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Home African

PalmPay and CashAfrica Partner on African Payment Solutions

Mololuwa Adedeji by Mololuwa Adedeji
February 28, 2025
in African, Fintech
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Although the digital payments ecosystem in Nigeria has grown quickly, contactless payments are still not widely used, in contrast to places like China and Europe. However, a recent project spearheaded by CashAfrica and PalmPay may signal a substantial move away from bank transfers, PIN-based card payments, and cash in favour of tap-to-pay transactions.

The partnership aims to streamline digital payments by enabling wearables, mobile wallets, and debit and credit cards to process transactions through PalmPay’s network. Prior to a nationwide rollout in March, PalmPay is implementing 1,000 contactless-enabled point-of-sale (POS) terminals powered by CashAfrica’s Near Field Communication (NFC) technology in a pilot phase.

Over the past five years, fintech companies including OPay, Moniepoint, Paga, and FirstMonie have significantly changed the payments scene in Nigeria. These companies invested millions in infrastructure and client education to promote digital payments, initially via agent banking and then via cards and smartphones. However, due to fees imposed by foreign card networks, traditional card payments continue to be costly, and the expansion of agent banking has plateaued. Even if they are becoming more popular, “pay with bank” choices still cause a lot of friction.

Contactless payments, which are quicker, more frictionless, and possibly more affordable, appear to be the next big thing, according to industry participants.

CashAfrica will supply PalmPay with its contactless infrastructure, charging fees based on API calls and guaranteeing smooth, real-time transaction processing. PalmPay will expand contactless capabilities across its 300,000+ point-of-sale terminals nationally if the pilot phase is successful, setting the stage for tap-to-pay to become widely used in Nigeria in the future.   

Over the last five years, Nigeria’s financial ecosystem has seen substantial change, driven by fintech companies like OPay, Moniepoint, Paga, and FirstMonie that facilitate digital adoption through card-based transactions, smartphone apps, and agent banking. But the hefty transaction costs associated with standard card payments and the inconvenience of “pay with bank” choices underscore the need for quicker and more affordable alternatives.

CashAfrica is also in talks with Zenith Bank, UBA, and Sterling Bank to incorporate contactless payments into their POS infrastructure and banking apps, but the main obstacles to adoption are still merchant education and incentives. PalmPay has not yet revealed its merchant training plan, but industry watchers point out that adoption will need a significant push in awareness and incentives.

Tokenization, encryption, and session expiration will be implemented at the API level by PalmPay and CashAfrica to ensure transaction security.

Fintechs pushed mobile apps, bank transfers, and even QR codes in an effort to discourage Nigerians from using cash for years. However, as they get closer to winning, the next challenge is already here: how to make digital payments more efficient, seamless, and almost undetectable. The largest obstacle for Nigerian payments, if PalmPay and CashAfrica are successful, will not be adoption but rather recalling the last time you entered a PIN.

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Mololuwa Adedeji

Mololuwa Adedeji

Mololuwa likes to think of herself as a curious mind who is always drawn to deep conversations. A true sapio, that finds joy in good books, good food, and psychological thrillers. She likes to think of herself as a happy person who finds meaning in every moment.

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