Nigeria: PalmPay Waives Fees and Creates ₦100M COVID-19 Fund
- Payment startup PalmPay will waive the transfer fees in Nigeria and provide direct payouts to customers in the West African nation who have signed COVID-19.
- Although PalmPay stays in the race to win the fintech market share in Nigeria, the company is looking to weather the country’s COVID-19 crisis for now.
- According to PalmPay CEO Greg Reeve, a development that may come out of the crisis that benefits fintech players is greater acceptance of digital finance in Nigeria.
Africa-focused payment startup PalmPay will waive the transfer fees in Nigeria and provide direct payouts to customers in the West African nation who have signed COVID-19.
The company, which started in 2019 with the sponsorship of China’s Transsion, has established the PalmPay Support Fund. The initiative will begin with 100 million Naira (about $300 K) and will provide individual payments of 100,000 Naira (about $250) to PalmPay clients who contracted the coronavirus.
PalmPay’s effort comes as COVID-19 reached the largest economies in Africa, and fintech platforms on the continent were mobilized as tools to curb the spread.
Early in March, coronavirus numbers by countries in Africa were in the single digits, but by mid-month, those numbers had increased, prompting Regional Director Dr Matshidiso Moeti of the World Health Organization to sound a warning.
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By WHO figures on Tuesday, there were 14,922 COVID-19 reports in Africa and 702 reported virus-related deaths, up from 345 reports and 7 deaths on March 18. Countries such as South Africa, Kenya and Nigeria, the top tech hubs in Africa, have implemented social distancing and lockout policies.
Governments and start-ups on the continent have also turned to initiatives to move a greater volume of financial transactions to digital payments and away from cash — flagged as a coronavirus medium by the World Health Organization.
It is a choice encouraged by the fintech boom that has taken place in Africa over the past decade. By some estimates, the continent is home to the largest share of the world’s unbanked population and has a substantial number of underbanked customers and small and medium-sized enterprises.
However, because of that potential, fintech startups already obtain the majority of VC funding annually in Africa, according to recent data. Nigeria has become the continent’s focal point for digital finance growth, boasting the largest economy and population (200 million) in Africa.
The nation has several new entrants for digital payments and many deeply entrenched today.unched in Nigeria last year on the back of one of Africa’s largest 2019 seed-rounds — $40 million led by Transsion.
In addition to a lot of capital, the investment came with an additional competitive advantage for the startup. Through its Tecno brand, Transsion is the largest seller of smartphones in Africa and PalmPay now comes preinstalled on all Tecno devices.
Although PalmPay stays in the race to win the fintech market share in Nigeria, the company is looking to weather the country’s COVID-19 crisis for now. As most Nigeria — and most of the world — the workers at PalmPay are on lockdown and operating from home, according to the company’s CEO.
Commercial times in the country could be difficult in the coming year. As a result of COVID-19, Nigeria has already seen a decline in economic activity, and as a major oil producer, the nation will face an additional economic blow due to the decrease in demand on petroleum markets that the pandemic has dealt with.
According to PalmPay CEO Greg Reeve, a development that may come out of the crisis that benefits fintech players is greater acceptance of digital finance in Nigeria. In the past, The nation has had a cash-is-king reluctance by sections of the population to use mobile payments and has lagged Africa’s pioneers in digital finance, Kenya and South Africa.
According to Reeve, the current health crisis could change consumer habits in Nigeria. “We’ve seen an increased use in our service, whilst people aren’t able to move around,” he said.
“There is a natural uptake right now for services like mobile money and I think when people start to use it, they’ll continue to use it when the COVID-19 ceases.” He added.
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