Source: Techpoint

In a significant development in Nigeria’s fintech landscape, blockchain payments platform, Bitmama Inc. has confirmed the acquisition of Payday, a virtual card service provider.

The news comes barely nine months after Payday announced its $3 million seed round and three months after its exploration of sale options was confirmed. Facilitated through Bitmama’s cross-border payments product Changera, the acquisition marks a pivotal shift from earlier speculations, including a potential acquisition by lead investor, Moniepoint. Changera is set to consolidate its blockchain payment platform by acquiring 100% of Payday’s customer base.

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A source close to the matter, who declined confirming the financial terms of the deal, revealed to Techpoint Africa that acquisition conversations were initiated just a few weeks ago, and the process is “about 85% complete.” Another source claims that it is an all-stock deal valued at “millions of dollars.”

Changera, launched in 2021, is set to absorb a number of Payday’s key personnel across various departments, including marketing, customer service, and engineering. This integration is already underway, with some Payday employees already transitioning to Changera. As a founder with a strong technical background, Payday CEO Favour Ori’s integration into Bitmama’s team is not yet confirmed. However, given Bitmama’s already established leadership and robust technical team, it appears more likely that he may step away.

For the over 300,000 customers previously reported by Payday, who will now be under Changera’s care, there will be hopefully no noticeable changes.

According to a senior member of Bitama’s management, Payday’s brand will continue to operate but it will now fall under the broader umbrella of Changera, supported by its stablecoin infrastructure. This integration is expected to overcome the liabilities and challenges Payday faced due to its dependence on third-party integrations, thereby potentially improving both customer experience and service reliability.

The self-proclaimed neobank of the gig economy had previously grappled with operational challenges, including industry-wide charge-back fraud issues, a notable disruption in Mastercard services, and the exit of senior team members in July 2023.

For Changera customers, the acquisition promises to expand the range of available services, providing access to Payday’s digital payment solutions.

In the short term, there are no planned changes to the fee structures or terms of service for Payday customers. However, as the integration progresses, customers can anticipate an expanded suite of services and potentially new features that leverage the combined strengths of Bitmama and Payday.

Post-acquisition, Bitmama is poised to embark on an ambitious roadmap. Central to this roadmap is the development of a new solution aimed at enhancing FX transactions for African businesses. Slated for launch in Q1 2024, this solution is expected to address a critical need in the market, facilitating smoother and more efficient B2B cross-border financial interactions.

The acquisition of Payday by Bitmama mirrors a broader trend of strategic consolidations within the fintech industry. It comes in the wake of similar acquisitions, such as that of Chaka by Risevest in September 2023. This consolidation trend suggests an emerging pattern where fintech companies are increasingly seeking strategic partnerships and acquisitions to overcome market challenges and scale operations.

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Source: Techpoint