I remember very clearly having a conversation with the Gates Foundation many years ago. And I said to them, you know, that we strongly believe the agent business is a 20-year business. Because at some point actually they thought it would be shorter. They thought people would not need agents shorter. And at that time I said, "No, I think it's 20 years." Because at some point, you know, people would be really digital. Right? And it's actually quite ironic that till today, you know, cash is still king in Nigeria, right? Like 80% of transactions are done in cash. And for all the money spent on agent business and building out that agent network across all competitors including us, the biggest transaction of the agent is people going to a point of sale machine to get cash. So, they want to get cash to spend cash. Right? So, it's actually has driven the use of cash. It's actually not digitized the economy.
And that's the, you know, the irony of that. How does AI fit into the world of payments? How does AI fit into the world of financial services, right? Because as you know, Africa today is the single largest greenfield financial services market in the world.
In 2009, the Central Bank of Nigeria had not yet written the rules for mobile money. The licensing framework would not arrive until 2011. It was in that void that Tayo Oviosu founded Paga. 16 years on, Paga has lived through every chapter of the Nigerian payment story. My conversation with Tayo gets into all of it.
Welcome to the F-squared podcast. This is a show where we explore the people and ideas shaping the future of financial services across Africa. Tayo, thank you so much for joining the show. I've been a big fan of your work and your operational discipline and I specifically admire the Paga Paga 2.0. And I think the reasons why I admire that so much will become evident in the show. But you're really one of the proper OGs in African fintech, and so very glad to have you on the show.
I appreciate it. Thank you so much for inviting me and, yeah, I'm looking forward to our conversation.
Great. Now, we'll go way back and also much to dwell on the funding story. But you were actually in the semiconductor business, right? And you did electrical engineering and all that. And do you now, with everything going on in AI, think that, you know, maybe I should have just stuck around and ridden the AI wave?
Yeah, you know, it's interesting. It actually is very interesting because the last two weeks — okay, let me actually step back a little bit. I discovered Claude Code about two months ago, maybe. But in the last two weeks, I discovered Claude Code — I mean, I've been hearing about it and all this other stuff, but then I actually then discovered it. And I have now in two weeks, I have three applications built. Two of them are already being deployed, already being used. The third one, our team is now looking into the code so that they can harden it and put it into our consumer app and our merchant app. But it's just wild like how it accelerates doing things. And now, I haven't written a line of code in any of these. However, I've had to use my logical thinking across instructing Claude Code or even being able to say, "Hey, wait a second, you're stuck. I'm going to ask Gemini." Right? And then going to go ask Gemini. So, actually both of them have been working together. Three or four times Claude has been stuck and I've gone to Gemini.
So, if I go back to your question, right? I studied electrical engineering at University of Southern California in LA. And then I went to work for a semiconductor chip design company startup. Eight people building the future of digital imaging for cameras and things like that. And I sucked at it, right? I didn't do well at all. I was actually fired at my first job, you know, and that was crazy — like three months after undergrad. You'd moved to America, you'd spent all this money, you'd suffered, and then you get fired, you know, it was massive for me.
But the thing that stayed with me across everything I've done since electrical engineering and why if I had to do it again, I would still do it, is that electrical engineering taught me how to think logically. And how to solve problems. Right? And how to apply yourself, right? Through the process, thinking about things, understanding it, unpacking it. Those are things that you can't shortcut. Right? So, you have to like build that muscle. And I think that muscle would still help anyone in the AI world, right? And if I go back to my Claude Code example, that muscle is helping me. Also because I've coded in the past, it's helping me think about how to engage Claude, right? And how to actually move something forward. No, I wanted this way, I want that way, right? So, a mixture of the problem-solving capabilities, the product management experience, right? Is helping me actually like engage the AI in a more productive way. So, I actually am of the view that AI is not about letting people go or firing people, but actually as human beings, we need to not lose our agency and our way of thinking, but actually have AI help us accelerate and be more productive, right?
