Equilibrium Zone

What Is Financial Technology – Fintech?

Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. ​​​At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones. Fintech, the word, is a combination of “financial technology”. 

When fintech emerged in the 21st Century, the term was initially applied to the technology employed at the back-end systems of established financial institutions. ​Since then, however, there has been a shift to more consumer-oriented services and therefore a more consumer-oriented definition. Fintech now includes different sectors and industries such as education, retail banking, fundraising and nonprofit, and investment management to name a few.

The Nigerian FinTech Industry was in its infancy stage a few years ago but has matured to become a major player in Africa. However, Nigeria is classified as a developing FinTech economy compared to its more mature global peers such as the UK, Singapore, Australia, Sweden, and India. It is estimated that Nigerian FinTech revenues will reach $543million by 2022, driven by increasing smartphone penetration and the unbanked populations. In 2019, Nigeria officially recognized its first FinTech unicorn, with Interswitch achieving a valuation of $1billion based on a $200million investment from VISA. Following shortly in 2020, Stripe, a US-based financial services company, agreed to buy Paystack in a $200m deal, just five years after Paystack was founded. For this maiden edition of the Nigeria FinTech Census, we see an industry that has a definition, is gradually gaining international recognition, and is increasingly embraced by consumers and with stronger collaboration between FinTechs and incumbents. The strength of the Nigeria FinTech ecosystem is underpinned by individual and interconnected strengths across each of the key attributes investigated throughout this report:

Capital… access to capital (both domestic and international) has improved markedly since 2018. Despite the considerable increase in investment, our research indicates that access to late-stage and growth capital remains a challenge for Nigerian FinTechs. 

Demand… Demand is directly related to the success of FinTechs and we have seen increased adoption of Digital Financial Services particularly with the Covid-19 Pandemic.

Talent… the quality and volume of FinTech talent in Nigeria is limited and insufficient. Attracting and retaining talent remains the biggest challenge faced by FinTechs in Nigeria. 

Policy and Regulation… Some progress has been made to create a supportive environment for FinTechs, however, there is a unique opportunity to improve the FinTech policy landscape and make it a differentiator in Africa. With the COVID-19 pandemic and the impact it has had on the Nigerian economy, it has created an opportunity for FinTechs to contribute to economic growth. For this to happen, it is important that entrepreneurs are able to scale up, improve their value propositions, and deliver on Nigeria’s FinTech potential.

The Fintech (Financial Technologies) market largely comprises sales of technology and platform-based financial services. Companies in this market offer end-to-end process financial services and solutions to automate financial processes over the Internet. These companies in the global space are increasingly using blockchain technology to better security and operational efficiency. This technology helps maintain the authentication of data by restricting changes in older data blocks while allowing the users to continue adding new data blocks, thus, providing high security and transparency to companies operating in the fintech market, thereby improving trade accuracy, speeding up settlement processes as well as reducing risks.

The fintech market is segmented by;  Type of service

The fintech market can be segmented by type of service into payments, wealth management, insurance, personal loans, personal Finance, fund transfer, etc. The insurance market was the largest segment of the FinTech market by type of service, accounting for $54,831.4 million or 49.3% of the total market in 2019. The fund transfer market is expected to be the fastest-growing segment going forward at a CAGR of 23.9%.

Service Provider

The market is also segmented by service providers i.e., payment processors, securities brokerages and Investment Firms, banks, non-banking Financial Companies, etc. The payment processors were the largest segment of the FinTech market by type of service provider, accounting for $46,701.3 million or 42.0% of the total market in 2019 and this market is also expected to be the fastest-growing segment going forward at a CAGR of 10.2%.


 These include mobile commerce and transfers, robotic process automation, data analytics, etc. Mobile commerce and transfers were the second largest segment of the FinTech market by technology, accounting for $21,955 million or 19.7% of the total market in 2019. The robotic process automation market is expected to be the fastest-growing segment going forward at a CAGR of 15.8%.


Segmentation by geography includes North America, South America, Asia-Pacific, Eastern Europe, Western Europe, Middle East, and Africa. North America among others is the largest region in the Fintech market, accounting for 40.8% of the global market in 2019. 

