Both fintechs recognized that Nigeria, despite its tech-savvy youth, remains a cash-centric society where trust is often built face-to-face. They aggressively built out agent networks in every community to serve as the human touchpoint – a strategy that resonates in Nigeria’s communal culture. Today, agents of OPay and PalmPay serve as “trust bridges” in areas with low bank presence, helping users deposit or withdraw cash and teaching them to use the apps. This physical visibility gave skeptics confidence to try digital wallets.

Additionally, the companies localized their marketing: they employed Pidgin English slogans, partnered with popular Afro-pop influencers, and offered promotions tied to local festivals and traditions (for example, giving bonuses or cashbacks during Eid al-Fitr, Christmas, etc., tapping into the festive spending culture). Such moves appealed to Nigerians’ “hustle mentality” – by providing small rewards and quick loans for emergency needs,

OPay and PalmPay positioned themselves as platforms that help people earn and save money, not just spend it. Even in design, the apps mimic familiar elements from successful Asian super-apps but include Nigerian nuances (like an “ajjé” sound for transaction alerts, evoking the local onomatopoeia for money).

This ethnographic approach has paid off in spades. Financial inclusion among Nigerian adults climbed from about 56% in 2020 to 64% in 2023, a significant jump partly attributed to the reach of mobile money and USSD services. Industry experts note that many of the newly included users are those who distrust banks but will trust a neighborhood agent or a phone-based service that’s proven reliable.

By simplifying KYC requirements and allowing people to open an account with just a phone number and BVN, the fintechs onboarded millions of unbanked Nigerians. Notably, a large segment of women and young people – groups traditionally underserved by banks – have embraced these platforms, seeing them as more accessible and fair. (In fact, women make up an estimated 40% of OPay/Palmpay users, higher than the female share in traditional bank customer bases, indicating a narrowing of the gender gap in access to finance.)

Broader Economic and Policy Influence:

The rise of OPay and PalmPay is reshaping Nigeria’s economy and even influencing policy. By bringing more people into the formal financial system, these fintechs are helping drive economic activity. A recent analysis by Enhancing Financial Innovation & Access suggested that mobile money and agent banking have contributed to GDP growth by enabling more consumer spending and business transactions in the digital economy.

 From January 2020 to end of 2024, the annual value of mobile money transactions in Nigeria jumped from negligible levels to ₦71.5 trillion – that’s money circulating more efficiently than it would in cash, supporting commerce across the country. Recognizing this impact, the Central Bank of Nigeria has adjusted regulations: in 2021–2022 it began granting more fintech licenses (Payment Service Bank and super-agent licenses) and in 2023 it raised transaction limits for mobile wallets, essentially legitimizing fintechs as vital financial players.

The competition from fintechs has also forced banks to step up. Banks like GTCO and Access have invested in cloud-based cores and launched fintech-like digital services to win back customers

By 2024, the CBN even briefly halted new customer onboarding for some MMOs to conduct audits on anti-fraud compliance, showing that these fintechs had grown important enough to warrant closer oversight. The competition from fintechs has also forced banks to step up. Banks like GTCO and Access have invested in cloud-based cores and launched fintech-like digital services to win back customers – for example, GTBank’s 2024 system upgrade to Finacle was partly driven by the need to enable faster, more flexible digital services.

On the social front, OPay and PalmPay have empowered countless small entrepreneurs. Agents earning commissions, POS merchants expanding their sales with fintech terminals, ride-hailing and delivery workers (in OPay’s ecosystem) gaining income – these are new livelihood avenues created by the fintech boom. The platforms have also emphasized microloans and savings products that help users manage through high inflation (which hit 20–30% in recent years).

For instance, OPay’s lending feature and PalmPay’s buy-now-pay-later offerings provide quick credit for urgent needs, something many banks do not offer without collateral. However, the fintech revolution is not without its critics. Security challenges have arisen – fraudsters at times target unsuspecting users of these platforms, and the companies have had to bolster security and comply with stricter KYC/AML rules (indeed, in 2024 regulators fined several fintechs including OPay ₦1 billion for compliance gaps, prompting improved security measures).

However, the fintech revolution is not without its critics. Security challenges have arisen – fraudsters at times target unsuspecting users of these platforms, and the companies have had to bolster security and comply with stricter KYC/AML rules

Moreover, strategic thinkers have mused about data sovereignty issues, given that foreign-owned fintechs now handle so much Nigerian data. Despite these concerns, the consensus is that OPay and PalmPay’s presence has been a net positive. They have demonstrated that with the right model, it’s possible to rapidly increase financial inclusion and modernize payments in Nigeria.

Their success is inspiring similar moves across Africa – Transsion is exporting PalmPay to Ghana, Tanzania, and even Asian markets like Bangladesh, while OPay has expanded to Egypt and other countries, showcasing an “Africa to the world” fintech story powered by cross-border investment. Nigerian policymakers, seeing the youth embrace these platforms, are now more inclined to support fintech innovation as a cornerstone of Nigeria’s goal to become a fully cashless, digital economy.

In essence, the failures of Nigeria’s legacy banking technology – from the pandemic lockdown hardships to the cash scarcity fiasco – handed OPay and PalmPay an unprecedented opportunity to win the hearts (and wallets) of Nigerians. They rose to the challenge with superior tech reliability, aggressive incentives, and a keen attunement to local needs. Backed by deep-pocketed Chinese investors and armed with lessons from China’s fintech boom, these companies have achieved in a few years what traditional banks struggled with for decades: making daily payments seamless for tens of millions of people

As of 2025, OPay and PalmPay are not just fintech successes – they are central pillars of Nigeria’s financial system. Their dominance in daily transactions has set a new benchmark for service uptime, speed, and user-centric innovation. For the banks, the message is clear: adapt and innovate quickly, or risk fading into irrelevance for the next generation of customers. The fintech challengers have seized the leadership in payments, and they aren’t looking back.

Idriss Linge