Nigerian Fintech Kippa Closes Payments Product, Faces Employee Layoffs

Fintech firm Kippa is poised to discontinue its offline payment solution, KippaPay, a versatile payment platform that facilitates the sending and receiving of payments from clients and extends to various payment transactions. This decision will inevitably result in the departure of employees who are responsible for overseeing the product. While the exact number of staff members facing layoffs has not been disclosed, the company has made it clear that the core KippaPay team will bid farewell by the end of December.

Kennedy Ekezie, the founder and CEO of Kippa, expressed the challenging nature of this decision, considering the remarkable dedication and effort invested by the team. He also alluded to the fact that the choice to shut down the product was primarily driven by concerns related to profitability.

The official announcement of this product’s withdrawal from the market was made through a statement issued by Ekezie on a Wednesday. In his statement, he explained the rationale behind this crucial move:

“Today, we announce that we’re pulling back our offline payments product: KippaPay from the market. Over the past 18 months, we launched and grew this arm of our product suite to support merchants with offline payments and agency banking through our POS terminals. This company decision is related to profitable product portfolio consolidation. This decision unfortunately means that the core of our team supporting the KippaPay product will be leaving us in December 2023. This has been an incredibly difficult decision for us to make, but we are incredibly proud of the work this team has done, and the impact KippaPay has had on our merchants. Starting November 15th, our KippaPay product will no longer be available for use by merchants. In the weeks leading up to this, we will provide support for our merchants and partners helping them transition off the product and resolve any pending settlements.”

For those unfamiliar with Kippa and its journey, the company is a financial management and payments platform that primarily serves small businesses in Nigeria. It was established in June 2021 and rapidly garnered attention within the fintech industry. In November of the same year, Kippa secured an impressive $3.2 million in pre-seed funding, signaling its potential for growth and innovation.

In September 2022, the fintech startup further solidified its position by raising an additional $8.4 million in a new financing round, bringing its total funding to an impressive $11.6 million. These substantial investments were a testament to the confidence investors had in Kippa’s vision and capabilities.

One of Kippa’s significant milestones was the launch of KippaPay, its digital payments solution introduced in April 2022. This offering was designed to empower small and medium-sized enterprises (SMEs) across Africa, allowing them to send and receive payments seamlessly within the Kippa app. The introduction of KippaPay was a strategic move to enhance the convenience and efficiency of financial transactions for these businesses.

Five months after the launch of KippaPay, the Central Bank of Nigeria recognized Kippa’s potential and granted the company a Payment Solutions Services License to Operate as a Super-Agent. This development was pivotal as it placed Kippa on par with established agency banking leaders such as OPay and Moniepoint. The license gave the Nigerian fintech startup the authority to distribute POS terminals to its vast network of over 500,000 merchants across all 774 local governments in the country.

This authorization enabled these merchants to operate as agents, offering a range of financial services to their customers. These services encompassed cash withdrawals and deposits, bank account openings, and the facilitation of bill and utility payments. Kippa’s mission was to empower these local businesses and communities by providing them with the tools and resources to offer essential financial services to their customers, thereby promoting financial inclusion on a broader scale.

However, despite the promising beginnings and the positive impact KippaPay had on local merchants, the company now finds itself at a crossroads, with the difficult decision to discontinue this product. The move reflects the evolving nature of the fintech industry, where adaptability and profitability are paramount. While the discontinuation of KippaPay may come as a disappointment to its users and supporters, it underscores the company’s commitment to a streamlined, profitable product portfolio.

The decision to discontinue a product is a challenging one for any company, especially when it involves the departure of a dedicated team of professionals. Kennedy Ekezie’s acknowledgment of the KippaPay team’s invaluable contribution is a testament to the dedication and hard work that went into making the product a reality. The impact that KippaPay had on local merchants cannot be understated, as it empowered them to offer critical financial services to their communities.

As Kippa proceeds with this strategic shift, it is important to recognize that the world of fintech is constantly evolving. Companies must continuously assess their product offerings to ensure they align with market demands and profitability goals. The decision to discontinue KippaPay represents a calculated move to enhance the company’s focus and profitability, and it will be fascinating to see how Kippa’s future endeavors unfold.

In conclusion, the discontinuation of Kippa’s offline payment product, KippaPay, marks a significant development in the company’s journey. While it may come as a surprise to some, it reflects the dynamic nature of the fintech industry, where adaptability and profitability are paramount. Kippa’s decision to streamline its product portfolio is a strategic move to ensure long-term sustainability and growth. As the core team behind KippaPay transitions out, the company remains committed to supporting its merchants and partners during this transition. The fintech industry is ever-changing, and Kippa’s decision serves as a reminder of the importance of aligning product offerings with evolving market dynamics. Kippa’s journey continues, and its future endeavors will undoubtedly be watched with great interest.