Tayo Oviosu solving problems with Paga

by on Apr 7, 2017 - 9 min read
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Media Credit: http://guardian.ng/business-services/tayo-oviosu/

This article oringally appeared on Guardian

The idea was born eight years ago, when Tayo founded Pagatech Limited, and became its Chief Executive Officer. With Bachelors of Science degree in Electrical Engineering, cum laude, from the University of Southern California, and a Masters in Business Administration from the Graduate School of Business, Stanford University in his kitty, all that he needed was time and space to explode such that bank customers, instead of sending it, say: Paga it!

Success didn’t come overnight, as he also brought to bear his experiences from previous work places including Deloitte Consulting, and Cisco Systems in San Jose California, to live his philosophy of going fast alone, but to go farther with people. In this online interview, Tayo tells ADEYEMI ADEPETUN, how it all started.

Can we get to know more about Paga viz-a-viz when the operation started, how it works, competition and level of investments?
I founded Paga in 2009 out of the frustration of carrying cash around. Regardless of the fact that I had multiple bank accounts, I was unable to use my cards conveniently when I wanted. I soon realised that a lot of Nigerians do not own bank accounts and the problem was much worse for them. I embarked on a journey with Paga to solve two problems. First, is making it easy for people to pay and get paid, no matter if they are an individual or business, banked or unbanked. And the second, delivering financial services to the mass market. This week marked eight years on this journey, and our mission at Paga still stands – to transform lives by delivering innovative and universal access to financial services. We think about the market in a broad and holistic way – our services are for everyone – banked or unbanked and businesses of all sizes.

In November of 2011, we received our full operating license from the Central Bank of Nigeria (CBN). We then had to raise financing and closed on our Series A financing in June 2012. Thus, we technically have been in the market properly for four years. In these four years, we have become the leading mobile payments company, and have succeeded in building the largest distribution network for financial services in Nigeria through our network of agents.

Our Agent network, which is the first pillar of our business, comprises 11,000 entrepreneurs ranging from pharmacies, mom-and-pop shops, and grocery stores that act as a place in the community that conducts transactions for customers and holds a great deal of trust. This way, an individual is able to visit an agent close to their home or office to send money, deposit into any bank, pay all their bills, and soon open savings accounts and get access to loans. Customers can send money to others, and recipients do not even need their own Paga account to access it. We have partnerships with 10 different banks, which allow customers use their ATM to collect their money without a card. In 2017, our goal is to grow our Agent Network to 15,000 and we have opened our agents to all financial institutions to come and use.

The second pillar of our business is our offering to individuals. Individuals can also use Paga by themselves by opening an account. This can be done on our website mypaga.com, Paga for Android, or *242#. When you open an account you get a wallet. You can have cash in the wallet, link your bank accounts, or save your debit cards for use on Paga or on any ecommerce site where payments are powered by Paga. You can also move money from any bank in Nigeria to Paga instantly – the same way you transfer to other banks from your online or Internet using your Paga account number.


The third pillar of our business is designed for businesses. We offer a suite of tools to help businesses conveniently collect and make payments. Online businesses can use our gateway to collect payments from anyone who has a Paga account, MasterCard, Visa, or Verve Card. SMEs who do not have development expertise can setup a Paga Payme page in less than five minutes – they get their own URL, list their products, and can also collect payments from anyone. We also offer bulk payments, allowing businesses to use our platform to process payroll or any disbursement.

As you can see, Paga is a full-service payments and digital financial services provider. We have taken a holistic view to solving the problem of payments and access to finance and our strategy is paying off; today, we serve six million Nigerians, and have over 5,000 businesses using our platform.

Looking at the current economic situation, has it in any form impacted‎ Paga’s performances?
A lot of us will agree Nigeria is one of the hardest economies to get it right for a number of reasons. With the current economic situation, it has become even more difficult to do business in Nigeria due to the devaluation of the Naira. Our business is indirectly affected as the cost of everything has gone up. However, we are in the fastest period of growth we have experienced as a business. This suggests that economic activity within Nigeria continues.

People are seeing the value in using Paga to send money to others versus the inefficient ways they were using before. We are also seeing great growth in using Paga to deposit money into bank accounts and bill payments on our platform. We are connected to all major billers directly, and this gives our customers the confidence in our platform armed as well with the knowledge that if there is an issue, we will resolve it for them. I am hopeful the economic situation will improve and our growth will continue.


Looking at the mobile payment industry, only a few of the operators like Paga appear to have weathered the stormy business environment in Nigeria. How have you been doing it?
We are fortunate to have a great team of 200+ people and a fantastic group of investors all focused on our mission. This has allowed us to stay heads down and focused on our strategy. We are on a long journey and shortcuts won’t work. My favorite proverb is: “If you want to go fast, go alone; if you want to go far, go together” – At Paga, we want to go far. Thus, in everything we do we seek partnerships and long-term relationships that are mutually beneficial starting with our agents but also to our banking partners. Today, we are partnering with the banks and inviting them to come and leverage our agent network. We see mutual benefit to doing so and are excited about the discussions ongoing. We think our multi-stakeholder approach has been a key differentiator.

When you mulled the idea about eight years back, what gap did you plan on filling, and how did you get the financing to‎ begin?
We want to make it easy for all Nigerians to pay and get paid, and deliver financial services to the mass market. Only 38 per cent of Nigerian adults are banked. Those of us who are banked also do not have the most convenient ways to access payments or financial services. At Paga, we are solving these problems. The financing has not been easy to come around. We started with friends and family. Our first big break came when we were introduced to Tim Draper, a legendary venture capitalist out of Silicon Valley, who invested in our Seed Round. Paga was his first investment in Africa. Our second big break was meeting Alitheia Capital, who was the first institution to take a bet on Paga and invested in Paga twice ahead of our approval from the Central Bank. We now have six institutional investors, and have been very prudent with how we have built the business for sustainability.

Government Forex policy is affecting businesses, any impact on Paga? And aside from that what other challenges are impacting on your business?
The forex policy is affecting us because we raise funds internationally. Thus, even though we have doubled the business year over year for five years straight, in dollar terms it does not look that way. The other area it affects us is that our costs have gone up. Almost everything in Nigeria is imported in some fashion. This additional cost on the business is a huge burden.

Paga has crossed the six million customer mark, where are you now and how are you getting to those in the rural areas or is Paga just focused on the urban areas?
Serving six million unique customers is one of our greatest achievements this year, and it’s amazing because the year is still fresh and the opportunities are endless. We’ve reached a lot of Nigerians across the country through our digital platform and our Agent Network of over 11,000 entrepreneurs. We are offering services for everyone – urban or rural based. However, there is a significant cost to going to serve rural areas, and that is not a major part of our strategy today. That said, we have many of our agents choosing to open outlets in their villages and now 20 per cent of our agent outlets are in semi-urban or rural areas.


Let’s know you and your mode of relaxation after the hard work?
I’m a sport and fitness enthusiast and a huge Chelsea fan. Outside of work, I try to relax by watching football, running – I’ll be running my first marathon soon, and trying to read fiction though that is a struggle for me these days.

Any suggestions to government on getting the ICT sector moving better?
We need to take a long-term view. All engineering and technology courses at Universities need to be revamped, and funded to provide students world class education. Without doing this, we will always simply be patching things. The government needs to start investing in research as well. Combining this is creating policies that will make access to the Internet cheaper and more reliable. I am optimistic about the ICT sector and think what we are doing at Paga is baseline infrastructure that will spur a lot of economic growth in the ICT sector over time. ICT will be core to Nigeria becoming the Giant of Africa once again.

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