eTranzact International Plc reported a 22.6 percent rise in revenue to N16.28 billion for the first half of 2026, but the payments company’s bottom line came under severe pressure as costs surged faster than income. The Lagos-listed firm expanded its agent banking and point-of-sale network during the period, even as structural shifts in Nigeria’s payments ecosystem squeezed margins and a change in ownership reshaped its shareholder base.
Revenue climbed from N13.28 billion in the corresponding period of 2025, yet cost of sales jumped 39 percent to N9.50 billion from N6.84 billion. Gross profit inched up only 5.1 percent to N6.78 billion, pushing the gross margin down 690 basis points to 41.6 percent from 48.5 percent a year earlier. Administrative expenses rose 21.9 percent to N4.81 billion, while selling and marketing costs fell 11.9 percent to about N377 million. Operating profit consequently dropped 23.2 percent to N1.59 billion from N2.07 billion. Finance income increased to N150 million from N88 million, but profit before tax still declined 19.1 percent to N1.75 billion, with profit after tax settling at N1.22 billion. The results underscore a widening disconnect between top-line growth and the expense of generating it.
A significant corporate shift accompanied the earnings. As of June 30, Trademarks Global Concepts Limited held a 56.18 percent stake in eTranzact, giving it a controlling interest. The move displaced Access Bank Nigeria Plc’s previous 37.56 percent holding, while eTranzact Global Limited’s stake declined from 22.50 percent to 14.49 percent.
The company also faces a changing fee environment that threatens its core switching business. The Nigeria Inter-Bank Settlement System (NIBSS) instant payment switching fee has been reduced from N5 per transaction before 2023 to N3.75 in July 2023 and N2 in January 2026, with a zero-fee model targeted for the end of 2026. For payment switches like eTranzact, the declines mean transaction volumes must grow substantially to offset lower per-transaction revenue. Meanwhile, the industry is transitioning to the National Payment Stack, which recorded its first live transaction in November 2025 and is expected to eventually replace the existing NIBSS rails.
To capture more volume, eTranzact invested heavily in its physical distribution network. Capital expenditure reached about N1.23 billion in the first half, with approximately N850 million directed toward POS deployment. The expansion carried a heavy cash-flow cost: payments to suppliers and employees nearly doubled to roughly N21 billion, and operating cash flow swung from a positive N1.14 billion in the first half of 2025 to a negative N6.86 billion.
The half-year performance follows a mixed start to 2026 after eTranzact remained profitable in 2025 despite weaker earnings. The stock featured prominently in Nigerian Exchange trading activity in March 2026, a period when the All-Share Index fell 0.69 percent to 201,156.8 points and market capitalisation declined to N129.1 trillion.
Separately, the company is contending with a legal matter involving alleged fraud on its platform. Earlier this month, the Federal High Court in Abuja ordered 12 commercial banks and six Fintech platforms to place about 69 accounts on post-no-debit restrictions over alleged fraudulent and unauthorised credit transactions. The case followed a petition by eTranzact concerning alleged database penetration and transaction manipulation on its internet banking platform, which reportedly resulted in fraudulent credits to beneficiary accounts held at other financial institutions, according to Nairametrics.
As eTranzact navigates fee compression, ownership transition, and heavy investment outlays, its ability to convert volume growth into sustainable profitability will hinge on cost discipline and the pace of migration to the new national payments infrastructure. The coming quarters will test whether the current expansion strategy can withstand the dual pressures of declining switching revenue and rising operational demands.
