Nigeria-based credit-led digital banking platform FairMoney has acquired PayForce (sub-brand of YC-backed CrowdForce), a merchant payment services that serves small businesses. Through this move FairMoney looks to broaden its financial services proposition to merchants.

The details of the deal were not disclosed. However, it is estimated that the transaction was a cash-and-stock deal in the range of USD 15 million to USD 20 million. While FairMoney has predominantly operated a credit-led neobanking play targeting retail customers, CrowdForce, through PayForce, provides agency banking services, a branchless banking model that extends financial services to the last mile via a network of human ATMs.

However, several iterations, competition-induced innovation and raising venture capital have pushed both businesses to evolve from their flagship products to a plethora of offerings as the digital retail and merchant banking space intensifies. PayForce launched with providing merchants with POS devices and allowing them to offer cash-in, cash-out, transfer and bill payments to retail customers while supplying liquidity via a network of partners. The fintech, which serves over 10,000 businesses, has buffed up its product suite to include business banking, finance team tools, B2B payments and virtual cards.

It raised a USD 3. 6 million pre-Series A in February 2022. FairMoney, on the other hand, started with a digital lending product that covers loans from 15 days to 24 months to mainly retail customers.

The company, which secured a USD 42 million Series B in 2021, now provides debit accounts and cards, P2P transfers, and payments to over a million retail customers and small businesses, which have become a big part of its business. A couple of steps further The acquisition should provide incentives for PayForce-acquired merchants who use FairMoney as their primary bank, such as an 18% annual return on deposits. FairMoney wants to design specific credit products for different sets of businesses, tackling one of the biggest problems facing small businesses in Nigeria: access to loans and working capital.

Also, it’s not farfetched to think that FairMoney might look to bank some of the offline customers that CrowdForce has served over the years. As consumer digital banking startups such as FairMoney and Kuda delve into business banking, fintechs on the other side of the board, including OPay and Moniepoint, are acquiring retail customers. However, the transition hasn’t been smooth for most of these players because of the varying banking needs of different customer profiles on one app.

FairMoney will be hoping that PayForce — which helps small businesses tackle several pain points and allows them to understand their finances better and make more revenue through its product — provides it a merchant-focused value proposition that bolsters its position in the country’s business banking space. Indeed, FairMoney, via the acquisition, wants to obtain more market share and become the number one retail and merchant bank in Nigeria. The fintech intends to add credit cards, remittance, stock, and investment products for its retail customers — and include payroll services, BNPL, and online merchant acquiring into its business-facing product suite.

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