Palmpay, the Nigerian fintech app, has entered into a strategic partnership with Jumia to allow Palmpay customers to pay for products on Jumia directly from their accounts.
The partnership comes as Nigerian fintechs continue to build payment methods on the pay-by-bank feature. According to data from the Central Bank of Nigeria, internet transfers accounted for 51.91% of total e-payment transactions in the first half of 2024.
“We have over a hundred partners that we’re working with for this online payment solution,” a Palmpay spokesperson said at a press conference on Wednesday. Palmpay is building these payment methods for its 35 million customers as bank transfers continue to represent an easy payment option for users. In 2023, transfers accounted for 45% of online retail payments.
The partnership comes five months after Jumia hired Anthony Mbagwu, an ex-Palmpay employee, to lead the Nigerian arm of its fintech, JumiaPay. According to Jumia’s 2023 filing, PalmPay is one of JumiaPay’s biggest competitors. “By integrating PalmPay, we are providing more options for customers to access affordable and quality goods with the convenience of cashless transactions,” Sunil Natraj, the CEO of Jumia Nigeria, said.
Partnering with Jumia, which recorded 2.6 million orders during its month-long Black Friday campaign—an 18% increase from 2023—offers the fintech an opportunity to boost its payment margins. By enabling customers to pay directly from their accounts, the fintech eliminates the fees charged by card processors like Verve for each transaction.
While Palmpay entered Nigeria in 2019, backed by a $40 million seed round from Transsion Holdings, it rose to prominence in 2023 when a cash crunch made Nigerians turn to fintechs as traditional banks struggled with the surge in online transactions.
“This strategic alliance aligns perfectly with our shared commitment to delivering a superior user experience and exceptional value to our customers,” said Sofia Zab, Palmpay’s chief marketing officer.
