CashAfrica, a Nigerian fintech startup, is on a mission to change how people pay by promoting contactless payments. Although digital payments have grown rapidly in Nigeria over the last decade, contactless methods like tap-to-pay have not yet gained widespread popularity. CashAfrica sees an opportunity to change this.
Launched in 2023, CashAfrica provides an API that enables banks and fintech companies to offer a tap-to-pay option within their banking apps. This means that customers can simply tap their phones on a payment terminal to complete a transaction. The startup also offers a mobile app called Cash Mobile, which allows users to make quick transactions by entering a password and tapping their phone. This process takes less than two seconds.
Despite the convenience, some users may be concerned about security since contactless payments usually don’t require authorization. To address this, Cash Mobile often asks users to enter a password before completing a transaction.
Asamu, a representative from CashAfrica, compares their tap-to-pay system to the NIBSS real-time payment system that became standard 14 years ago. Every bank now uses NIBSS, and CashAfrica hopes their product will become just as essential. Since its launch, the fintech has processed transactions worth ₦1 billion from its B2C customers and has gained over 1,000 users. They charge a fee between 0.3% and 1.5% per transaction, depending on its size and volume.
CashAfrica faces competition from YC-backed Touch and Pay and other Nigerian banks that are exploring their own contactless payment solutions. However, Asamu believes that CashAfrica’s proprietary payment infrastructure provides an edge by offering better margins to partner banks and fintechs. They are in the process of integrating their solution with Sterling Bank and are also in talks with Wema Bank, Fidelity, and Opay.
The startup’s biggest challenge is changing customer behavior to adopt contactless payments as their preferred method. Although some people already use NFC-enabled cards for commuting, Asamu acknowledges the need to educate people about the benefits of contactless payments. They rely heavily on organic reach and word-of-mouth to spread the word.
Another factor affecting adoption is the availability of NFC-enabled smartphones. While 83% of Nigerians use Android phones, not all of these devices have NFC technology, which limits the use of contactless payments. Despite this, CashAfrica is optimistic. They anticipate that more NFC-enabled phones will be imported into Nigeria, which will support the growth of tap-to-pay technology.
CashAfrica’s success will depend on its ability to build a wide distribution network and leverage network effects. Partnering with banks and agent banking platforms like Opay and Moniepoint will be crucial for integrating their solution into existing systems. Being one of the first to offer this technology, CashAfrica hopes to establish a strong foothold in the market before other players catch up.
Ultimately, CashAfrica aims to make payments as easy as tapping a phone, and their efforts could transform the way Nigerians handle transactions. As they continue to engage with banks and fintechs, their first-mover advantage could be key to leading the contactless payment revolution in Nigeria.