I woke up this morning, I had asked for a presentation from one of my GMs for his business. And I had seen that presentation and I was like, "Ah, I don't think this works, you know?" And so, I woke up this morning and I went into Claude Design and I said, "Okay, we're going to set up the Paga design system in Claude Design." So, I uploaded our presentation template. We went through it. It took it about 5-10 minutes. I actually left, I came back, it was done. I downloaded it and then I set up a new project and then I described what I want. And I gave it all the inputs, I gave it images, everything. Like, here are the products we have, here's how the services work. And I said, "Look, you don't have to have the content, but I want you to develop the scaffolding." And now it's developed the full scaffolding. And before this call, I handed it off to the GM. And my expectation — and I said, "Look, I actually need this very soon because I need to present and give it to a client, which is why I was asking." But now it's accelerated our ability to just deliver content, right? Like it delivered stuff. So, now he has to apply himself and actually fill out the content, but I think it's done 60% of the work. Now he has the 40% to do to get it there.
So, I'm really fascinated by AI and so far it's been about how is it making me more productive and making the company more productive. Where I'm even more fascinated to think about is how does AI fit into the world of payments? How does AI fit into the world of financial services, right? Because as you know, Africa today is the single largest greenfield financial services market in the world. There is, you know, 57% of Africans are unbanked or underbanked. Of adults are unbanked or underbanked. And we are the youngest population in the world, right? So, we're building financial services from the ground up. And there is nowhere else in the world where financial services are being built from the ground up at this scale. So, it's a massive opportunity and I'm super excited to think about like what AI is going to do, right? In financial services for Africa.
Well, that's really interesting. And I think it informs part of the work you guys are doing at Paga Labs in the recent restructuring. But before we get there, we really have to go to the beginning. Not so much to dwell on the founding story, but to understand how you were thinking about financial services back when you founded Paga. You know, the context was that M-Pesa was only two years old. So, like mobile money as a concept was still relatively young.
Yeah.
But, you had the insights to do this in Nigeria. And, of course, it was largely based on a lot of the frictions you were seeing in terms of just making day-to-day payments. But, you settled on this mobile money strategy. And there was like no regulatory clarity at the time, at least from what I understand, right? And so, how are you thinking about — you know, financial services everywhere is regulated. But, you're going into this field and just saying, "I'm going to build this." How are you thinking about how you're going to interface with the regulation? And, mind you, you were bootstrapping or, you know, a lot of investors were saying, "Well, do you have a license?" No, I don't have a license. So, how are you going to invest in this and there's all this regulatory risk. How are you thinking about that at that point in time?
Yeah. In fact, I had never heard of M-Pesa when I had the idea for Paga. And it was — but, I found out very quickly, right? By just doing some more research. The example I had in my mind was PayPal. Because I had used in 2004, I had used PayPal by SMS. And that was the example. So, I was like, "Well, if I could use PayPal by SMS, then and everybody has a phone, even if they don't have a smartphone, we should be able to do payments." So, I mean, I think my first pitch deck said PayPal for Africa. That was like the pitch. But the way I thought about it was that, look, we had to be regulated. And so, I, you know, went to the Central Bank's website. I found a phone number. And I called. And they asked me who I was looking for. I said, "Is there a payments department?" And there was nothing called payments department. But, then they start pushing me around, sent me to this person, sent me to — and you know back then they transfer calls. So people literally picking up the phone and hear me a little bit, transfer me to somebody else, and then hear me again, transfer me to go talk to this guy. Eventually, they transferred me to the guy who picked up the phone, and it turns out that he was the one that had been driving the creation of a regulatory framework for mobile payments in Nigeria.
And at the time, he was the personal assistant to the Central Bank Deputy Governor.
And by the way, here's a fascinating story because today, in 2026, that was in 2009, in 2026, he's the director of banking supervision, and that is — I mean, all the directors are equally weighted, but arguably one of the most powerful directorships. And so it's really interesting for me, and actually like just seeing it. Like, you know, he was a — and he's an amazing human being, right? But anyways, he picked up the call, and he was like, "Who's this guy? You know, who are you?" He's like, "I'm in Lagos." So then he was like, "Look, I'm in Lagos next week. Let's meet." So I met him, and then he gave me, you know, the feedback on what they'd been doing. He shared the documents with me for me to read. There was no clear process or anything. But they put together the semblance of a team that could start looking at stuff.
