Merchants are flooding into the territory that used to be dominated by agents, reducing profits and increasing concerns about redundancy in the market.
The move led the Federal Competition and Consumer Protection Commission (FCCPC) to demand the immediate reversal of the fee hike. It threatened to slam them with a fine for violating its cease-and-desist order.
Following the FCCPC threat, leaders of the agents’ association under the aegis of Mobile Money and Banking Agents (AMMBAN) said the rugged business terrain made the fee hike a necessity.
AMMBAN released price adjustments for different transactions, which riled the public against the operators.
According to many agents, high inflation in Nigeria is to blame. Still, they also highlighted another threat—the foray into their territory by merchants threatening to throw them out of business.
At the height of the cash crisis in Nigeria, caused by CBN’s naira redesign policy, bank agents or PoS operators held sway and increased charges by as high as 30%.
Many agents say they grapple with inflation and growing competition eating away at the little they make.
BusinessDay reports that merchants and agents share parallels because they are both in the business. The difference is in the products and services they offer.
While agents are cash-in-cash-out merchants selling cash, merchants are used in business to sell goods and services like petrol stations, schools, hospitals, market traders, and supermarkets.
The big players such as MoniePoint, PalmPay, Parkway, and Opay have reported an increase in merchants creeping into the spaces of money agents.
MoniePoint, a relatively new entrant, said before 2023, bank agents dominated the terrain, accounting for 80% of PoS issuance on its platform.
Moniepoint reportedly serves 1.3 million businesses, and PalmPay celebrated 25 million users recently and said they are charged for the future.
Opay said it has 35 million registered app users and about 500,000 agents in Nigeria who rely on the platform to send and receive money.
The battle of wits among the top players in the industry is not just starting but is well underway, and Nigerians are the primary targets.