This partnership is aimed at bringing efficient online shopping experiences to both Palmpay users and Jumia customers. Jumia is one of the leading e-commerce companies in Nigeria and Palmpay is another leading mobile money operator in the country as well.
These prominent companies announced their partnership at PalmPay office located at Ikeja, Lagos Nigeria. The partnership further aids Palmpay’s goal of offering value to millions of Nigerians nationwide. With this partnership, Palmpay users can now pay for products on Jumia directly from their accounts.
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| Jumia and PalmPay securing a partnership deal |
This eliminates the need for credit/debit card. It also bypass the use of bank transfers that sometimes be funny when fund is debit but not received by the merchants. However, with the integration, customers can simply choose “Pay with PalmPay” on Jumia to pay for anything on the e-commerce platform.
It worth noting that Nigerian financial technologies institutions continue to build/integrate payment infrastructures on e-commerce platforms. Relatively, we’ve seen OPay integration with Paystack which allows merchants’s customers to pay for goods and services directly from their OPay accounts.
This payment integrations on e-commerce checkout page is known as “pay by bank”. It’s a feature that allows you to simply authorized your bank to pay for the products you’re about to purchase directly from the checkout page. I mean, you don’t need to leave the page to open your bank app. Everything is done and settled on the e-commerce website.
Besides that the integration of Palmpay’s payment infrastructure into Jumia’s checkout page facilitates smooth and seamless payment processing, it also eliminates the fees charged by card processors like Verve for each transaction.
Data from the Central Bank of Nigeria reveals that internet transfers made up 51.91% of all e-payment transactions in the first half of 2024. No doubt, this has contributed to the continual building of “pay by bank” features on e-commerce platforms.
Notably, the Palmpay and Jumia partnership comes five months after Jumia appointed Anthony Mbagwu, a former Palmpay employee, to head JumiaPay in Nigeria. More so, Jumia 2023 Filing reviewed that Palmpay is one of Jumiapay’s biggest competitors.
So, this strategic partnership between the two companies could be a move to leverage each other’s strengths to grow the digital payments ecosystem and address shared challenges, such as regulatory hurdles or infrastructure limitations. It may also reflect a recognition that cooperation could yield greater benefits than direct competition in certain aspects of the fintech space.
According to the CEO of Jumia, Sunil Natraj, he said “by integrating PalmPay, we are providing more options for customers to access affordable and quality goods with the convenience of cashless transactions.”
Partnering with Jumia, which saw significant growth with 2.6 million orders during its month-long Black Friday campaign (an 18% increase from 2023), gives the fintech a chance to capitalize on Jumia’s high transaction volume.
By processing payments for such a large and growing customer base, the fintech can increase its payment transaction revenue and improve its overall margins. This collaboration positions the fintech to benefit directly from Jumia’s expanding e-commerce activity.