And so, you know, we got to work. We wrote our application. We put in a bunch of — I mean, there was like 300 pages of a document, and I had to print two copies out, hard copy, put it in like three different drives for them.
Bind the books. Because literally went with a suitcase to Abuja and put this binder book and I had like, you know, thumb drives to submit the application, you know? And it took us a good month to prepare the application, I think. Myself, Jay, and back then Aisha working like hard to, you know, draw the diagram, show them how everything's going to be done, show them the technical stack, where we're going to put the servers, all the stuff, like really the process steps for everything. Anyways, so we did apply for a license. And three months after we applied, I was like, why don't we still have this thing, you know? And so we then networked our way to the Central Bank Governor, had a meeting with him and he called the entire team. And he called the Deputy Governor and everyone and he's like, where are these guys? And also, interestingly for him, this is His Excellency Lamido Sanusi Lamido.
And he said he had never heard of mobile money. So that meeting was his first time of hearing about M-Pesa. That was his first time of hearing of mobile money. He'd never heard of it.
So the team had been working without him knowing what they're doing, right? It hadn't come to his level. And he was like, this is amazing. Like if what you're describing is true, like this could really drive financial inclusion. You know, so he's like, guys, what are we waiting for? You know, you need to push the framework out, create a process for people to apply for this license, get the license out, let them get going, you know? And then they put out a framework and did an RFP. And then now, of course, when there's an RFP in Nigeria, everybody wants to get a license.
So I was like, oh man. So that then pulled invited other people to get licenses and I'm like, oh man, we should have just kept quiet. Like, you know, like what is this? Now I created competition. You know.
And prior to that, you're the only ones who are actually applying for this thing.
The only ones that applied for this thing. Nobody knew anything. Like, we just kept quiet. Like, you know. So, sometimes, you know, you want to keep quiet.
So, then you went through the process. And long story, I remember the day before the final, they did this big thing where everybody had to come and present their solution at the same time to a committee at this hotel. And the day before, I remember presenting it to one of the guys in the Central Bank. And I demoed Paga for him. He was blown away. He was like, "Nobody else." He's like, "Are you confident nobody else coming tomorrow will be able to show a working product?"
So, what this is going to mean is that you guys are going to come out of there and they're going to say — you know, because they already think because we networked our way to the Central Bank governor, they're like, "Wow, these guys are connected. We don't know who they are, but they're connected." So, he's like, "People are going to leave thinking, oh wow. Not just that they're connected, but actually they're serious. They actually have a working product." Right? So, it's no more going to be about you know Oga, right? But actually, you have a product. And I think that was the beginning of the respect from the Central Bank folks. And the relationship has just been amazing since, up and down, till today. You know, I actually am a big supporter of the Central Bank of Nigeria. I always say actually they get more flak than they should. Because I can't think of a single regulation that has affected our industry that they did not seek opinion of the industry. They're very collaborative in how they work with the industry. So, yeah. So, I'm a big fan. And that's across central bank governors. So, because they've been there three central bank governors since we've been on this journey. And I've seen that consistently and even more with this current central bank governor. So, anyway, so that's how we — so we ended up flying.
But you made a comment about the investors.
And there's a real point because, you know, most of the investors we spoke to were like, "Oh, love this, but we're not doing it. We're not investing till you get the license." Right? But what I did and Jay and I — what we did was we met with them consistently. So, actually we kept a cadence. And it's actually hard to think of it now because like now when I'm fundraising now, I don't keep a regular cadence to all the investors I meet who say maybe not now, right? But back then we actually kept a cadence with that. We every month we met with the same group of investors. And we said, "Here's the update. Here's what we've done so far. Here are places we have questions. What do you think?" Right? And so what that did for us — now, actually of all the investors, one of them decided to invest before the license. But before she decided to invest, we'd also kept a cadence with her. Right? But then she decided, "You know what? I'm going to go ahead and give you half a million dollars." Right? And then we went ahead, used that money, I needed more money, she invested the next half a million dollars. So, now she had invested a million dollars before the license. Right? And then the interesting thing was like the day — a week from when the second 500 came in, we got the license. So, I'm like, "Oh, man, she got such a sweet deal." One week, because like literally after that, once we got the license, we got term sheets in within two weeks.
