Nigerian neobanks and banking agents need each other. The agents are the neobanks’ branches; they open accounts, accept deposits, process withdrawals, and issue cards. In return, the agents—who often have a primary business—earn extra income.
This relationship is crucial because neobanks use the credibility of these agents, who have close relationships with their communities, to distribute 17 million debit cards. The agents help the fintechs meet “customers at the point of their need,” an OPay spokesperson told TechCabal.
OPay and Moniepoint, arguably Nigeria’s two biggest neobanks, sell cards to agents for ₦100, who then sell the cards to customers for ₦1,000, a 900% profit margin. Agents also receive branded materials to advertise the cards. Moniepoint began distributing cards when it entered the retail banking space in August 2023, two years after Opay.
“There’s no business we do with these companies that we don’t see profit,” said Mr. Duke, a POS agent in Ketu. The dynamics of this relationship—where agents make a profit on each card sale—make card distribution expensive. And while cards are costly for fintechs, they have historically been great for customer acquisition.
Agents get cards by applying online or building relationships with card distributors who offer cheaper rates than the online channel. Card distributors are contract staff employed by the neobanks to sell cards to agents. Other agents without a relationship with card distributors must visit the fintechs’ offices to get cards, which translates to a higher cost due to transportation fees.
While some fintech customers can get their cards from their bank by applying through apps, this option is unavailable to customers who use feature phones. They rely on cards for transactions since feature phones cannot support apps for online transactions. “The card is the only channel they use to access their account,” an employee at a fintech company told TechCabal.
“The reason people get cards from us is either that they do not have time to go to the fintech office or they cannot register the cards themselves. They need the cards to perform transactions without a smartphone,” a POS agent in Mile 12 told TechCabal.
Nigeria has about 1.5 million POS agents scattered across the country, but only a few distribute cards due to additional capital requirements and not everyone finds success selling them.
“We sell about three cards per week; the cards do not move fast,” an agent in Ketu who has sold 69 Opay cards said.
Card sales depend on location; agents in residential areas sell fewer cards than those in markets. Mr. Duke sells an average of 20 cards weekly, which he credits to his stall at the busy Ketu bus stop. While card sales dropped during the six-week ban on onboarding new customers imposed on fintechs by the central bank, card sales have returned to similar levels before the ban.
“Customers need the cards, and the fintechs need us to sell the cards. I don’t see this relationship ending anytime soon,” he said.
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