Palmpay, the Nigerian fintech platform, has formed a strategic partnership with Jumia, allowing Palmpay customers to purchase products on Jumia directly from their accounts. This collaboration highlights the growing trend among Nigerian fintechs to offer robust pay-by-bank solutions. According to the Central Bank of Nigeria, internet transfers made up 51.91% of all e-payment transactions in the first half of 2024.
“Apart from Jumia, we have over a hundred partners working on this online payment solution,” said a Palmpay spokesperson during a press briefing on Wednesday. The fintech is focused on creating payment options for its 35 million users, with bank transfers remaining a preferred method. In 2023 alone, transfers accounted for 45% of all online retail payments.
The partnership follows Jumia’s recruitment of Anthony Mbagwu—formerly of Palmpay—to lead JumiaPay’s operations in Nigeria. Jumia’s 2023 filings also identified Palmpay as one of its main competitors in the fintech landscape. Sunil Natraj, CEO of Jumia Nigeria, emphasized the benefits: “By integrating PalmPay, we’re offering customers more ways to access affordable and quality products while enjoying cashless transactions.”
For Palmpay, teaming up with Jumia—an e-commerce giant that saw an 18% increase in orders during its month-long Black Friday campaign—is a chance to enhance payment margins. Direct account payments bypass fees typically charged by card processors like Verve.
Since its launch in Nigeria in 2019 with funding from Transsion Holdings’ $40 million seed round, Palmpay gained prominence in 2023 during a cash crunch that drove Nigerians towards fintech solutions as traditional banks struggled to meet the growing demand for online transactions.
“This strategic partnership perfectly aligns with our mission to offer a superior user experience and provide exceptional value to our customers,” said Sofia Zab, Palmpay’s Chief Marketing Officer.
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