Baxi Shuts Down PoS Operation in Nigeria: 5 Reasons Behind Decision
- Onafriq announced the closure of its Baxi agent banking business in Nigeria, pointing to a combination of economic and market pressures
- The company cited rising costs, naira depreciation, inflation and shrinking margins as key factors behind the decision
- Baxi agents have been given 30 days to move their funds, while Onafriq says it will keep other payment operations running in Nigeria
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Onafriq, the pan-African payments company, has announced the closure of its Baxi agent banking business in Nigeria, citing economic pressures and changing customer payment habits that have made its operations difficult to sustain.
The company, which acquired Capricorn Digital Limited, the operator of Baxi, in 2021, said persistent inflation, naira depreciation, rising operating costs and increasing competition had weakened the business.
Source: Getty Images
Baxi had built a network of more than 460,000 agents as of 2025, providing services to customers who relied on PoS terminals for cash withdrawals, transfers, bill payments and other transactions, TechCabal reports.
However, the size of its network did not prevent the business from experiencing financial difficulties.
Here are five reasons behind the shutdown.
1. Rising operating costs
Running a large agent banking network requires spending on technology, infrastructure, staff and other operational activities.
As these expenses increase, payment providers must generate enough revenue from transactions to cover their costs and remain profitable.
For Onafriq, rising operating expenses contributed to the decision to discontinue Baxi's operations.
2. Persistent inflation
Inflation has increased the cost of doing business in Nigeria, putting pressure on companies across several sectors.
For agent banking providers, higher expenses can reduce the amount left from transaction fees and other revenue after operating costs have been paid.
Onafriq identified inflation as one of the economic challenges that weakened the commercial viability of its Nigerian agent banking business.
3. Naira depreciation
The depreciation of the naira was another factor cited by the company.
Currency weakness can increase the local-currency cost of technology, equipment and other expenses linked to foreign currencies.
Combined with inflation and rising operational expenses, the weaker naira added to the challenges of maintaining a profitable agent banking network.
4. Growing competition and shrinking profit margins
Nigeria's PoS market has attracted a growing number of operators and agents, increasing competition for customers and transactions.
As providers compete for business, the revenue generated from transactions may not increase enough to cover the cost of maintaining their networks.
Onafriq said competition and shrinking margins had made its offline agent banking operations increasingly difficult to sustain.
The company's experience highlights how expanding a network does not automatically translate into higher profits when the market becomes more competitive.
Source: Getty Images
5. Increasing use of instant bank transfers
The growing adoption of instant account-to-account transfers has changed how Nigerians make payments.
Customers can now transfer money directly between bank accounts through digital banking channels without necessarily visiting a PoS agent.
Onafriq said the shift towards these alternative payment methods had weakened offline payments and affected the economics of its agent banking business.
However, PoS terminals continue to serve customers who need cash withdrawals and other services, particularly in areas where access to banking facilities may be limited.
What happens to Baxi agents?
As part of the shutdown process, Onafriq said Baxi agents had been transitioned to another principal bank and given 30 days to transfer their funds to their preferred principal bank, Punch reports.
The company also said its support teams would assist agents during the transition.
PoS terminal transaction increases
Earlier, Legit.ng reported that the value of transactions over Point of Sale (PoS) terminals in Nigeria surged to N18 trillion in 2024, hitting an all-time yearly record.
This was based on data obtained from the Nigeria Inter-Bank Settlement System (NIBSS).
Driven by a prolonged cash shortage at ATMs and the aggressive expansion of PoS deployments by fintech companies, the 2024 record marked a 69% increase compared to the N10.7 trillion value of PoS transactions in 2023.
Source: Legit.ng
