FairMoney targets POS terminals as lending tools, not payment devices

FairMoney Microfinance Bank has deployed about 100,000 Point-of-Sale terminals across Nigeria, but the lender says each device is designed to become a future lending opportunity rather than just a payment collection machine. The digital lender is prioritising quality over quantity, using transaction history to identify creditworthy businesses for informed lending decisions.

Strategy shift: from consumer loans to MSME lending

FairMoney initially built its reputation by providing unsecured consumer loans through its digital platform after launching in 2017. However, the company discovered that many borrowers were using those loans to finance their small businesses. Henry Obiekea, FairMoney Microfinance Bank Managing Director, explained: "A substantial number of customers that we had, that were taking loans, were utilising those loans for business activities."

That discovery prompted FairMoney to broaden its focus beyond consumer lending into serving micro, small and medium-sized enterprises (MSMEs). By combining payment processing with lending, the bank hopes to use merchants' transaction histories to offer faster, more accurate and less risky business loans.

No race for millions of terminals

Unlike competitors racing to dominate the merchant acquiring market with millions of devices, FairMoney says it has no ambition to flood the market. "We are not necessarily targeting like two million or three million or one million PoS terminals," Obiekea told TechCabal. Instead, the bank wants to build long-term relationships with merchants whose payment records provide valuable financial insights.

As digital payments become increasingly competitive and transaction fees continue to shrink, fintech companies are discovering that the real value lies in the customer data generated through daily transactions. For FairMoney, each POS terminal serves not only as a payment device but also as an underwriting tool that helps assess business performance and determine loan eligibility.

Nigeria's exploding POS ecosystem

Nigeria's POS ecosystem has expanded rapidly over the past two decades, transforming from a niche payment channel into one of the country's largest financial distribution networks. Industry data shows transaction values rose from ₦946.22 million in the first half of 2007 to ₦10.51 trillion in the first quarter of 2025.

That explosive growth has largely been driven by fintech giants such as Moniepoint, OPay, and PalmPay, which have aggressively expanded their merchant networks to process billions of naira in transactions every month. As of March 2025, Nigeria had more than 5.9 million active POS terminals, with both Moniepoint and OPay reporting over one million merchant terminals each.

While competitors view larger terminal deployments as a way to increase transaction volumes, boost fee income and expand market share, FairMoney believes payment data offers an even bigger opportunity by helping it build a stronger lending business.

What this means for Nigerian businesses and the naira

By turning every POS terminal into a gateway for future financing, FairMoney is betting that smaller merchants will gain easier access to working capital based on their actual sales performance rather than traditional credit checks. If successful, this model could reduce the reliance on informal lending and help more MSMEs grow. For the broader economy, better access to credit for small businesses supports job creation and domestic production, which can ease pressure on the naira by reducing demand for imported goods.