Right? Within two weeks got term sheets and the round came together with all the people we had already been keeping in touch, right? So for all of them, by us keeping that cadence — and that's like I guess the lesson to other entrepreneurs is that, you know, by then us keeping that cadence with them, they saw many things. One, they could witness our commitment. Two, they could see our thought process as we were thinking through different problems and solving them and coming back to them and saying this is now how we're thinking. Three, they were also engaged in the thought process. And so their thinking was flowing into our thinking. And so they're already bought in. So before license they're already really part of this thing. It's now we are doing. Right? Even subconsciously. Right? And it wasn't just a partner. In most of the cases they actually brought other people on their team into the meetings. So that it really by the time they invested they were already sold. They're already bought in, right? To be part of the journey.
That's an extremely interesting story and you're right. Like that kind of alignment is super important in that early stage.
But now you have your license in hand. And I think maybe one of the reasons the Central Bank was also so excited was that there's a lot of work being done by them around that time around financial inclusion stuff. And so they're like —
Yes. And cashless Nigeria.
Be a huge — this could be a huge fast win for this whole cashless Nigeria thing. But then now you start going and recruiting agents. And you know, for you it's a chicken and egg problem. Like you have to build a product. You have to educate the market and what, you know, mobile money is. You then have to recruit agents and recruit customers at the same time. And this was, you know, 2011 around that time. So like what were your — what was your thought process around now building out this network?
Yeah, I remember you're reminding me of the conversation I had with Jay about this. You know, I and I remember going to — I had thought about it myself and I said, "Look, we have this thing where on one hand we have to build a product. On one hand we got to — feet on the ground, recruit agents. On the other hand we have to also sign up merchants and billers and things like that, you know, and business develop." And I said, "Look, I went to — I said, one of us has to drive building the agent network. And focus solely on that. And it's not me. And that's you." You know, and neither of us had carried a bag before, quote unquote, right? A sales bag. Neither of us had done it before, but like one of us has to do it. And so, you know, Jay took that on. And he led the build out of that agent network. Hired the team, trained the team, created the processes, created everything, right? And ground up built that agent business. And that was hard, right? And that was really strong work because that was a key part of it. And then I focused around the product and I focused around the business development efforts we had — like our relationship with Interswitch which was a big client, our relationship with Multichoice which was our first big win. You know, in terms of a third party trusting us. And building that out. So, it was really a divide and conquer approach which is still sort of how I think about the world today.
I still think about divide and conquer because you can't do everything alone. It's really about team. And it's about people knowing their responsibility, owning their responsibility, and allowing them to fly. I feel like my job as a leader is to find the most competent people who believe in a greater purpose, frankly. Because I actually do believe we're on a God-given mission for what we're doing. And who key into the mission. And then I just say like, "How can I help you? And let me get out of your way." Right? And let them fly. And I think that's like sort of my philosophy. But yeah, no, but it was a divide and conquer and, you know, that's how we got going. And it's just one step in front of the other. Right? And I don't think you can do it — like even though I wasn't responsible for building out the agent network, I needed to understand it as well. So, I went out on agent visits. I went out as well to understand trying to sell somebody on the idea, right?
Got it. And one of the things is that — so, again, you know, chronologically, started 2009, you know, 2011 you got your license. You're building out this stuff. But at the same time like Nigeria's financial system was also evolving. And so, much later, you know, the Paystacks, the Flutterwaves, but more importantly, things like NIBSS, BVN also came into play, right? But even another factor in this is that when you were starting Paga, like VC in Africa was still extremely nascent. But then, you know, six or seven years later, like there's just torrents of cash now flowing into the ecosystem, right? And this kind of created like the conditions for, you know, your competition. You know, like how did you navigate that entire period? And like what were the things you were focusing on between, let's say, 2011 and 2016, 2017 as the ecosystem evolved.
