Flutterwave, Africa’s biggest FinTech firm has launched Swap, a new product that will digitise the process of getting foreign exchange for Nigerians with the backing of the Central Bank of Nigeria.
The fintech is leveraging a partnership with Wema Bank, a commercial bank, and Kadavra BDC, a bureau de change (BDC), to provide liquidity and foreign exchange for the product.
Mr Folashodun Shonubi, the acting governor of the CBN, told reporters at a press conference last week that Swap could solve two major problems facing Nigeria’s foreign exchange market: the lack of collaboration between institutions and the dependence on cash.
“No new licenses were issued, and we believe (Swap) will help moderate the rates for the BDCs and at the same time differentiate BDCs from black market transactions,” Shonubi said. Flutterwave will leverage its International Money Transfer Operator license from the CBN to bring in the foreign currency, Kadavra will use its BDC license to sell it, and Wema Bank will support the entire process.
Shonubi added that BDCs that refuse to go digital would be phased out of the system as the CBN tries to make the FX market cashless. “This helps us to differentiate between what is a regulated market, which is a BDC, as opposed to the ones which the central bank does not regulate.” He shared that the apex bank would monitor all transactions on Swap and unregulated foreign transactions would stop “because of what we’re doing here today.”
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The launch of Swap comes a week after the CBN acting governor said the apex bank would clear all FX backlogs within two weeks. While previous attempts to clear the backlog, such as a publicised $3billion AFREXIM loan, have not yielded any results, CBN is keeping its new plans to clear years’ worth of FX backlog close to its chest. A failure to clear these backlogs will keep significant demand flowing to the parallel market and limit the CBN’s ability to offer price stability.
“We understand the FX access challenges individuals and businesses face. Swap is our answer to those pain points, providing a seamless and efficient platform for currency exchange,” said Olugbenga Agboola, the CEO and co-founder of Flutterwave.
Swap is only available on Flutterwave’s web app and for registered Nigerian users. Users can only access dollars, euros, and pounds with the product. Flutterwave will also issue cards from October for Nigerians who require swift access to Personal Travel Allowance (PTA) and Business Travel Allowance (BTA).
Users must pass multiple identity verification phases and submit documentation online before accessing Swap. They would have to submit their bank verification number, a selfie, the reason they want to get FX, and documentation to support their reason. After submitting all the required information, users can input the account numbers they want the money deposited into and get it instantly. Swap will also be available via API for banks.
