In just 17 years since Nigerian engineer and entrepreneur Mitchell Elegbe founded Interswitch in 2002 with a mission to “connect Nigeria to the digital world”, the company has grown drastically to become one of Africa’s leading digital-payments providers, processing at least $38 billion in transactions value in 2017 alone.
Today, Nigerian consumers and businesses make more than 300 million digital transactions every month across a suite of Interswitch-enabled channels.
In partnership with two leading private equity firms, US-based TA Associates and UK-based Helios, Interswitch plans to list on the Lagos and London stock exchanges this year and is expected to raise as much as $1 billion in its initial public offering.
Elegbe’s story began with an observation. Up until 2002, Nigerians were carrying piles of cash with them to pay for everything from groceries, cell phones to cars.
Back then, debit and credit cards were scarce as were point-of-sale (POS) machines. ATMs were also few and far between and each could be used only by customers of one bank as Nigeria lacked the infrastructure for interbank connectivity.
As a result, people spent hours in banking halls queuing for cash, or simply kept cash at home.
Elegbe saw the unmet need and launched Interswitch to close the gap.
The company built the first interbank transaction switching and payment processing infrastructure in Nigeria, which enabled interbank sharing and the first real-time POS system.
Interswitch Paydirect platform revolutionized revenue collection for governments and large companies while its online payment gateway, Webpay, opened the way for e-commerce in Nigeria.
In 2008, Interswitch launched Verve, which has become Nigeria’s most widely used card brand.
The next year in 2009, the company introduced Quickteller, an online payment platform that is accessible via a wide variety of digital and physical channels. As of today, the platform has more than 15 million users.
Interswitch’s recent innovation is Paycode, which enables cardless transactions such as ATM withdrawals and POS payments, using a digital token.
The company is also helping process contactless payments in Africa, and is upgrading the system to allow consumers to scan “quick response” barcodes from their cellphones.
But Interswitch is not done yet. In 2017, the company unveiled a solid five-year strategy to broaden its service offering both to businesses and consumers, and to expand its footprint in African countries beyond Nigeria.
One of the bold visions is to buils Interswitch’s financial inclusion business, which will.help banks, merchants, and mobile networks deliver digital-payment services to Africans who do not have bank accounts.
In Nigeria one, an estimated 55 million adults, more than half the total, do not have bank account.
There seems to be plenty of rooms for other companies, including American companies to tap into that particular business.
As the continent’s populations grow in size and spending power and large and small businesses multiply and expand, demand for digital solutions and infrastructure will continue to explode, predict the writers of the book “Africa’s business revolution”.