African payments startup firm, PalmPay, has announced a $40million seed round as the firm launches financial services in Nigeria.

The round was led by leading mobile phone brand Tecno Mobile. NetEase, one of the largest internet technology companies in China and Mediatek, a leading semi-conductor firm, also participated in the round.



The firm will use the cash to grow its digital financial services businesses in Nigeria, Ghana and to support upcoming launches in several other African countries.

PalmPay offers consumers a range of digital services via its mobile app, including P2P transfers, airtime and bill payment. Billing itself as “the payment app that rewards you”, its USP of offering cashback and discounts to its users has caught on in the price-sensitive Nigerian and Ghanaian markets.

In Nigeria, PalmPay is offering 10per cent cashback on airtime purchases and bank transfer rates of N10 with free deposits and withdrawals to its mobile wallet. Over a million transactions have been made on the platform within its first two months of pilot operations and the company is now eyeing rapid expansion.

PalmPay also announced a strategic partnership with major mobile phone brands Tecno, Infinix, and Itel, which will see the payments app exclusively pre-installed on at least 20 million phones in 2020. The mobile app is also available for download on the Google Play Store and iOS App Store.

In a market where only 40per cent of adults have access to a formal financial account, PalmPay plans to provide for both banked and unbanked consumers to help it achieve nationwide reach. To do this, the company has obtained an Approval-in-Principle to operate as a Mobile Money Organisation (MMO) from the Central Bank of Nigeria (CBN). This allows it to build an agent network to facilitate in-person cash in and cash out to its mobile wallet.



First in line to be converted to PalmPay agents are the thousands of retail stores that are part of the Tecno distribution network, and the company is in the process of onboarding independent agents too.

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 CBN plans to ensure that 80 per cent 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 per cent, meaning that as much as 36.8 per cent of adults still lack access to financial services.


This year, the current CBN Governor Godwin Emefiele also re-affirmed the nation’s cashless policy. The policy intends to encourage electronic payments, with the objectives of developing the payments system, as part of the key requirements for achieving the Payments National Vision; whilst reducing the risk and costs associated with high usage of cash.

PalmPay also aims to onboard the over 100,000 merchants that are part of the Visa network in Nigeria. Earlier this year, PalmPay and Visa announced a strategic partnership to deepen financial inclusion in key African markets through joint initiatives including technical integrations, virtual cards, and merchant payment solutions.

This ecosystem approach is key to PalmPay’s strategy as the company aims towards becoming Africa’s largest financial services platform. “Our goal is to provide the best choice and value to consumers in the market, and to achieve this PalmPay should be a one-stop financial hub,” says Greg Reeve, PalmPay Global CEO. “We want to focus on providing the most reliable payments infrastructure and widest reach and we are happy to partner with other players in the market who would like to benefit from this to jointly offer the best value to our user base.” Such partnerships are already in the works in the areas of e-commerce, lending, and communications, Reeve said.

For TECNO, the investment in PalmPay seemed like a natural next step as it seeks to develop its mobile ecosystem. “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.