Flutterwave has unveiled “Swap,” a revolutionary digital solution aimed at transforming the Nigerian foreign exchange (FX) market.
This innovative platform is the result of a strategic partnership with Wema Bank, one of Nigeria’s top ten banks in terms of assets, and Kadavra BDC, a prominent bureau de change.
Swap, the brainchild of Flutterwave, represents a pivotal shift in the way Nigerians access foreign exchange, with full support from the CBN. The fintech firm has forged a collaborative alliance with Wema Bank, a leading commercial bank, and Kadavra BDC, a licensed bureau de change, to facilitate seamless liquidity and foreign exchange services for its users.
During a recent press conference, Mr. Folashodun Shonubi, the acting governor of the CBN, underscored Swap’s potential to address two critical challenges plaguing Nigeria’s foreign exchange market: the lack of coordination among financial institutions and an overreliance on cash transactions.
Shonubi said, “No new licenses were issued, and we believe (Swap) will help moderate the rates for the BDCs and at the same time differentiate BDCs from black market transactions.” Under the partnership, Flutterwave, leveraging its International Money Transfer Operator license from the CBN, will facilitate the acquisition of foreign currency, while Kadavra will utilize its BDC license for selling, and Wema Bank will provide comprehensive support throughout the process.
Shonubi also said the CBN’s commitment to phasing out non-digital BDCs as part of their drive to transition the FX market towards cashlessness.
“This helps us to differentiate between what is a regulated market, which is a BDC, as opposed to the ones which the central bank does not regulate,” he added, noting that all transactions on Swap would be closely monitored to eliminate unregulated foreign transactions.
The launch of Swap follows closely on the heels of the CBN’s announcement that it aims to clear all FX backlogs within two weeks. While previous efforts to address the backlog, including a highly-publicized $3 billion AFREXIM loan, yielded limited results, the CBN is hopeful that its new initiatives will bring much-needed stability to pricing and reduce the demand for parallel market transactions.
Flutterwave’s CEO and co-founder, Olugbenga Agboola, expressed the company’s commitment to addressing FX access challenges faced by individuals and businesses, stating, “Swap is our answer to those pain points, providing a seamless and efficient platform for currency exchange.”
Swap is currently accessible exclusively through Flutterwave’s web application for registered Nigerian users. The platform offers access to dollars, euros, and pounds. Starting in October, Flutterwave will issue cards to Nigerian users requiring swift access to Personal Travel Allowance (PTA) and Business Travel Allowance (BTA).
To use Swap, users must complete multiple identity verification stages and submit required documentation online, including their bank verification number, a selfie, the reason for requiring foreign exchange, and supporting documentation. Upon successful submission, users can specify the account for deposit and receive funds instantly.
Swap will also be accessible via API for banks, enhancing accessibility and convenience for a wider audience.