Onafriq shuts Baxi PoS network as costs, naira pressure bite

Onafriq has announced the closure of its Baxi agent banking business in Nigeria, citing economic and market pressures. The pan-African payments company said rising costs, naira depreciation, inflation and shrinking margins made the operation hard to sustain.

Baxi agents have been given 30 days to move their funds. Onafriq said it will keep other payment operations running in Nigeria.

What changed for Baxi

Onafriq acquired Capricorn Digital Limited, the operator of Baxi, in 2021. Baxi had built a network of more than 460,000 agents as of 2025. Those agents served customers who relied on PoS terminals for cash withdrawals, transfers, bill payments and other transactions.

The size of the network did not shield the business from financial pressure. Onafriq cited persistent inflation, naira depreciation, rising operating costs and increasing competition as factors that weakened the business.

The five pressure points

Running a large agent banking network requires spending on technology, infrastructure, staff and other operational activities. As these expenses rise, payment providers must earn enough from transactions to cover costs and stay profitable. For Onafriq, rising operating expenses contributed to the decision to discontinue Baxi's operations.

Inflation has raised the cost of doing business in Nigeria. For agent banking providers, higher expenses can reduce what is left from transaction fees and other revenue after operating costs are paid. Onafriq identified inflation as one of the economic challenges that weakened the commercial viability of its Nigerian agent banking business.

The depreciation of the naira was another factor. Currency weakness can raise the local-currency cost of technology, equipment and other expenses linked to foreign currencies. Combined with inflation and rising operational expenses, the weaker naira added to the difficulty of maintaining a profitable agent banking network.

Nigeria's PoS market has attracted more operators and agents, increasing competition for customers and transactions. As providers compete, transaction revenue may not rise enough to cover the cost of maintaining their networks. Onafriq said competition and shrinking margins had made its offline agent banking operations increasingly difficult to sustain.

The growing adoption of instant account-to-account transfers has also changed how Nigerians make payments. Customers can transfer money directly between bank accounts through digital banking channels without necessarily visiting a PoS agent. Onafriq said the shift towards these alternative payment methods had weakened offline payments and affected the economics of its agent banking business.

What agents and the market should watch

As part of the shutdown, Onafriq said Baxi agents had been transitioned to another principal bank and given 30 days to transfer their funds to their preferred principal bank. The company said its support teams would assist agents during the transition.

PoS terminals still serve customers who need cash withdrawals and other services, especially in areas with limited access to banking facilities. The value of PoS transactions in Nigeria surged to N18 trillion in 2024, an all-time yearly record, according to Nigeria Inter-Bank Settlement System data. That was a 69% increase from N10.7 trillion in 2023. The growth was driven by a prolonged cash shortage at ATMs and aggressive expansion of PoS deployments by fintech companies.

For the naira and Nigerian businesses, the Baxi exit shows that a large agent network alone does not guarantee profit when costs, currency pressure and competition collide.