The global Fintech market reached a value of nearly $111,240.5 million in 2019, having grown at a compound annual growth rate (CAGR) of 7.9% since 2015, and is expected to grow at a CAGR of 9.2% to nearly $158,014.3 million by 2023. Also, the market is expected to grow to $191,840.2 million in 2025 at a CAGR of 10.2% and to $325,311.8 million in 2030 at a CAGR of 11.1%. Big Tech companies that include Google, Amazon, Facebook, and Apple are aiming at financial service, which positively impacts the growth of the fintech market.

The top growth potential in the FinTech market by type of service will arise in the insurance market, which will gain $15,343.3 million in global annual sales by 2023. The top growth potential in the FinTech market by type of service provider will arise in the payment processors market, which will gain $22,163.8 million in global annual sales by 2023. The top growth potential in the FinTech market by technology will arise in the other market, which will gain $22,727.3 million in global annual sales by 2023. The FinTech market size will gain the most in China at $19,664.4 million.

Recent data from Innovate Finance reveals that FinTechs have raised more than they did in the whole of 2020.  34% increase has been witnessed since about US$5.7bn have been made in 2021 as compared to US$4.3bn in 2020. 

Fintech Landscape

Fintech startups received $17.4 billion in funding in 2016 and were on pace to surpass that sum as of late 2017, according to CB Insights, which counted 26 fintech unicorns globally valued at $83.8 billion. The same firm reported that there were 39 VC-backed fintech unicorns worth $147.37 billion by the end of 2018.

North America produces most of the fintech startups, with Asia a relatively close second. Global fintech funding hit a new high in the first quarter of 2018 let by a significant uptick in deals in North America. Asia, which could surpass the United States in fintech deals, also saw a spike inactivity. Funding activity in Europe was at a five-quarter low in Q1 2018 but surged back in Q2. 

Some of the most active areas of fintech innovation include or revolve around the following areas:


Blockchain technology, including Bitcoin Ethereum, a distributed ledger technology (DLT) that maintains records on a network of computers, but has no central ledger.

Savings and Investment:

Fintechs in Nigeria offers investment platforms that tend to bridge the knowledge gap in investments in financial instruments, eliminating information asymmetry,  and reducing the hassles associated with financial instruments. In the Nigerian space, the savings and investment subsector is one of the most populated by fintech firms, among which the most dominant factor in this section is the Piggyvest app.

Piggyvest offers users the financial freedom to not only save responsibly but put their savings into use by investing them. It launched in 2016 as a savings platform – Piggybank – and later rebranded to include investments – Piggyvest. It prides itself as the first online savings and investment platform in West Africa and boasts of 350,000 active users.

Piggyvest promises users 10-13% interest rates on their savings and up to 25% on investment in financial securities. At just two years into the business, Piggybank announced that it had raised $1.1 million in seed fund, and saw a growth in savings rate by up to 3000% between 2016 and 2017. On Google play store, it records more than 500,000 downloads which are about five times more than its two closer competing savings and investment platforms like Cowerywise and i-invest (100k+ each). It also ranked 4.7 stars with 20,000 reviews.  Also, wealth.ng fintech companies have gained ground in the demand for fintech services, Wealth.ng is introducing high-scale innovation into the market. Recently it entered into a partnership deed with Paga, one of the dominant names in the money transfer sector of the industry, to improve the quality and efficiency of service delivery. Among the industry, there are hardly any existing partnerships, instead, each company competes for customer acquisition and better service.

Wealth.ng sees business differently. A decade ago, many people would dismiss the thought of investing in financial securities for lack of adequate knowledge of how it works or understanding of the trends. Wealth.ng has completely bridged this gap by including consumer education as part of its services. With this, they walk potential investors through every step and provide an array of investment options for each person.

Other players in the savings and investment subsector include Afrinvest, Kudi, Investment one, Payday investor, and many others.

Mobile Payments: Interswitch

This is no doubt the busiest in the FinTech industry in Nigeria, and one of the top FinTech areas globally. According to the Central Bank, between January to December 2019, the volume of transactions via mobile monies stood at 377,265,208 which reflects a transaction value of N5 trillion. The FinTech company at the forefront of this charge is Interswitch. In 2019, it sold a 20% share of the company to Visa for $200 million which brought the company’s valuation to $1 billion (N360 billion) – a unicorn status. At this valuation, it surpasses giant financial houses like Access bank (N327 billion), and UBA (N227 billion).

