PalmPay, an Africa-focused mobile payment start-up, recently announced a $40million funding round led by leading mobile phone brand TECNO mobile to advance financial inclusion across the continent.
The Fintech firm has officially launched a smartphone app with a mobile wallet in Nigeria after a pilot phase that saw it gain 100,000 users and process more than a million transactions within two months.
“PalmPay will use the capital to grow its digital financial services business in Nigeria and Ghana and to support upcoming launches in several other African countries,” Greg Reeve, Global PalmPay CEO said.
NetEase, one of the largest internet technology companies in China, and Mediatek, a leading semiconductor company, also participated in the round.
The PalmPay mobile wallet offers customers a platform to top up funds electronically or via offline access points, with the ability to make and accept individual and merchant payments. PalmPay offers consumers a range of digital services, including P2P transfers, airtime and bill payment.
With a tagline of “the payment app that rewards you,” PalmPay’s USP of offering cashback and discounts to its users have caught on in the price-sensitive Nigerian and Ghanaian markets. In Nigeria, PalmPay is offering 10% cashback on airtime purchases and bank transfer rates of N10 with free deposits and withdrawals to its mobile wallet.
As part of its investment deal with TECNO mobile, PalmPay also announced a strategic partnership that will see the payments app pre-installed on up to 20m phones in 2020. A similar deal was closed with Infinix and Itel. The app is also available on the Google Play Store and iOS app stores.
“Tecno has helped expand access to smartphones among the Nigerian population. We are now looking to leverage this infrastructure to further improve people’s lives,” said Stephen Ha, General Manager of TECNO Mobile. “We see a huge growth opportunity in mobile payments and financial services on the continent and are looking forward to working together with the PalmPay team to help shape the future of payments in Africa.”
In a market where only 40 percent of adults have access to a formal financial account, PalmPay wants to provide financial services for both banked and unbanked consumers to achieve nationwide reach.
To do this, it has obtained an Approval-in-Principle for a Mobile Money Operator license from the CBN, which allows it to build an agent network to facilitate in-person cash in and cash out to its mobile wallet. First on the list to be converted to agents are the thousands of retail stores that are part of the TECNO distribution network, while independent locations are being boarded by a dedicated team.
PalmPay’s stated aim of including the unbanked in its payment platform comes at a time when the Nigerian government is promoting several policies and initiatives aimed at furthering financial inclusion.
The Central Bank of Nigeria plans to ensure that 80 percent of Nigerian adults are included in the financial net by 2020. It launched the National Financial Inclusion Strategy (NFIS) in January 2012 to help achieve the set target. However, recent data by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning that as much as 36.8 percent of adults still lack access to financial services. Innovations like PalmPay can play a role in accelerating progress to meet these ambitious national financial inclusion goals.
PalmPay also plans to leverage the network of over 100,000 merchants belonging to Visa, which the company counts as strategic partners. In April 2019, PalmPay announced that it would work together with VISA to roll out innovations in the African digital payments space.
Visa cardholders can initiate payments within the app and make online and mobile payments by attaching their card details to their PalmPay profile. Non-card carriers will be able to generate a virtual Visa card upon registration.
According to the CEO of PalmPay, this ecosystem approach is key to the company’s goal of becoming Africa’s largest payments platform. “We want to provide the best choice and value in the market to consumers so that PalmPay becomes a one-stop financial hub, online and offline,” Reeve said. Through its partnerships with TECNO mobile and Visa, PalmPay is building out a very reliable payment network that will soon reach millions of users.