In the dynamic realm of financial technology, PayDay, a Nigerian start-up recognized for its payment solutions, finds itself at a crossroads. The company is currently engaging in active discussions with potential acquirers, marking a significant development six months after a successful seed funding round led by Moniepoint, a prominent Nigerian digital payment platform.
Initially, reports surfaced suggesting Moniepoint’s interest in acquiring PayDay, with CEO – Favour Ori – providing tacit confirmation of these talks. However, as time progressed, this potential acquisition did not come to fruition, allegedly due to reservations from Moniepoint’s board.
Adding to PayDay’s narrative is a chapter marked by a wave of adverse publicity, stemming from a necessary yet impactful decision. The start-up temporarily suspended access to customer accounts, citing fraudulent activities.
Some of the internal issues include the CEO’s pattern of hiring talents through social media, and giving them the freewill to implement their ideas instead of following laid down directives. A source also said Favour’s impulsion had led to some customers losing money, which has affected the company’s public outlook. A scenario cited include the switch between Mastercard provider without necessary homework done.
“All of this happened because Favour abruptly switched from our previous Mastercard provider to a new one, with minimal to no prior vetting. As soon as the switch happened, we were inundated with a wave of customer complaints,” an employee said.
This internal struggle, combined with the negative publicity, has further complicated potential acquisition efforts.
Beyond the acquisition talks, PayDay grappled with internal challenges that threw a spotlight on its operations. This included a contentious salary adjustment which emerged from the conversion of salaries initially paid in US Dollars, to Naira; unfulfilled promises of stock options, and the departure of key employees, notably Chief Operating Officer (COO) Ogechi Obike.
“They told us that it was because the company wanted to be domiciled in Nigeria and was obligated to pay its resident employees in Naira,” an employee said.
While employees expected the Naira equivalent of their salaries to align with their dollar salaries, the actual amounts fell short, amounting to 30-50% reductions.
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Report has it that the salary issue affected only a handful of employees, and what made the employees even more aggrieved is that amidst all the brouhaha, Favour maintained his salary of $15,000, and the promised stock options never saw the light of day.
Favour Ori found himself under scrutiny for making decisions that were perceived as abrupt and autocratic, impacting both employees and customers. Recent times have witnessed a reduction in his active involvement with the company, fueling speculation about the future trajectory of this fintech start-up.
However, amidst these internal challenges, PayDay remains resolute in its commitment to customer satisfaction. The company has taken swift action, putting in the works to refund those affected by service disruptions.
This comprehensive report is based on an exclusive piece by TechCabal, providing a detailed account of PayDay’s current situation and has been summarized for brevity and clarity.