Building a Nigerian cross-border ecosystem that works: Compliance, collaboration, and real impact

Nigeria is a dynamic fintech hub in Africa, presenting significant opportunities alongside distinct operational complexities. Cross-border payments in this environment are shaped by intricate foreign exchange (FX) regulations, a diverse financial ecosystem, and a strong demand for innovative solutions that support both businesses and individuals.

Entering Nigeria

When Onafriq entered Nigeria, we faced unique challenges. We partnered with local companies like Cashpot and Paga for payouts to our money-transfer operators (MTOs), but transfers could only be sent in dollars, and recipients had to withdraw and exchange cash at the same bank, slowing payments. MTOs also needed a Central Bank of Nigeria (CBN) licence to send funds – a responsibility that in most markets falls to mobile-money operators. This hurdle shaped our regional approach.

We quickly learned that Nigeria’s bank-led market differed from Onafriq’s mobile-led roots. Our model, operations, and treasury systems - built for mobile-led markets - couldn’t deliver the progress we needed. We needed to pivot, and so entered Nigeria directly, embed in the local financial ecosystem, and build strategy from within. This presented an acquisition opportunity and gave us scope to experiment, engage directly with the CBN, and deliver the right use cases and enablers for customers, partners, and regulators.

Regulatory challenge to strategic advantage

Complying with the CBN’s foreign exchange regulations is a key aspect of operating in this market. At Onafriq, we see compliance as a requirement, and foundation for trust and growth. Many companies struggle by treating regulations as constraints. By partnering with authorised Bureau De Change operators and building strong regulatory relationships, we’ve turned compliance into a market differentiator.

A major regulatory challenge arose from Nigerian licensing requirements for MTOs, meaning Onafriq could not directly support terminations to Nigeria without an International MTO licence. As the region’s largest remittance recipient, Nigeria remained outside our footprint, limiting the capabilities we could offer partners.

To turn this to our advantage, we deepened our commitment to building trust, the foundation of the Onafriq Hub. This involved continuous effort in reliable integrations, robust risk mitigation, offering multiple termination points in local currencies, and ensuring rigorous compliance with full adherence to each country’s requirements. 

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In Nigeria, a strong partnership with an innovative agency banking network led to its acquisition, accelerating our learning and market presence. We applied these lessons to refine processes and strengthen partner confidence. Strategic investment in compliance built trust and capability that set us apart.

Part of a patchwork

Nigeria’s cross-border payments ecosystem works best through collaboration. Banks offer regulatory infrastructure, local currency settlement, liquidity, trade facilitation, and financial structuring. Fintechs like Onafriq add agility and cross-border expertise, while mobile operators expand access through agency banking to underserved communities.

Our partnership with MTN Nigeria’s MoMo Payment Service Bank (PSB) makes it the country’s first mobile money operator to enable two-way cross-border transactions. MTN MoMo users can now send and receive funds with about 23 countries directly via mobile money - access previously limited almost entirely to banks.

We want all wallet operators - MNOs, fintechs like OPay or PalmPay, and banks with digital apps - to have two-way access across our 43-country footprint. For Nigerians, this means sending money to countries like Benin, Cameroon, and Rwanda for essentials such as health, education, and food. Strong flows from Cameroon into Nigeria are often driven by traders buying stock in Nigeria to sell back home.

What’s next

Onafriq’s long-term vision for cross-border payments in Africa is to make the process as easy as a phone call, regardless of where you are or what payment instrument you’re using. We want you to simply enter the number you want to send to, and we take care of the rest,  making payment as easy as making a phone call. For our partners, we want to be the most trusted inter-continental connector. They shouldn’t have to worry about back-office operations, connections, settlements, regulatory compliance, or transaction screening. We want to be our partners’ biggest and, more importantly, most trusted contact.

Nigeria is essential to any pan-African strategy: with the continent’s largest population and a powerful economy, success demands operating from within and understanding the market.

The country’s financial sector is growing rapidly, alongside evolving regulation. Our compliance team ensures we meet new requirements while staying competitive. PAPSS, now facilitating trade across 15 countries, shifts our role from competitor to partner for domestic businesses. With a network built over 15 years, we act as an ecosystem enabler for cross-border transactions and trade in Nigeria, with PAPSS as a key partner.