Mobile bank for emerging markets, FairMoney, has acquired SME-focused modern banking platform PayForce to expand financial services offerings to merchants.
According to reports, the transaction was a cash-and-stock arrangement valued between $15 million and $20 million.Â
Oluwatomi Ayorinde, CrowdForce CEO, is joining FairMoney, with the responsibility of taking up the company’s payments division, PayForce by FairMoney.
FairMoney, focused on financial inclusion to serve the underbanked in emerging markets, initially offered credit-led neobanking services to retail customers, and CrowdForce, through PayForce platform provides agency banking services, a branchless banking model that extends financial services to the last mile via a network of human ATMs.Â
The fintech companies provide agency banking services to cover the last mile, and have both evolved through several iterations, competition-driven innovation, and venture capital investments. This has resulted in an array of digital retail and merchant banking offerings in an increasingly competitive market.
While FairMoney began with a digital lending product offering loans from 15 days to 24 months to mainly retail customers, PayForce started up by equipping merchants with Point-of-Sale (POS) devices and enabling them to offer services such as cash-in, cash-out, money transfers and bill payments to retail customers, as well as providing liquidity through its network of partners.Â
Following a successful $42 million Series B in 2021, FairMoney now provides debit accounts, cards, P2P transfers, and payments to over a million retail customers and small businesses, which have become a key element of its business.
With over 10,000 businesses now served, Payforce has expanded its range of products to include business banking, finance team tools, B2B payments and virtual cards. Last February, the company raised a pre-Series A investment of $3.6 million.
Via the acquisition, PayForce merchants using FairMoney as their primary bank will be rewarded with incentives such as an 18% annual return on deposits, a rate that retail consumers have already taken advantage of. FairMoney will also create specific credit products tailored to different types of businesses to tackle the difficulty small businesses in Nigeria have in accessing loans and working capital. Additionally, FairMoney may look to provide banking services to the offline customers CrowdForce has served over the years.
FairMoney is striving to become the leading retail and merchant bank in Nigeria with the aim of gaining more market share. To do so, it plans to expand its product suite by offering credit cards, remittance, stock and investment products for retail customers. Additionally, the fintech will include payroll services, buy-now-pay-later (BNPL) options, and online merchant acquiring for its business-facing products.
FairMoney is reportedly in discussions to raise a bridge round of over $30 million from both current and new investors, money that would be used for making acquisitions (including PayForce’s) and expanding its operations outside Nigeria and across Africa, based on sources in the know. Apart from building its stack, the Tiger Global-backed fintech is also actively engaging in multiple acquisition conversations.
