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Impact Stories

July 25, 2023

11 mins read

Redefining Payments and Banking in Nigeria; the Moniepoint story.

by Tosin Eniolorunda

This is a love story. Well, something like that. And like most of the best love stories, it starts with a gift. On Valentine’s Day, February 14th 2022, Moniepoint got its business banking licence. This pivotal moment and all that came after it is sometimes viewed in isolation, but it’s hard to understand the present without a bit of a journey to the past.

It began with a promise.

Starting off as a bootstrapped company wasn’t a bed of roses, but by 2018 we had seen some success. As an enterprise solutions provider for banks, TeamApt, as we were called then, created multiple solutions that were being used by most of the traditional financial institutions in Nigeria.

But we were looking to do more. Experience in the banking sector had provided us with unique insights, and a perspective that most others just did not have. The combination of this spurred our next challenge, setting us on the path to building what Moniepoint is today.

Getting there required a few steps, the first of which was building an Agency banking solution.

The birth of the Moniepoint terminal

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Tobi Amira, Loans VP at Moniepoint, often tells the story of his first month on the job. I interrupted him mid-lunch, sharing an idea I had to build an agency banking application. This wasn’t exactly our first encounter with Agency banking. As a service provider to financial institutions, we had built Point of Sale (POS) terminal applications for some of the country's biggest Payment Terminal Service Providers (PTSPs).

This was different. Driven by the goal of spreading financial happiness, I couldn’t ignore how much financial inclusion in Nigeria needed to improve. Most of the “big guys” supported the people with little risk, but this meant that so many others were left underserved.

Agency banking could help bring these people on board by taking the digital financial services they needed closer to them, but there were a few problems with the existing systems that our team needed to fix.

Most notable were the problems with reconciliation, stability, and a lack of transparency. As a result of these problems, agency banking wasn’t appealing to agents because they were often at the receiving end of customer complaints and dissatisfaction. This, in turn, meant that agency banking was generally not growing at the scale necessary to significantly improve the financial experience for the people who needed it.

Right off the bat, we decided that we wouldn’t just build, but we would do so differently. Armed with industry experience and market research, we built a product that would solve these problems, effectively changing the trajectory of agency banking.

Among other things, we added another leg to the transaction process flow that allowed agents to get real-time reports of their transactions. We also built a hyperlocal distribution network, powered by a system that ensured agents could see and track how much they earned. This combination made even the earliest version of Moniepoint something that people were excitedly waiting for.

Around this time, something else was happening too.

Innovation on two fronts; inventing virtual accounts.

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In 2018, transfers were a lot different than they are now. All payments via transfers required manual confirmation. If you paid a company, someone had to check to see if the funds had entered the company’s bank account and confirm that the sender's name matched the customer's. Manually. 

This tediousness meant that while transfers were a preferred payment option for customers due to their instant nature and speed, the time it took to confirm these transactions worsened the experience for both the businesses and the customers.

To solve this, we got to work on a product that was not previously available in the market - virtual accounts.

These accounts could be assigned to customers, and transaction confirmation was digital. This meant that if customers did decide to pay via transfer, confirming their transactions would be fast and seamless, and there was no more manual bottleneck.

Thus, Monnify was born.

The Monnify product quickly gained traction with early adopters like Piggyvest, Cowrywise and Fairmoney using them to drastically improve payments processes for their users. Continuing on this path, Monnify would go ahead to completely change the pay-via-transfer experiences for thousands of companies across Nigeria.

The journey to powering dreams for Nigeria’s businesses

By 2019, TeamApt had pretty much completed its transition towards creating consumer-facing products, and I had refocused most of the team’s efforts on these two products. Both Moniepoint and Monnify began to see rapid growth and adoption.

Barely 2 years after its launch, Moniepoint became Nigeria's leading agency banking solution, processing up to $7 billion in over 120,000,000 transactions monthly. Its partner product, Monnify, hit a milestone of over $22 million daily in 500,000 transactions.

At this point, agency banking played the role of a middleman between businesses and their customers. People withdrew cash from agents to pay to businesses that weren’t digitally enabled. These businesses then also gave their cash to agents to credit them digitally, so they didn’t have to take the cash from the day’s business home.

With this level of adoption of Moniepoint by agents, it became clear that there was more that we could do, and their data told the same story. Each month, 16 million unique cards were used on the Moniepoint terminals, representing over 25% of banked Nigerians. 

Agents had always been a layer towards digitisation, and it played the role of a middleman between businesses and their customers. People withdrew cash from agents to pay businesses that weren’t digitally enabled. Also, these businesses gave their cash to agents to credit them digitally, so they didn’t have to take the cash from the day’s business home.

It was clear that cash wouldn’t be the prevalent means forever, so we decided to also bank these businesses and enable them to receive payments directly. 

But while designing this solution, we soon realised that the agents they currently served technically qualified as businesses, except, they sold cash for a commission.

We already gave these agents a wallet, insurance for their terminals, and a debit card to spend directly from their wallet. Furthermore, an experience with the agents opened the doors to exploring a credit solution.

As Moniepoint was being adopted, we had been approached by some of their agents who kept getting loan requests. Based on this, we decided to give out a few loans, and it went great. The loans were repaid, and the team began exploring credit solutions too.

