Palmpay, a leading FinTech app in Nigeria, has entered into a strategic partnership with Jumia, enabling Palmpay customers to pay directly for products on the Jumia platform from their accounts. This collaboration aligns with the ongoing trend among Nigerian FinTechs to develop payment methods utilizing the pay-by-bank feature.
According to data from the Central Bank of Nigeria, internet transfers constituted 51.91% of total e-payment transactions in the first half of 2024. A Palmpay spokesperson highlighted at a press conference on Wednesday that the company is collaborating with over a hundred partners to enhance its online payment solutions. With a customer base of 35 million, Palmpay aims to facilitate seamless bank transfers, which accounted for 45% of online retail payments in 2023.
The partnership follows Jumia’s recent hiring of Anthony Mbagwu, a former Palmpay employee, to lead the Nigerian branch of its FinTech service, JumiaPay. According to Jumia’s 2023 filing, Palmpay is identified as one of JumiaPay’s primary competitors. Sunil Natraj, CEO of Jumia Nigeria, stated, “By integrating Palmpay, we are providing more options for customers to access affordable and quality goods with the convenience of cashless transactions.”
This collaboration presents Palmpay with a significant opportunity to enhance its payment margins. By allowing customers to pay directly from their accounts, the FinTech can avoid the fees typically charged by card processors, such as Verve, for each transaction.
Palmpay has been operating in Nigeria since 2019, initially supported by a $40 million seed funding round from Transsion Holdings. The FinTech gained substantial traction in 2023 as a result of a cash crunch that prompted Nigerians to turn to FinTech solutions amidst challenges faced by traditional banks in managing the increase in online transactions.
“This strategic alliance aligns perfectly with our shared commitment to delivering a superior user experience and exceptional value to our customers,” stated Sofia Zab, Palmpay’s Chief Marketing Officer.
The partnership between Palmpay and Jumia promises to streamline payment processes for consumers while enhancing the overall shopping experience, marking a significant step forward in the evolution of digital payments in Nigeria.
