Interswitch Quickteller Nigeria

Interswitch

Accelerating financial inclusion for sub-Saharan Africa

Industry:

Financial Services

Region:

Sub-Saharan Africa

Website:

interswitchgroup.com

37.5 0 M

Customers

4.9 0 B

Annual transactions processed

52,016 0

Agents nationally

Interswitch is Africa’s leading integrated payments and digital commerce company, processing more than 90% of Nigeria’s card and mobile money transactions. The company’s range of innovative products target underbanked and underserved consumers by meeting them where they are, and enabling transactions through an extensive agent network.

The Challenge

The Challenge

In Nigeria, 26% of adults are still financially excluded, while neighbouring countries such as Ghana have close to 95% inclusion.1

Critically, the poorest parts of the population continue to lag behind, with only 27% of the poorest 40% holding a bank account.2 Rural populations and women continue to make up a large portion of the underserved and unserved. As a consequence, the majority of transactions in Nigeria continue to occur through cash, with low penetration of formal lending, insurance and other financial products.

An average Nigerian is over five times more likely to borrow money from family and friends (28.3%) versus a bank (5.3%) and only 2.6% of the population have a home loan.3 The reasons for these low rates of financial inclusion are numerous. Low levels of income or irregular income are an increasing barrier to formal financial services use, cited by half of adults in 2023, while physical access to bank branches was cited by a third of adults.4

At the same time, financial inclusion is key to modernising Nigeria’s economy, lifting savings rates and enhancing household resilience, stamping out worker exploitation in the informal economy, creating more opportunities for women and girls and achieving the Sustainable Development Goals.

Nigeria’s transition to cleaner, decarbonised technologies also relies on improved financial inclusion. In Kenya, where financial inclusion is greater, mobile money products have helped drive a spike in pay-as-you-go renewable energy usage through providers such as Sun King. Meanwhile, 80 million Nigerians lack access to electricity,5 and almost $14 billion annually is spent on small diesel generators to supplement

grid power.6

1 EFinA, Access to Financial Services in Nigeria, 2023 | 2 Ibid | 3 Payments at point of sale by type in Nigeria, Statista 2020 | 4 EFinaA, Access to Financial Services in Nigeria, 2023 | 5 World Bank, Sustainable Energy for All, 2022 |6 Rural Electrification Agency, Nigeria Minigrid Investment Brief, 2017

Nigeria access to financial services (2010 - 2020) Nigeria access to financial services (2010 - 2020)
Source: KPMG, Nigeria's Financial Inclusion: The Way Forward, 2021
Nigeria access to financial services (2010 - 2020) Nigeria access to financial services (2010 - 2020)
Source: KPMG, Nigeria's Financial Inclusion: The Way Forward, 2021

Interswitch's Solution

Interswitch's Solution

Interswitch is Nigeria’s largest financial payments interchange, processing more than 90% of the country’s card and mobile money transactions.7

It is strategically positioned to deliver rapid financial inclusion to Nigeria’s 230 million people, as well as neighbouring markets in sub-Saharan Africa, where one billion emerging consumers live.8

Interswitch has six key business lines, including three that directly interface with and target the unbanked and underbanked customer. These three businesses – Inclusio, Paytoken and Paymate – provide a comprehensive suite of financial tools to help transition Nigeria’s, and broadly sub-Saharan Africa’s, payments ecosystem towards better efficiency and transparency.

Inclusio, a banking network of almost 50,000 agents, helps individuals access a range of financial services from deposits, cash out, mobile top ups and fund transfers. With close to half of the country’s population classified as rural or peri-urban, Inclusio leverages a broad agent network to access harder-to-reach consumers, also reducing the time and costs that customers incur travelling to a bank branch and providing services outside of regular banking hours.

Paytoken offers a range of physical cards and electronic tokens for payment under the Verve brand. Transactions through these products have grown rapidly at over 30% annually across the last five years, with 45 million cards now in circulation. Verve prepaid debit cards, in particular, offer a low barrier to entry for unbanked customer who may be apprehensive about signing up for a bank account.

Paymate, another key Interswitch business, operates a nation-wide merchant platform that drives SME growth. It has already registered 5,100 merchants on its platform, allowing them to accept payments and reach customers without bank accounts.

7 EFInA, Access to Financial Services in Nigeria 2020 Survey, 2021 | 8 UN Population Fund, World Population Dashboard, 2024

Financial access points by country income group Financial access points by country income group
Source: Financial Access Survey and IMF staff calculations
Financial access points by country income group Financial access points by country income group
Source: Financial Access Survey and IMF staff calculations

LeapFrog’s Impact

LeapFrog’s Impact

LeapFrog co-led an investment in Interswitch in 2022 and has helped to scale the company’s impactful technology solutions to reach more than 5.9 million emerging consumers.

With deep experience in payments and financial services in Africa, LeapFrog is helping Interswitch to expand its reach across Nigeria and further into sub-Saharan Africa. Domestically, this includes expanding its agent network to better serve regional areas of the country, where traditional banking infrastructure remains limited. Additionally, LeapFrog’s investment team has supported the company as it grows its partnerships internationally. Partnerships now include financial institutions in Kenya, Gambia, DRC and Uganda.

Recognising the significant growth in the electronic payments market, LeapFrog’s team has worked alongside Interswitch to identify adjacent market opportunities and has helped to set out the governance and risk structures to ensure sustainable practices and process are in place as the firm scales. This comes as Africa’s domestic e-payments market is expected to see revenues grow by approximately 20% per year, to reach $40 billion by 2025. By comparison, global payments revenue is projected to grow at 7% annually.

Further programs planned include engagement with LeapFrog’s CX Launchpad to drive improvements for the company’s vast agent network. Less than half of agents and merchants are classified as active users, suggesting strong potential for improvement with further focus. Meanwhile, 75% of Interswitch’s merchants are major retail stores, suggesting that improved marketing and CX design directed towards Nigeria’s 40
million MSMEs can deliver rapid expansion of this platform and improved penetration of digital payments infrastructure.

LeapFrog is committed to improve the disclosure of key impact data and support enhanced ESG risk monitoring and management at Interswitch. Together, LeapFrog’s work with Interswitch is ensuring the company can continue to scale ethically, sustainably and accessibly, and champion greater financial inclusion in Nigeria and sub-Saharan Africa.

Page last updated September 2024.

Africa's electronic payments market is expected to grow by 152% from 2020 to 2025 Africa's electronic payments market is expected to grow by 152% from 2020 to 2025
Source: McKinsey & Co, The future of payments in Africa, 2022
Africa's electronic payments market is expected to grow by 152% from 2020 to 2025 Africa's electronic payments market is expected to grow by 152% from 2020 to 2025
Source: McKinsey & Co, The future of payments in Africa, 2022

Learn more

Interswitch is one of many LeapFrog investments in Financial Services. Read more about our work in the sector.

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