Yeah. Man, I mean, look, we've — as you can imagine as I guess this is what you're saying, right? We've been through many cycles. We've been through funding — lots of funding, funding droughts. We've been through regulatory changes. We've been through market cycles, currency devaluations, everything. And I think it's — one of the things that really is a big advantage for us as a team today and as a company today is that you can't shortcut to those 17 years, right? Like that is like we've been in the trenches of fintech and we get it. But back then, you know, I think for us and as a team we've been from the beginning very focused around strategy. Understanding our strategy, clarifying it with each other and staying focused on it versus the thing of the day. Or the de jour of the day. Right? And so, you know, in taking that perspective you also understand the market, understand the players, understand new people coming in.
And on one hand actually, you know, like I joked about competition earlier — it's good having competition because then you realize you're not crazy. Right? That actually there's something here. Other people are also seeing it. It's not just you. And competition sharpens you and keeps you on your feet. Like for example I know you mentioned Paystack, Flutterwave — and I remember very clearly when those companies were starting, we had a very conscious decision that we made to not go after the card gateway business. Right? And you can knock that whether it was right or wrong, etc. But ultimately, I think it was right. Like ultimately, those companies are actually now coming back to our direction. You know, to what we actually cut our teeth in. And that's why today I think we're actually winning against them in those because this is where we cut our teeth. This is where we are better. We're better in the alternative payments. Right? And they're now trying to build that capability, you know, and trying to like catch up. But now — and we are where the market is. The market is at all time kind of payment. Card — Nigeria is not a card market. It's like India. It's not a card market at all.
And so, you know, imagine — I'm sure they are asking themselves the question — imagine if we didn't spend all that time on cards and I spent it elsewhere. Right? Now, you know, let's say there is no card business. There is a card business, but it's not the bigger business. So, I think there's something one of my investors says that is the first line in our strategy documents and I'm always going to put it as a first line in all my strategy documents as like as a header.
Strategy is what you choose not to do in order to do the things you want to do. So, I'll repeat it again. So, strategy is choosing what not to do in order to do the things you want to do. So, it's very important to be able to — and the section of our strategy document says decisions we have made, the things we have decided not to do. And we actually write it out and describe why because it could change as well in the future. You could come back to it. So, again, if I take cards as an example, we've come back to it. And today we're now integrated directly to Cybersource for Visa card processing. Physical cards, we have our own gateway, our payment gateway and we're connected to Interswitch, we're connected to Zone through that blockchain, through multiple banks. Directly. So today we've come back to cards and we actually now can offer clients cards, right? As a capability. And we actually serve a number of airlines and a number of big clients as a capability on cards, even though people wouldn't know us for that, right? So, you know, I think it's back then it was really around like, okay, what is our strategy? What are we trying to accomplish as a company, right?
Our massive transformative purpose has stayed the same since inception, which is that we want to make it simple for one billion people to access and use money. Right? So not a million people, not a hundred million people, one billion people. Because that's the size of the opportunity and the size of our own ambition, right? And so how do we do that? What is the way to do that? And that's what our strategy then lays out. And so even though there were all these people start setting up payment companies here and there, we kept coming back to our strategy. Kept coming back to what is true for us. And also being conscious of what is our own financing, how can we execute with this financing and with our income, right? What do we do in the context that we're in? So I like to say that, you know, I don't live in my dream world. I live in the present and in reality and make sure that everything we're doing is grounded in reality.
