TechCabal Daily – OPay’s strength in weakness

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OPay has hit pause on its lofty ambition to be Nigeria’s supreme app for all things. The company has suspended operations on its non-fintech verticals in transportation, logistics and food delivery. These products suffered from the “harsh business conditions” caused by low consumer activity due to COVID-19 lockdowns around the country.

There were other factors at play, however. ORide, the motorycle-hailing service, was
on life support. Lagos state government’s ban on motorcycles in February effectively spelt ORide’s end, even if it remained operational in other cities in the country. OCar, their taxi-hailing product, is a more curious case: it never really took off, barely acknowledged by users and drivers in a market dominated by Uber and Bolt. The pandemic is taking the blame for its suspension but there is not much to be said for its viability in the best of times.

The good news for OPay is that, thanks to its fluorishing payments business, it is in a position to re-think its strategy around the suspended products for when outdoor life returns to normal. OPay accounted for 60% of the mobile payments sector in April, according to Nigeria’s Inter-Bank Settlement Scheme. OPay insists they are having their best period facilitating payments, despite a decline in transactions in the sector due to the pandemic. In a word, they are going nowhere.

It is the fintech’s second year of profits. According to Chijioke Dozie, the CEO, their long-term vision of becoming a pan-African digital bank will benefit from a transparent approach about its financial strength. He wants more companies in the sector to be forthcoming with their accounts too, helping build confidence in the evolving tech-driven financial services industry.

But is this feasible for everyone? Carbon was founded in 2012 and only started opening its books publicly from 2018, the year it started making profits. It’s a big ask for newer startups who have to burn cash for some years before any hope of ending in the black materializes. That said, it is not be the riskiest path to take if you would convince undecided customers that you are disruptive indeed.