Tayo Oviosu Presents Paga: An Innovative Payments and Financial Services Ecosystem for Africa

Interview with Tayo Oviosu, Founder and CEO of Paga

What is your assessment of the financial services sector that you operate in?

When you look at Africa, it is more than a decade behind the US when it comes to financial services. As an example, 100% of the population of Nigeria is arguably under-banked and this is the case across the entire continent. Payments and financial services are broken, so there are a lot of issues to solve across the market and companies trying to solve them are taking different approaches. There is no way that a continent, or a country, can reach its potential if you do not solve payments and access to finance for the mass market. Soon, Africa will be the second largest continent in terms of population, so there will be a massive opportunity to go after people. Nigeria has the youngest population in the world with an average age of 17. Those are positive things for Africa and for the sector that we are in, whether it is infrastructure needed for payment facilitation, banking and providing financial services to the mass market, or for embedded finance. There is a huge opportunity. This is what is really exciting about fintech right now.

How do you distinguish your business from others in the sector and what are your competitive advantages?

At Paga, we are building a payments and financial services ecosystem that is very similar to PayPal or Square. Essentially what we are doing is solving payments and financial services for consumers on one side with the Paga brand, and for sellers on the other side with our Doroki brand. What we believe fundamentally is that in today’s Africa to scale, you need a hybrid digital and physical approach. Cash is not going anywhere anytime soon and for payments, onramps and offramps to cash are still needed and banks’ market penetration is really low. In Nigeria for example, it is somewhere between 12% and 20%.

What we have done is build a hybrid payments infrastructure for the online and the offline customer. This is a big differentiation point for the Paga Group. We are taking an ecosystem approach to how we are addressing the needs of consumers. We have built out the ramps to cash. We call that an agent at work. These are the mom-and-pop shops, pharmacies, grocery stores. The person in the neighborhood community who you go to buy bread, milk and sugar. That person can offer financial services to people in their community and it is a bridge for the offline to online. We are seeing this approach work very well. We now have over 19 million users on our platform and 15.4 million of them go to our agents on a regular basis and we are seeing the transaction process on Paga growing tremendously. It took us from 2012 to 2020 to process our first 2 trillion naira, but it is going to take us only 24 months to the next 2 trillion. The speed of acceleration on our platform is very impressive.

Can you outline the partnerships you have and others you are looking for?

Paga is a payments company. We are building an ecosystem to enable the emerging middle-class to pay and get paid, shop, and sell.

We believe very strongly in the African adage ‘If you want to go fast, go alone. If you want to go far, go together.’ We want to go far, and we go together with a lot of partners. Whether it is Visa, who we have jointly launched a number of offerings to the market, and also with LISNR, who have brought technology to enable ultrasonic sound to authenticate transactions. That is awesome because now with COVID-19, I do not need to be right in front of the merchant to actually pay for the coffee that I am buying at the store. They can just punch in my bill, and I get a notification to pay for the coffee and I press pay. Across our business we have several partners. We have opened our platform to the entire technology ecosystem and arguably this is like our AWS (Amazon Web Services). How AWS is to Amazon is what our platform as a service is to Paga. We now have over 140 technology companies that are leveraging our payments infrastructure. We are also partnering with all the utilities in Nigeria to collect payments for them.

What is your planned international reach?

Our ambition as a company is to make it simple for a billion people to access and use money. To achieve that, we are going across Africa. We had thought about going beyond Africa but for now we are staying on the continent. We just got our license in Ethiopia so we will be launching there next, and we are actively working through which are the next two countries to launch in the coming years.

What are your success stories?

Paga has been very successful to date, and we are very excited about that. For us, it is about the lives we are impacting. We launched our consumer directories nest in December of 2019, and we have over 3.6 million wallets on Paga, and we are exponentially growing faster on our transactions process. The consumer directories nest is growing at 120% year over year on processed transactions. The platform as a service is growing at 160% year over year. We are seeing a pickup of acceleration in what we are doing, it is really like a hockey stick. We are making it simpler for people to pay and get paid and to shop in Nigeria. Our revenues are growing at over 100% year over year. These are the kinds of things that we see as external markers, but internally, it is really about just solving the problems.

Do you think there is space for a lot of companies and what is your vision in the next few years?

It is already a competitive landscape and companies are taking different approaches. As an example, Flutterwave is a B2B payments business that is very similar to Adyen in Europe. Paystack is very similar to Stripe and was acquired by Stripe. On the surface it is all fintech, but it is all very different in how they are going about it. It is a big market, so there is room across the board. In the same way we have seen it play out in the west, we will see it play out across the African continent.

What is your main focus at the moment?

The big thing that we are working on is to get out the debit card tied to the Paga account in partnership with Visa. We will launch that in early 2022. What it will do is open up the possibilities for Paga’s customers. A Paga customer in Nigeria will be able to take their card and shop online. They can go into a store with it and pay with the card. We also recently got our bank license in Nigeria, which is going to give us the capability to do lending, savings and really change the picture across what we are doing. We are working on operationalizing that.

Do you think the Nigerian market is saturated with banks, or is there room for more?

All of us in Nigeria are under-banked for various reasons and there is still a lot of innovation that could be done.

Have you had any kind of awards recognition?

Very recently the Africa Report recognized me as one of the top 40 digital leaders in Africa. I also won the Entrepreneur of the Year Award (West Africa) in 2014. It is all a team effort though as the 200 people at Paga commit themselves every day to that purpose.

What do you want to achieve in the short to medium term?

In the next three years our goal is to scale within Nigeria and to expand to a couple of other markets. The opportunity in Nigeria is huge and we are doubling down our efforts. It is about reaching not just the consumer side, but the seller side and to bring merchants from the offline world into online.

What drives you to do what you do?

My biggest driver personally is a desire to change my community and to have an impact in my world, however that is defined. I really do not care if people know it was me who made an impact as it is more that I know I made the impact. And that I know the opportunities that I was given and the sacrifices that my single mother made for my brothers and I were not in vain. I want to give back to the world.

ABOUT PAGA: Paga was founded in early 2009 with a purpose to make it simple for one billion people to access and use money. Paga is solving two key problems that exist around the world – eliminating the use of cash for transactions and access to financial services. Paga is a payments and financial services ecosystem for Africa. Its ecosystem is similar to that of Square and PayPal as Paga focuses on helping both consumers and sellers pay, get paid, and access financial services. Paga enables consumers to access and use money in the most convenient way for them, whether that is through a neighborhood store (agents) or via their mobile phone (smartphone or feature phone). Paga also enables sellers to sell more efficiently and access financing.

For more information, please visit: www.mypaga.com.

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