How OPay Makes Money in Nigeria: Business Model Explained

The primary source of revenue for any high-volume payments platform is transaction fees. OPay earns a small fee on most of the transactions processed through its infrastructure. For cash withdrawals at OPay agent points, the fee is shared between OPay and the agent. For merchant payments, OPay charges the merchant a small percentage of each transaction, which is an interchange or merchant discount rate. For transfers between OPay wallets and bank accounts, fees may apply depending on the transaction type and amount.

At OPay’s scale, with tens of millions of registered users and an extensive agent network, even a fee of N20 to N50 per transaction across millions of daily transactions generates substantial revenue. Volume is the core logic of the model: the platform earns small amounts from each of a very large number of transactions.

When users load money into their OPay wallets, those funds sit in OPay’s pooled accounts at licensed banks while they are waiting to be used or withdrawn. The aggregate balance held across all OPay wallets at any given time represents a substantial sum. OPay earns interest or investment returns on this float by depositing the pooled funds with banks or placing them in short-term instruments. This is the same mechanism that drives revenue for telcos operating mobile money platforms globally.

Float income is relatively invisible to customers, since users neither pay it directly nor see it deducted from their balances, but it is a significant contributor to the platform’s economics, particularly as the total wallet balances held on the platform grow with the user base.

OPay operates one of Nigeria’s largest agent banking networks, with hundreds of thousands of registered agents who process cash-in and cash-out transactions for customers across the country. Agents earn commissions on each transaction they process, but OPay sets the commission structure. The difference between the fee the customer or merchant pays and the commission passed to the agent flows to OPay as network revenue. Agents also pay for POS terminal maintenance, branding materials and in some cases SIM data, all of which contribute to the platform’s revenue.

OPay has expanded beyond payments into financial products including credit. Through partnerships and its own product development, OPay has offered short-term loans to qualifying users. Lending revenue comes from interest charged on those loans. The data advantage OPay holds from its transaction history, which shows income patterns, spending behaviour and reliability of cash flows for its customers, makes it possible to assess creditworthiness for users who lack formal collateral or a traditional credit history.

As OPay continues to build out its financial services range, the lending and broader financial products component of its revenue is expected to grow. This follows the typical trajectory of fintech platforms globally, which often begin with payments infrastructure and graduate to more margin-rich financial products once a large and active user base is established.

OPay has offered business account tiers and merchant tools that carry subscription fees or tiered pricing for access to advanced features. Businesses that use OPay as their primary payment infrastructure may pay for features including invoicing, inventory management, payroll integration or reporting tools. These subscription components add a recurring revenue layer on top of the transaction-based income.

A large payments platform generates commercially valuable data about consumer spending patterns, geographic cash flow trends and merchant performance. OPay can monetise aggregated, anonymised versions of this data through partnerships with banks, lenders, insurers and brands that want to understand Nigerian consumer behaviour. It can also use this data internally to price its own credit products more accurately and to target promotional offers within the app.

The common thread across OPay’s revenue streams is that they all grow with the number of active users and the volume of transactions on the platform. The business does not require proportionally more infrastructure for each additional user, once the core platform is built. This is the network-effects logic that drives valuations in the fintech sector and explains why investors backed OPay at a valuation that reached over one billion US dollars in its 2024 funding round.

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Recommend Story 0 Share: About the author Vangawa Bolgent Editor-in-Chief Abuja, Nigeria

Vangawa Bolgent Editor-in-Chief & Journalist | The Gazette News Nigeria Vangawa Bolgent is a Nigerian journalist, editor, and human-centred storyteller with more than a decade… Read full bio →

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