Hydrogen surpasses HabariPay in Q1 profit growth among bank-owned fintechs

Access Holdings’ fintech subsidiary, Hydrogen, has recorded the highest profit growth among Nigerian bank-owned payment companies in the first quarter of 2025, overtaking long-time leader HabariPay, the fintech arm of Guaranty Trust Holding Company (GTCO) in Nigeria’s increasingly competitive digital payments space.

According to the banking group’s latest financial statements published on the Nigerian Exchange Limited (NGX), Hydrogen’s after-tax profit surged by 466% to ₦283 million ($178,344) in Q1 2025, up from ₦50 million ($31,509) in the same period of 2024. GTCO’s HabariPay posted a profit growth of 52%, rising to ₦1.66 billion ($1.1 million) from ₦1.09 billion ($686,910).

Stanbic IBTC’s Zest Payments, however, widened its loss to ₦508 million ($320,138) in Q1, compared to ₦436 million ($274,764) a year earlier.

Hydrogen’s strong start to the year comes at a time when independent fintechs like Flutterwave are under pressure to turn profits, and Paystack contends with regulatory pressure. By contrast, bank-backed fintechs like Hydrogen and HabariPay are gaining ground, relying on large customer ecosystems, strong compliance channels, and robust capital bases.

While Hydrogen and HabariPay’s combined Q1 profits account for just 0.44% of their parent groups’ total profit of ₦440.8 billion ($277.7 million), that margin has more than doubled from the 0.19% recorded in Q1 2024, signaling growing relevance within the banking groups’ revenue mix.

“Hydrogen is leveraging Access Holdings’ extensive ecosystem of approximately 65 million customers to drive value creation,” said Roosevelt Ogbonna, CEO of Access Bank, during the group’s investor call on April 23.

Ogbonna added that the synergy with the parent company is expected to yield long-term returns. “Projections for 2025 are robust, and the business is already showing strong momentum in H1. While Nigeria is our launchpad, Hydrogen has pan-African ambitions.”

Hydrogen’s product play and strategic push

An Access Holdings spokesperson told TechCabal that the launch of the Hydrogen Payment Gateway in 2024, alongside enhancements in payment card security, fueled transaction growth across switching, merchant collection, and payment infrastructure services.

Hydrogen processed ₦49.1 trillion ($30.6 billion) in payments in 2024, a 313% increase from the previous year, and generated ₦10.3 billion ($6.4 million) in revenue.

“This growth underscores the shifting dynamics in Nigeria’s financial services space, where banks and fintechs are evolving from rivals to collaborators,” the spokesperson said.

How regulation spurred the bank-fintech pivot

The emergence of bank-owned fintech arms like Hydrogen and HabariPay follows the Central Bank of Nigeria (CBN)’s 2010 directive requiring commercial banks to restructure into holding companies to offer non-banking services like payments.

This regulatory move paved the way for traditional banks to spin off licensed fintech subsidiaries and compete more directly with independent players like Flutterwave, Paystack, Opay, and Moniepoint.

GTCO was the first Tier-1 bank to respond, launching HabariPay in June 2022. Since then, it has become a profitable fintech focused on SMEs and retailers, offering payment collection through its Squad platform via POS, USSD, virtual accounts, and web gateways.

Access Holdings followed with Hydrogen in September 2022, initially positioning it as a backend infrastructure provider serving other fintechs, banks, and telcos, rather than a direct-to-consumer player. When it launched, the firm reported a ₦612 million ($ 386,308) loss in Q1 2023 but swung to profitability by Q4 of that year.

Despite Hydrogen’s profit surge, HabariPay remains Nigeria’s most profitable bank-owned fintech. But the race is tightening as both platforms scale rapidly.

“Mostly, they just leverage their existing users to adopt their fintechs,” said Babatunde Akin-Moses, CEO of lending startup Sycamore.

In 2024, HabariPay processed ₦27.4 trillion ($17.1 billion) in transactions, representing a 124.6% year-on-year increase. During GTCO’s April investor call on April 3, Segun Agbaje, GTCO’s  Group CEO, said the company will double down on PoS terminal deployments to expand Squad’s reach in 2025.

“Our investment in technology has significantly increased,” Agbaje said. “ While we’ve always acknowledged its importance, we’re now accelerating our efforts—and it’s clearly starting to pay off.”

Outlook: Can Hydrogen catch up to HabariPay?

Analysts say if Hydrogen maintains its current trajectory, it could emerge as Nigeria’s most profitable bank-owned fintech by the end of 2025, potentially overtaking HabariPay.

“Hydrogen is a strong contender in the fintech space, showing impressive growth and surpassing key competitors,” said Abimbola Adewale, a Lagos-based analyst. “Its expanding customer base and transaction volume point to a solid long-term outlook.”

As legacy banks transform into digital-first players, Hydrogen’s breakout quarter could mark the beginning of a new phase in Nigeria’s fintech wars—where balance sheet strength and regulatory alignment become critical differentiators.

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