In a significant move poised to reshape the financial landscape for small and medium-sized enterprises (SMEs) in Nigeria, OmniRetail Technology Limited has announced its acquisition of Traction Apps, a payment solutions provider. This strategic acquisition comes as OmniRetail aims to bolster its capabilities in delivering comprehensive financial services tailored to the needs of SMEs in the fast-moving consumer goods (FMCG) sector. By combining forces, the two companies seek to streamline operations for retailers and enhance access to essential financial resources.

Transforming Retail Through Acquisition

OmniRetail, recognized as Africa's fastest-growing company according to the Financial Times Rankings 2024, has built a reputation for addressing the challenges faced by SMEs since its inception in 2019. The company launched its OmniPay platform in 2022, designed to facilitate seamless payments and integrate with multiple financial service providers, thus simplifying collections and supplier transactions. The platform's innovative approach leverages transaction data to build creditworthiness scores for underserved retailers, providing them with crucial access to capital and financial resources.

The acquisition of Traction Apps marks a pivotal moment for OmniRetail, allowing it to expand its service offerings significantly. With Traction currently serving over 100,000 merchants across various sectors—including retail, supermarkets, restaurants, fashion, and electronics—the integration of Traction's merchant point-of-sale (POS) services into the OmniPay platform is expected to enhance the financial capabilities available to customers.

Enhancing Financial Services for SMEs

The combined entity is projected to process over N2 trillion (approximately USD 1 billion) in annual transactions, facilitating loans worth N200 billion (around USD 122 million) annually. This ambitious target reflects both companies' commitment to empowering SMEs and ensuring they thrive in an increasingly digital market. The merger not only aims to streamline payment solutions but also enhances credit access and loyalty programs, providing a holistic suite of services that address the unique challenges faced by small retailers in Nigeria.

Deepankar Rustagi, CEO of OmniRetail, emphasized the importance of this acquisition, stating, “This merger is a testament to the synergies we’ve built with Traction. What started as a partnership to integrate Traction’s POS into OmniPay for card payments has now grown into a full merger. Together, we will simplify payments, credit access, and loyalty solutions for retailers and SMEs, helping them thrive in an increasingly digital market.”

Traction’s Growth and Vision

Traction Apps has established itself as a key player in the payment solutions sector, focusing on empowering small businesses through a one-stop platform that integrates payment acceptance, lending, and retail software solutions. The company’s mission aligns closely with OmniRetail’s goal of bridging the gap between retailers and financial services. As Mayowa Alli, co-founder at Traction, articulated, “This integration will allow us to scale our solutions and accelerate our vision of simplifying payments at the retail level.”

With the backing of OmniRetail’s extensive ecosystem, Traction’s innovative solutions are set to reach a broader audience, potentially benefiting more small businesses across Nigeria and beyond. This partnership represents a shared commitment to enhancing access to financial resources and improving operational efficiency for SMEs.

Integration and Future Prospects

The acquisition will unfold in phases, beginning with the integration of the OmniPay and Traction teams. Full integration is expected to be completed by the end of Q1 2025, with enhanced services rolling out to customers shortly thereafter. The combined platform is anticipated to not only strengthen differentiation from other fintech players but also improve customer satisfaction and service delivery across the board.

According to Dotun Olowoporoku, partner at Venture Platform, the acquisition is a significant step toward building more comprehensive offerings for African SMEs. “We believe in leveraging the strengths of our portfolio companies to create more robust solutions. This acquisition is a major step forward,” he noted, highlighting the potential impact on the SME sector across the continent.

OmniRetail’s acquisition of Traction Apps marks a pivotal step in transforming the financial services landscape for SMEs in Nigeria. By integrating advanced payment solutions and expanding access to capital, the merger aims to empower small businesses and enhance their operational efficiency. As both companies move forward with this integration, the expected outcomes promise to revolutionize the retail financial ecosystem in Nigeria, setting a precedent for future growth and innovation in the African fintech space. With a shared vision of driving profitability and enhancing service delivery, OmniRetail and Traction Apps are well-positioned to lead the charge in supporting the continent’s burgeoning SME sector.