Unlike savings and investment platforms that people use for savings from time to time – hence mobile apps, mobile payment apps are used for the likes of utility bills, cash transfers, deposits, and withdrawals. Businesses use mobile payment platforms for transaction purposes. However, on play store, Interswitch still boasts of more than 100,000 downloads in its quickteller app and over 50,000 downloads in its quickteller agent app, which top other of its complementary payment apps for Nigeria and other African countries.

READ MORE: Digitization of the U.S Dollar faces U.S Senate hearing

Other major players in the payment platform in Nigeria include Flutterwave, Paystack, Remita, e-transact, Vogue Pay, among others.

Cryptocurrencies: Quidax

To many people, cryptocurrencies are still a mirage. As such, investing in any form of cryptocurrency would be considered a wasteful investment. In the Nigerian fintech ecosystem for cryptocurrencies, Quidax is helping cryptocurrency spreading the knowledge and raising awareness for cryptocurrencies, and helping enthusiasts and investors make crypto investments.

Launched in 2018, Quidax has made its platform seamless for trading different cryptocurrencies like Bitcoin, Ethereum, Ripple, Litecoin, and other cryptocurrencies using the naira. Its market approach of trading directly with naira and boycotting exchange rate variations is a major development in the crypto market. One year after it started, CEO Buchi Okoro said they saw a transaction volume of more than $110 million from users in 70 countries from 6 continents. On play store, it has over 10,000 downloads and is rated a 4.1 star.

Crowdfunding: NaijaFund

As an alternative to raising funds for personal and business projects like hospital bills, school fees, and the likes, crowdfunding platforms help users source funds from a sea of ‘strangers’ willing to spare some funds to help out. On the global scale, GoFundMe leads other crowdfunding platforms by ensuring a transparent system where people seeking financial assistance could present their ordeals and receive solidarity.

Although GoFundMe shares a strong presence in almost every country, it doesn’t deter other industry players from participating. In Nigeria, NaijaFund presents itself as one of the foremost indigenous crowdfunding platforms. Although mainly present as a web app, it has since its 2016 launch helped Nigerians bridge the funding gap for personal and business projects, in which it claims 10% of the total funds raised. 


Big Tech companies that include Google, Amazon, Facebook and Apple are aiming at financial services, which positively impact the growth of the FinTech market. The big tech firms keep introducing peripheral banking services to their current offerings, without going full-stack banking. For instance, Facebook, the social media firm wanted to introduce a digital currency that makes global payments cheaper and faster, called Libra. However, Facebook has lost many of its backers and faced stiff regulatory scrutiny in a federal privacy probe.  Apart from Libra, Facebook is also consolidating its payment products under a new brand called Facebook Pay. They will face competition from the similar payment apps such as Google Pay and Apple Pay in the US and Chinese payment apps such as Alipay and WeChat Pay. Therefore, big tech companies focusing on financial services are expected to positively impact the FinTech market’s growth.  

Major companies operating in the global fintech industry are: Corporate Card for Spend Management Platform: Air Canada, AirPlus International Ltd, American Express Company, Bank of America Corporation, Citigroup Inc, Diners Club International Ltd, East West Bank (East West Bancorp, Inc.), JP Morgan Chase & Co. Inc, Mastercard Incorporated, NIUM Pte. Ltd, The UPS Store, Inc, Tradeshift.

Spend Management/Spend Analytics Solutions Providers: Advanced, Airbase Inc, Ariba, Inc. (SAP SE), Brex Inc, Coupa Software Inc, GEP, Open Financial Technologies Pvt Ltd, Procurify, Ramp Business Corporation, Sage Intacct, Inc. (The Sage Group PLC), Sievo, SutiSoft, Inc, TOUCHSTONE GROUP PLC, VA Tech Ventures Pvt Limited (Happay).

These key market players are focusing on collaboration strategy with other market leaders to innovate and launch new products to meet the increasing needs and requirements of consumers


According to a World Bank report, only about 40% of adults in Nigeria have bank accounts. The question is, what happened to the remaining 60%? Why are they unbanked? Is it because financial services are not accessible? Perhaps that is an issue FinTech companies can unravel and solve. 

However, the sector is still relatively young as Nigeria, Africa’s largest economy with a population of 200 million happens to have 40% of her populace financially excluded. The Nigerian financial space offers significant opportunities for fintechs across the consumer spectrum, notably within the small and medium-sized enterprise (SME) and affluent segments and, increasingly, in the mass-market segment.

