FairMoney Buys PayForce to Boost Retail Banking Offerings
By Adedapo Adesanya
Nigerian fintech startup, FairMoney, has acquired PayForce, a CrowdForce subsidiary, for an undisclosed amount believed to be between $15 million and $20 million.
The acquisition of the merchant payment services that serve small businesses will also see CrowdForce CEO, Mr Oluwatomi Ayorinde, join FairMoney to head its payments business unit.
This is the latest news coming from FairMoney since 2021 when it raised $42 million in a Series B, which saw it expand to India.
According to TechCrunch, the acquisition will provide incentives for PayForce-acquired merchants who use FairMoney as their primary bank, such as an 18 per cent annual return on deposits.
The CEO of Fairmoney, Mr Laurin Hainy, said FairMoney would design specific credit products for different sets of businesses, tackling one of the biggest problems facing small businesses in Nigeria: access to loans and working capital.
“We see ourselves as a retail bank, but the line between merchants and retail is often blurry. We’ve thought about the merchant space more and more, and we see a lot of potential synergies between what PayForce and we have built independently,” he added. “We know that if we combine both businesses, their merchants will enjoy what our retail customers already enjoy.”
FairMoney is also mulling the possibility of banking some of the offline customers that CrowdForce has served over the years.
“PayForce helps them make more money versus a lot of the other competition, which we think are agency banking businesses as they did not build a product with the merchant in mind; they build the product with the agent in mind. There is a huge difference, so we’re not worried about the competitive landscape there,” Mr Hainy added.
FairMoney was launched in 2017 to provide collateral-free loans to Nigerians. Since then, it has expanded its suite of offerings to provide bank accounts and savings features for customers. Users can also pay bills or request cards on the platform.
It has also moved beyond personal loans to business loans, and its acquisition of PayForce is another step in that direction. It will be banking on PayForce agent banking services and partnerships with larger businesses, such as gas stations, to provide liquidity for its agents.