With that last offering, Moniepoint was already providing a suite of tools for their agents.

All of this was covered under the payment and switching license we had, as well as partnerships with other organisations. But to extend these services to businesses, we had to get a banking license, so we applied for one.

While waiting for it to come through, We all got busy building out the first iteration of the Moniepoint platform for businesses - offering bank accounts, loans, and of course, payment tools like the POS terminals we had become so known for.

When the news came, on February 14th, 2022, that Moniepoint had received its banking license, we were excited but, most of all, prepared. In about two months, on Apr 13, 2022, Moniepoint MFB was live.

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POS Transfer

TeamApt had always built products that met customers' specific needs, and we maintained this customer-centric approach with our business bank. We listened to the problems businesses had, and created solutions for them.

One of the key outcomes of this was the creation of the POS transfer feature.

Accepting transfers is a pretty common mode of payment acceptance for most businesses. People found them safe and easy, and would often opt for transfers as a means of payment. The downside for businesses, however, was that they couldn’t control the transfers made to their businesses, or track whether they were successful or not.

To improve the experience for businesses, we developed a feature on the Moniepoint terminals called “POS transfers”. It went through several iterations, and the final version was something that enabled businesses to see the transfers on their terminals, and confirm the details of the person sending it, before the money entered their accounts.

This was an important step, as it brought the Moneipoint terminals closer to being an all-in-one payment solution for businesses, accepting whatever means of payment their customers preferred.

Innovation like this, coupled with a transition of the same distribution network that had worked so efficiently for onboarding businesses, saw us hit a milestone of  $10 billion in monthly successful transactions, just seven months after officially launching as a business bank.

Goodbye TeamApt, Hello Moniepoint.

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Despite these milestones, we had a bit of a problem. We had struggled with our brand for a bit. Having built a name while creating solutions for banks, and then gone ahead to build successful products like Moniepoint and Monnify, which served businesses, people often couldn’t reconcile us with these products. The name “TeamApt” was disconnected from these products, and describing ourselves was a big challenge. 

When she first joined the company, TeamApt’s Global Marketing Lead presented her ideas to the executive team and advised that we take on the name of our flagship product, Moniepoint. At the time, Moniepoint was just gaining traction, and the idea seemed rather brazy.

But with all the growth the team had seen since its transition to creating consumer-facing products, it was finally the perfect time.

Until this point, Moniepoint was still just considered a product of TeamApt. And because of how ubiquitous Moniepoint was,  TeamApt was almost invisible. Moniepoint was the product that people knew and loved, and it made sense for the company to become known by the name of this product we were heavily associated with.

So, by January 2023, TeamApt Inc. changed its name and officially became Moniepoint Inc.

However, this was only one way the team had changed. We had gone a long way from being a guerrilla team of ex-Interswitch engineers. We had now become a global entity with over a thousand team members spanning more than 7 countries. From being completely bootstrapped, to being powered by some of the world’s leading VC firms, including QED, for whom Moniepoint was a pilot investment in Africa.

Moniepoint set its foot forward boldly, and we were here to stay.

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The cash crunch

On the cusp of this phase of immense growth for the team, external policy changes were being made in Nigeria that would change the experience for everyday users and test the decisions that we, now called Moniepoint, had made.

In March 2023, as part of its effort to aid in adopting cashless means of payments, combat inflation and prevent fraud, the central bank of Nigeria started a Naira redesign. The consequence was a reduced availability of cash and, by extension, increased reliance on digital payments.

With this policy change, we saw an increase in the adoption of Moniepoint by businesses. Our positioning as a business bank helped make it easier for these businesses to see the Moniepoint terminals as the solution that they could depend on, making it easier for them to make the switch.

Having a solution like this was important, especially for SMBs. Being able to begin accepting payments digitally with ease, helped most of these small businesses thrive during the cash crunch. Without cash, the role of the agency banking cash-in/cash-out service was a lot less impactful, and businesses that could accept payments directly led the charge.

In this period, our team saw record transaction volumes daily, and we increased our focus on site reliability in order to handle the surge. We had to ensure that the reliability we had become so known for didn’t change.

This experience further validated our decision to focus on serving businesses, and the devotion we’ve had to helping them grow since.

Africa’s second-fastest-growing company

Today, on the streets of many states in Nigeria, Moniepoint has become a synonym for “POS terminal”. It currently serves over 1.3 million businesses, with a monthly TPV of roughly $ 12 billion in 400 million transactions. It is present in every local government in the country, rightly earning it the financial inclusion award from the Central Bank of Nigeria in 2022. 

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By May 2023, Moniepoint also got listed by the Financial Times as the second-fastest-growing company in Africa. A peek behind the curtains would show that our “magic” comprised of a ruthless devotion to innovation, and the grit to solve the unfancy problems that were often ignored.

Driven by the mission to create financial happiness, we created a solution to meet the needs of everyday businesses that were historically overlooked and, using these businesses as touchpoints, changed the trajectory of finance in Africa’s biggest economy, Nigeria.

But all the best stories are the ones that are still being written. There’s much that’s still to come for us as a team, and many more people beyond Nigeria’s borders, who need the kind of products we’ve spent years building and refining. If our journey so far is anything to go by, then I’m confident that we’ll accomplish so much more.

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