Imagine Africa’s payments industry as a car. There’s the flashy exterior, but it’s the engine that makes it all work. Hydrogen, a payments company launched by Access Corporation, the holding company of one of Nigeria’s biggest banks by assets, wants to be that engine. For two-year-old Hydrogen, the focus is on building a robust infrastructure that can power payments across different channels.
“Our vision is to build Africa’s most powerful payment business network. The real play for Hydrogen is the infrastructure,” Kemi Okusanya, the company’s CEO, told TechCabal.
Although Hydrogen was launched in 2022, Okusanya says 2023 was the company’s “real first year.”
It has launched eight products and claims to have processed approximately 15 trillion Naira in transactions across its different channels in 2023. Like most payment companies, Hydrogen earns a fee per transaction on its platforms.
“A time will come when one in every three transactions happening in Africa will have something to do with Hydrogen,” she said. Hydrogen’s license allows it to operate across the entire value chain, offering services like processing, switching, and super agency.
Though Hydrogen says its play is infrastructure, it competes with fintechs such as GTCO’s Squad, Flutterwave, Moniepoint, and Paystack in the payments market. Squad, for instance, crossed ₦200 billion in monthly transactions in January 2023. Data shows that digital payments in Nigeria have been on the rise in the last half-decade.
Hydrogen has two arms: the merchant business and the switch and card business. On the merchant side, Hydrogen caters to small and medium enterprises (SMEs) and large corporations with tailored solutions. According to the company’s head of merchant business, Zainab Abu, these solutions include POS terminals, Instant Pay, which provides real-time transaction visibility across multiple outlets, a payment gateway that allows merchants to receive payments via their website, and a payment link.
Since launching the merchant business in April 2023, Hydrogen has onboarded 11,000 active merchants across every state in Nigeria. Its transaction volume grew to billions within the first two months of operations, and in January, the merchant business processed 40% of last year’s total volumes.
Abu says Hydrogen POS’s competitive advantage is that it allows other payment types beyond cards, such as bank transfers. Hydrogen will also compete offline against other fintechs that offer POS devices. Last year, Paystack launched virtual terminals, a new product that allows merchants to accept payments with bank transfers for multi-person businesses.
Hydrogen acts as a third-party processor for card transactions on the card and switch business. It offers interbank transfer, bulk payments, and 3D secure, a second-level authentication for card transactions, according to Fiyinfoluwa Olorunsola, head of card and switch at Hydrogen.
Hydrogen’s card and switch business is focused on the financial sector, especially traditional banks and fintechs. “We handle the processing side of things. We process transactions for about 50% of the FUGAZ banks and top fintechs.”
Yet, Okusanya admits it’s still early days. “There is so much in payments. You think you know it, but you discover a new thing.”
