A Unicorn in the Making: VoguePay Is Making Payments Easier In Nigeria
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The challenge of making and receiving payments in Africa has been widely documented. The continent has the world’s highest remittance fees, and payments between different countries aren’t any easier.
You have to convert the local currency to the U.S dollar and then convert to the currency of the country where you are making the payment. Predictably, the only winners in this process are the payment processors. This has continued to inhibit trade between the 54 countries.
One startup has taken upon itself to solve this challenge. VoguePay is an online payments processor that has singlehandedly changed the payments landscape. Founded in 2012, the startup has continued to onboard thousands of clients, with an easy and low-cost platform as its main selling point.
In its first year, VoguePay brought in 17,000 users, most of whom were from its homeland of Nigeria. One of its biggest selling points was free integration for the merchants.
Back then, there were very few payment processors in Nigeria, and they would charge a hefty fee for their services. In time, the client base has grown to tens of millions of users from five continents. It currently serves over 100,000 small and medium-sized enterprises (SMEs), processing over a million dollars daily.
A Startup with a Difference
For most startups, the first step is to develop a working prototype of their product. Armed with this, the founders then shop around for a venture capitalist or an angel investor to help them develop the product.
But VoguePay took a different route, explained digital media head Oluwole Ogunlade, in an interview with Crypto Briefing.
Despite its great success, VoguePay hasn’t raised any money from venture capitalists. Instead, the founder, Michael Simeon, used his own savings to fund the development of the platform. He also enlisted the help of four of his friends, one of whom was a computer programmer. For a full year, the five founders worked without getting any payment, surviving on their savings.
The first approach for the startup was ease of use. At the time, the existing payment services were not only costly, but they were also not available for some platforms. VoguePay’s plugins catered to Drupal, Woocommerce, Magento and all the other payments platforms.
The Interpol Blockchain Initiative
One of VoguePay’s biggest projects yet has been with the International Criminal Police Organization, otherwise known as Interpol. Early last year, VoguePay executives met with Interpol, and an initiative was born.
The two organizations developed a blockchain-based action and information portal for crime control. Named interPort, the platform gives Interpol the ability to manage its stakeholder engagement as well as crime reporting. It also makes it easier to partner with and collect information from citizens.
In a press release, the head of Interpol in Nigeria, Olushola K. Subair, praised the new initiative. According to him, the partnership will help Interpol to “increase the safety of Nigerians and to protect the economy while enabling citizens and businesses to comfortably embrace available technologies to grow their businesses, increase their profits and create more jobs.”
According to Oluwole, having a single version of truth is what led the two organizations to developing a blockchain platform. Interpol will now be better positioned to “offer cross-agency data and biometric collaboration with its key partners in Nigeria with a single version of the truth.”
And while VoguePay has thrived with its current product offerings, it’s not stopping there. It is now working on a digital banking platform as well as a blockchain-based financial history and credit rating system. In its first initiative, VoguePay is providing plugins to help 10 of the largest banks in the continent digitize their operations.
This approach gives the startup a bigger user base than it would have by building from the ground up. In its first project with an undisclosed bank, its platform will gain access to over ten million clients.
VoguePay is also working on a financial history and credit rating system. In Africa, a vast majority of financial transactions are conducted in cash. This excludes many people from having a financial history, despite being very active financially.
VoguePay is striving to solve this issue and make it easier for Africans to access credit based on their payment history.
The company’s efforts haven’t gone unnoticed. In December last year, VoguePay won the award for the global leading premium online payment solution provider at the World Quality Day. It was also named the best fintech startup at the Cashless Africa Expo. The CEO, Michael Simeon, was named the Payment Personality Leader of the year at African Prize for Leadership Awards.
These awards, supported by Forbes and the African Union, are a sign that the startup is making an impact, Oluwole believes.
Cryptos Will Take Over
VoguePay has been supporting merchants who accept bitcoin payments as well. With the digital currency increasing in popularity in Africa, some merchants began accepting it as payment, and VoguePay was quick to adapt.
However, with the volatility of the bitcoin price, the company disabled this feature for new users. Regardless, Oluwole believes that it’s only a matter of time before cryptos take over. They are a better mode of money transfer than most of the legacy systems, he says.
Cryptocurrencies still have a long way to go before they become widely used as a payment method. Currently, most crypto users look at it as a speculative commodity. They are in it to make a profit, and this derails its use as a payment method.
With some banks turning to cryptos for remittances however, it’s only a matter of time before everyone catches up.
Evolving, not Overhauling
In the fintech industry, there’s a common view that the legacy systems need an overhaul. Remittance services are out to gut SWIFT; cryptos are out to take down banks and so on. This approach is misguided, Oluwole believes.
We need to integrate the new innovations with the legacy systems and help them evolve, he told Crypto Briefing. This is why VoguePay works with banks to help them digitize their services, giving the startup access to a huge user base on which it would otherwise have missed out.
“Collaboration will create way more value than destruction,” Oluwole said. “The old systems should go, but there are many benefits that we will miss out on if we do a complete overhaul.”
The author is not invested in any digital asset mentioned in this article.