Grace Ashiru
With the endorsement of the Central Bank of Nigeria (CBN), Flutterwave has unveiled Swap, a digital solution aimed at transforming the Nigerian foreign exchange (FX) market. This initiative is a collaboration with Wema Bank, ranked tenth in Nigeria by assets, and Kadavra BDC.
Flutterwave’s Swap is a groundbreaking product designed to simplify the foreign exchange acquisition process for Nigerians enjoying the support of the CBN. The fintech company is capitalizing on its alliance with Wema Bank and Kadavra BDC to ensure liquidity and foreign exchange for this service. Mr Folashodun Shonubi, the interim governor of the CBN, mentioned in a recent press briefing that Swap has the potential to address two critical challenges in Nigeria’s FX market: the absence of inter-institutional cooperation and the reliance on physical cash.
Shonubi remarked, “We haven’t issued any fresh licenses, and we’re optimistic that (Swap) will stabilize rates for the BDCs while distinguishing BDC operations from black market dealings.” Flutterwave will utilize its International Money Transfer Operator license, granted by the CBN, to source foreign currency. Meanwhile, Kadavra will employ its BDC license for sales, and Wema Bank will oversee the entire procedure.
He further stated that BDCs resisting the shift to digital would gradually be eliminated as the CBN aims for a cashless FX market. He emphasized the distinction between a regulated market, represented by a BDC, and those not overseen by the central bank. He also revealed the central bank’s intention to monitor all Swap transactions, ensuring unregulated foreign dealings cease.
Swap’s introduction follows a statement by the CBN’s acting governor, promising to settle all FX arrears within a fortnight. Although past endeavours, like the publicized $3 billion AFREXIM loan, haven’t been fruitful, the CBN remains tight-lipped about its latest strategy to address the longstanding FX arrears. Failing to resolve these arrears would continue to drive substantial demand to the unofficial market, hindering the CBN’s price stabilization efforts.
Olugbenga Agboola, Flutterwave’s CEO and co-founder, expressed, “We recognize the FX accessibility hurdles faced by individuals and enterprises. Swap is our solution, offering an intuitive platform for currency trading.”
Currently, Swap is accessible exclusively on Flutterwave’s web application for registered Nigerian users. The service supports transactions in dollars, euros, and pounds. Starting in October, Flutterwave plans to roll out cards for Nigerians needing quick access to Personal Travel Allowance (PTA) and Business Travel Allowance (BTA).
To use Swap, users must undergo several identity verification stages and upload relevant documents online. This includes providing their bank verification number, a selfie, the purpose for seeking FX and supporting documents. Once all necessary details are submitted, users can specify the account for deposit, receiving funds instantly. Additionally, banks can integrate Swap via API.
