Coronavirus Weekly

Coronavirus Weekly Update: Who believes OPay?

By Victor Ekwealor Jun 15, 2020

OPay’s core payments business is still growing

Image credit: TechCrunch

There were two high points in last week’s edition; a high recovery rate in Africa, and reduced hysteria.

In retrospect, the latter doesn’t look as good as it sounded. And I captured why in this tweet;

“COVID-19 hysteria has died. Good for mental health, but fatal for public health.

People were more careful when they were scared.”

Easing lockdowns has meant more movement. But this has also caused disregard for social distancing rules,

New Zealand became the first country to be rid of the virus and this signals that the days of COVID-19 are numbered. But until it completely disappears, we’ll co-exist with it for the meanwhile. And, hopefully, be prudent.

The topic of this week’s conversation is the exclusive OPay story on TechCabal and how the pandemic has boosted the fintech’s core business.

The fintech made claims to some interesting numbers, and we’ll dissect them today.

ICYMI
Digital payments have been unsurprisingly affected by the pandemic, so much so that two editions of this newsletter were dedicated to the highs and lows.

Against all odds, OPay says its Nigerian business is doing fine. Regardless of the battering it took from a state government transport policy and pandemic-induced change in consumer behaviour, the company says its core business, payments, is actually growing.

In an exclusive interview with TechCabal, OPay’s country manager, Iniabasi Akpan said:

“..some of this recent growth has been fuelled by the pandemic.”

“Our business has been growing from that point [January]. Transaction volume has grown over 40% from January to May, both offline and online. …..I would say the growth has been phenomenal. Our growth has been unprecedented.”

A pandemic-fueled growth is not unusual. In May, Paga’s CEO, Tayo Oviosu said his company had seen a 330% QoQ growth in mobile wallet sign-ups.

The company went further to claim that:

“It now accounts for over 60% of mobile money transaction value and volume in Nigeria.”

While TechCabal could not independently verify this figure, it raises a lot of questions.

If OPay gets over 60%, does this mean, QuickTeller, Paga, Kudi, and other mobile money operators only 40%?

It is important to note that 11-year old Paga lays claim to 15 million users across Nigeria; 3 times more than OPay.

Claims, claims, claims, and inside tales of dominance

There are explanations for OPay’s tales of dominance, and the easiest one is to dismiss it as a lie.

The above numbers are outrageous, but I will try to condense plausible explanations into a few sentences;

A gargantuan offline presence: Even though West Africa is currently the rising star of mobile money in Africa and on track to surpass poster child East Africa, there are still over 60 million unbanked adults in Nigeria; more than half of the population.

Offline, Paga has 24,000 agents, and even though it is targeting 500,000, First Bank’s First Monie currently boasts 50,000. This means OPay’s 300,000 may just be a combined strength of every player in the market.

Double counting: Counting transactions for mobile payments will confuse a 5-year old. Moving ₦500 between my Paga, OPay and First Monie wallets counts as 3 different
transactions on all services regardless of where the money ends up.

Fintechs are constantly throwing numbers around to signal growth to investors, competition, and maybe customers. It does not help that there is no official data to verify most of these claims, especially in Nigeria.

For OPay, in its quest to build the superapp of Africa, capturing the Nigerian market is very crucial and this is reflected in its laser focus on the market and resultant guerilla marketing tactics.

While we probe the veracity of its claims to dominance, doubling down on its core service(s) seems like the company’s surest bet to surviving economic aftershocks of the pandemic, and right now it seems to have its head in the game.

Odunayo Eweniyi on managing savings culture during a crisis
Odunayo Eweniyi, Chief Operating Officer and co-founder at PiggyVest, speaks about how the company found its audience through trials and organic promotion on social media, and why they are
doubling down on facilitating digital asset management for millennials.
Here’s the full video of the interview.

A Nigerian government agency is reneging on plans to support startups. While the National Information Technology Development Agency (NITDA) has reportedly implemented some of the recommendations made by the special committee it created, it appears that a lot is still outstanding. The agency set up the committee on the impact of COVID-19 on Nigeria’s tech ecosystem on April 1. In its recommendations, the committee focused on four areas: business continuity, startup funding, government policy and support for tech hubs.

Distributed innovation and tech ecosystems is how Africa will win. In the latest edition of our TechCabal Live sessions, Tijani, CEO at CcHub shared insights into ecosystem building, iHub acquisition, raising capital, team building and a number of other issues pertaining to technology and innovation across
the continent.

Speaking about the pandemic, Tijani said, “the pandemic will impact tech hubs for whom co-working spaces are a huge part of their model but it is also a massive opportunity for hubs really focused on tech and innovation.”

New coronavirus cases reported at reopened Tesla factory
Last Tuesday, the Washington Post reported that two anonymous workers told the paper that several cases of the virus had been confirmed at a Tesla production plant in California and a nearby
factory.

After initially disagreeing with local officials, it closed its factories in March. In May, CEO, Elon Musk defied officials and later re-opened its production plant without getting their blessing.

An increase in demand overwhelmed this Amazon competitor. Online organic grocery platform, Thrive Market struggled to keep up with orders after coronavirus lockdowns began. As Amazon struggled with fulfilling its own pandemic-induced demand, Thrive Market found customers flocking to its site. “It was excruciating,” CEO Nick Green said, describing the company’s experience.

How Tinder is adapting to no in-person dates
There’s interest from users in new product features like video calls and engagement has gone up. Tinder is finally introducing a one-on-one video calling feature that it says will be heavily moderated for content and safety, more than six years after its launch.

Big
businesses are spending millions on tech for the new normal. Here’s how the little guys are getting by. A local brewery in Brooklyn, trying to stay alive, turned interested staff members into delivery drivers and fulfilment employees. It launched a fully-fledged online ordering system for its beers within a few weeks whilst struggling with a lack of tech skills. But while the pandemic has created new opportunities for some retailers, not everyone has been able to make lemons from lemonades.