Although, banking in Nigeria has improved over the years. Competition amongst the individual banks has made for more improvements as the banks try to offer their customers the best service. However, bulk of banking service consumers in Nigeria are underserved.  When you get to the rural areas, there is little or no access to services.  Some other citizens cannot access financial services like loans because of some certain policies and rules governing the banking sector.

All these and more are generating the gaps that FinTech companies in Nigeria now strive to fill by developing better financial tools and services for the masses.

 Currently, there are more than 200 FinTech companies in Nigeria. Below is a list of top 10 best FinTech companies in the Nigerian financial space in no particular order:

From 2014 to 2019, the FinTech industry in Nigeria generated more than $600 million in funding. Some of these Nigerian FinTech company offers customized Mastercard ATM card with no transfer fees or ATM maintenance fees as well as free deposits. 


PayStack was established in 2015 by Shola Akinlade and Ezra Olubi. It makes payment processes consistent for both consumers and the businesses they are attempting to pay.


Paga was founded in 2009 by Tayo Oviosu but launched in 2011. Through Paga, you can pay bills, make bank deposits and even pay in certain stores. It acts as a mobile wallet where customers perform transactions on their mobile devices.


Carbon, formerly known as Paylater, is owned by One Finance and was founded in 2016. It is a loan app which gives short loans through its mobile app. Use of mobile phones to obtain loans makes the process faster and easier.


Remita set the pace for fintech companies in Nigeria as it was developed by system specs in 1991 by John Obaro. It assists SMEs, multinationals, state governments, government agencies, NGOs, educational institutions and individuals to receive and make payments electronically. 


VoguePay was established in 2012, it is accessible to local consumers with a simple and minimal effort platform as its principal selling point.


OPay is owned by Opera. It entered the fintech market in August after acquiring a controlling stake in PayCom. It was founded by Telnet Nigeria.


Kudi Money was rebranded to Kuda Bank. It was founded in 2017 by Babatunde Ogundeyi. It performs similar functions to other fintech companies. The start-up raised $1.6 million in 2019.


It was originally known as Piggybank.ng, before it became PiggyVest. It allows debit cardholders to save little amounts of money frequently with minimal effort. It automates the process of saving tiny amounts daily, weekly, or monthly. It was founded in February 2016 by Ayo Akinola, Joshua Chibueze, Nonso Eagle, Odunayo Eweniyi, and Somto Ifezue.


This is a mobile banking platform that gives loans and credits. It was founded in 2017. It has a team of people across Paris, France, and Lagos, Nigeria.

Chipper Cash

Chipper Cash was founded in 2017 by Ham Serunjogi and Maijid Moujaled and it is headquartered in San Francisco, California. It enables free instant cross-border mobile money transfers in Africa as easy as sending a text message.


The Central Bank of Nigeria, the Nigerian Deposit Insurance Corporation (NDIC), Security and Exchange Commissions (SEC), National Insurance Commission (NAICOM), Nigerian Communication Commission (NCC), and National Information Technology Development Agency (NITDA) are the regulators of these companies.


The NDIC is responsible for ensuring all deposit liabilities of licensed banks and other deposit-receiving financial institutions in Nigeria. Fintech companies that are in the business of obtaining and saving money deposited by Nigerian consumers such as PSBs must be registered with the NDIC, pursuant to section 15 of the NDIC Act, 2006.


Since the primary role of the CBN is to regulate financial services in Nigeria and financial institutions by virtue of the Banks and other Financial Institutions Act, 1991 (“BOFIA”). Before fintech companies offer financial services to consumers, they must obtain the necessary licenses and comply with the CBN’s applicable guidelines.


The FinTech industry in Nigeria is very promising as it is still booming. Despite the many challenges especially around policies,  these few companies have been able to harness the technological opportunities in the financial service industry; equally, there are still many available opportunities and new areas to dive into within the industry. 

Looking to invest or develop a venture? Talk to our venture development: ventures@equilibriumzone.org

Technology is changing the landscape of the financial sector, increasing access to financial services in profound ways. These changes have been in motion for several years, affecting nearly all countries in the world. Technology has created new opportunities for digital financial services to accelerate and enhance innovations in the financial deal of people.

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