And I think that grounding — and you know, I remember in 2014 I was in Johannesburg with our largest investor having lunch. And he said to me, "Tayo, you know, well we were from Silicon Valley. We knew each other from Silicon Valley. We had worked as investors, you know, and got to know each other back then and both moved back. He moved back maybe a year or two before me to South Africa and been doing business on the continent. Anyway, and he said to me, 'Tayo, you can't run Paga like you're in Silicon Valley. You need to get this business to cash flow positive and you need to control your destiny. Don't try to grow at all costs because you just don't know where the pools of capital will come from, whether Africa would be a prime destination for capital or not. It might be and it might not be. But your vision is a big one and it's a long one. So, you've got to control your destiny.'" And I took that to heart and I went back to my leadership team and I said, "Look, we are going to get to EBITDA positive and we're going to get to cash flow positive. But we're not going to do it by burning and turning." I think there were about 300 people in the company at the time. You know, we are going to do it in a sustainable way.
And God bless our CFO at the time. You know, she was just amazing and she said, "Look, okay." She took it to heart and said, "Look, if we are buying —" and start training the team. So, we actually would show the team our numbers and teach them what is revenue, what is gross profit, what is EBITDA, what is net income. And we'll show it to them. And we'll say, "Revenue number, you may hear me talk publicly about revenue. And I might even quote our revenue numbers publicly. But that is vanity. Gross profit is what pays the bills, right? And gross profit, if we don't have enough gross profit to pay the bills, then we need to raise money. So, how can you influence it?" You know, and the way you can influence is if we were to buy, you know, this tub of Vaseline as a company, and you're responsible for buying this Vaseline, you need to be the one to think about, okay, we want the best type of Vaseline. So, you know, you need to — but then you need to say it's your business. You're an owner and you have shares in the business, so it is your business. Negotiate the best damn rate possible. Right? Like for that thing. And make sure we get the best deal. And if you do that for every single thing in this company, like all of us are being aggressive around that, then we're going to control our destiny.
So, I'm not saying we shouldn't have what we need, but in everything, whether it's marketing, billboard, whatever it may be, negotiate the best deal.
Got it. But one of the things — maybe I don't know if it's pushing back or just asking.
So, you know, around this time the whole kind of like agent banking model now started getting, you know, very competitive. And that's, you know, if you look at the Nigerian ecosystem, that's where actually a lot of the cash has gone into, like not just building out this agent networks.
And you had started this. But then now I'm sure you're facing a decision because, you know, in payments, you've got a long vision, but like even your earlier writing was saying how, you know, you said something about I'd rather have a small percentage of a large company than 100% of a small company. And you were very clear from your early writings that you kind of need to raise money to become big, right? But now as you're seeing this competition coming out especially in the consumer side, I'm keen to understand where you got conflicted and how you manage this kind of conflict, because — and whether — how did you go back to your strategy books? What did your strategy books say about this kind of dilemma? You already have the infrastructure. So in effect, you could have also just gone out and raised a bunch of cash and also competed. I want to understand how you manage that conflict.
Yeah, these are really good questions. And these are things that we, you know, again, we always came back to strategy and always came back to like what we're trying to do and why.
You know, it's interesting. I mean, I remember very clearly having a conversation with the Gates Foundation many years ago. And I said to them, you know, that we strongly believe the agent business is a 20-year business. Because at some point, actually they thought it would be shorter. They thought people would not need agents shorter. And at that time I said, "No, I think it's 20 years." Because at some point, you know, people will be really digital. Right? And it's actually quite ironic that till today, you know, cash is still king in Nigeria, right? Like 80% of transactions are done in cash. And for all the money spent on agent business and building out that agent network across all competitors including us, the biggest transaction at the agent is people going to a point of sale machine to get cash. So you want to get cash to spend cash. Right? So it's actually has driven the use of cash. It's actually not digitized the economy.
And that's the, you know, the irony of that, right? And so we were also clear that — and God bless those who took a different approach, right? Because we were also clear that we were not about investing a hundred dollars on the device and giving it out for free. Now, some people have done that and they've done well from it. And that strategy — that's great, they know how they got the money to do that. Like that's great. I don't know. That's not me. That's not my business. Like, you know, so again, I'm grounded. I don't know how they did that. I still don't know how they did that. I'd love to hear that story one day. So again, we look at that and we said that those unit economics don't make any sense to us. So we're not doing that. That's not us. We're not doing that. Again, we're not doing that. And we're clear we're not doing that.
