According to Statista, the number of POS terminals in Nigeria grew from 150,000 to 543,000 in one year. As of May 2021, the volume of POS payments in the country had increased to more than 500 billion.
In Nigeria, POS terminals are used to process card payments at retail locations as well as for agency banking purposes, a branchless banking system where agents act like human ATMs. The majority of terminals operate online with a few having offline capabilities.
Lagos-based Zrosk Investment Management led the Series A round of funding for Lagos- and Helsinki-based ZirooPay. Existing investors Nordic venture fund Inventure returned with participation from other private and institutional funds.
Abiodun Ajai, the director of Sub-Saharan Africa of Bank of America, and a former Bureau chief at Bloomberg were among the individual investors who took part.
The company said that it will use the new capital to expand its payment infrastructure, accelerate growth and grow its team.
IroFit, the parent company of the company, pitched a mobile platform for small businesses when it was featured.
The CEO said the funds it raised would be used to launch in Nigeria. The firm launched in Lagos five years later. The company raised a further 2 million dollars, but the delay occurred because it was fine- tuning its technology and adding more capabilities.
After three years of operation, the pitch remains the same. Over 15,000 merchants use the company's POS terminals and mobile application. The company said that these merchants have processed $500 million in three years and 10 million transactions.
One of the biggest challenges to the mass adoption of card payments at retail locations is the rate of transaction failures due to poor internet connection.
The product was built around a major problem and can provide a 95 percent success rate against less than 50% in the market.
Functions are the next big pain point for POS terminals. Data from retail and agent interactions with customers is used by the payment processor and merchants. Merchants rely on platforms such as Kippa to digitize their processes since POS terminals don't have the ability to reconcile books.
Merchants who use the platform are being told not to look elsewhere. Small businesses can use its mobile application to perform similar tasks, such as tracking sales and managing business operations.
Think about everything that a cash register in a big supermarket can do; with an app on an mobile device, small businesses can do the same.
Over 70% of our users migrate from paper-based accounting to depend on in-app sales accounting within three months of starting.
Expansion of the product suite and the addition of additional payment channels and options will be aided by the growth funding. As POS providers in Nigeria increasingly focus on agency banking,ZirooPay fancies the possibility of dominating an open retail space.
No major company is coming in with modern technology trying to tackle this space and that's one area that we see an opportunity for us because we are primarily a retail payment platform. Even though we provide agency banking on the side, our focus is on retail, and that is something that differentiates us from the other players.
The growth in the online economy of the African continent has been remarkable, however, the offline economy is orders of magnitude larger than the online economy, according to the managing director and chief investment officer of Zrosk.
There is a patented technology advantage that works without an internet connection and a distribution model that increases the odds of digitizing the offline economy at a unit cost that makes the story particularly compelling. The payment space has become well-resourced and competitive, but the white space we see in the digitization of cash is the reason we are optimistic about the outlook for this investment.
IroFit Scores $600K Seed Round For “Internet-Free” Mobile Payment Tech Targeting Emerging Markets
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