Nigerian fintech Nomba has partnered with UK-based Volume to revolutionize cross-border payments for African businesses. This collaboration leverages Open Banking, allowing merchants to accept direct bank transfers in British Pounds from UK customers. The new payment corridor significantly reduces transaction fees and simplifies international commerce between the two nations.
Addressing Cross-Border Payment Challenges
Historically, Nigerian businesses faced substantial costs when selling to UK customers, often losing up to 7% of revenue to card processing fees. This "diaspora payment tax" created a significant barrier for small enterprises looking to tap into the lucrative UK market. The new system directly confronts these inefficiencies by bypassing traditional card networks.
Global card networks have long dominated the UK-Nigeria corridor, which sees significant trade volume annually. These intermediaries introduce layers of fees for processing, currency conversion, and cross-border surcharges. Nomba's solution provides a more direct and cost-effective channel for these important transactions.
A Seamless Open Banking Integration
The integration provides a streamlined payment experience for customers in the United Kingdom. At checkout, buyers simply select to pay via bank transfer and authorize the transaction directly from their own banking app. This process utilizes the UK's secure Faster Payments infrastructure for near-instantaneous fund movement.
For merchants, the process is equally efficient, as funds settle instantly into a dedicated GBP wallet provided by Nomba. This multi-currency wallet allows businesses to hold funds in pounds or convert them to other currencies. The system eliminates the delays and complexities associated with traditional international payment settlements.
Tangible Benefits for Nigerian Businesses
The most significant advantage for merchants is the dramatic reduction in transaction costs, which fall from over 6% to approximately 1%. This substantial saving allows businesses to retain more earnings and compete more effectively on a global scale. Early adopters are already reporting significant financial and operational benefits from the system.
Lagos-based BeautyByDaz Nigeria serves as a prime example, processing over £5,500 from UK customers in its first two months. Founder Zaynab Odusote highlighted the convenience of managing both local and international sales from a single dashboard. This unified approach simplifies accounting and provides a clearer overview of business performance.
Strategic Expansion and Future Vision
This partnership is a key component of Nomba's broader strategy to build global payment infrastructure for African businesses. The move follows recent expansions into the Democratic Republic of Congo and an acquisition of a Canadian payment service provider. These initiatives are designed to facilitate seamless trade between Africa and the world.
According to CEO Yinka Adewale, the ultimate goal is to make international transactions feel as simple as local ones. By leveraging technologies like Open Banking, Nomba aims to dismantle financial barriers for African entrepreneurs. This UK corridor positions the company for future expansion into other European markets.
The collaboration between Nomba and Volume marks a significant milestone for African e-commerce by addressing long-standing payment friction. By providing a cheaper, faster, and more transparent payment route, the partnership empowers Nigerian merchants to grow their international customer base. This initiative represents a crucial step toward a more equitable global financial landscape.