The Interswitch Story: From Telnet to Helios

In the third episode of Africa Built, we begin a two-part series on Interswitch.

This episode traces the company from the engineers who built Nigeria’s first bank networks in the 1980s to the December 2010 exit of the founding consortium.

In 2002 Nigeria had roughly 90 banks. 7 of them offered ATM services. The whole country held 68 ATMs and about 1,800 POS terminals for 120 million people, and a transfer took three days to settle. Most banks could not connect to each other. Most could not connect their own branches to each other. Your money lived at the branch where you opened the account, and on Fridays the country queued for enough cash to survive the weekend.

None of that was a technology problem. Société Générale had a working ATM in Lagos around 1989. The machines existed. What did not exist was any secure reason to move money and trust the word of another bank especially as you had good cause to believe they may go bust the next day, in a country that had watched forty-five banks fail. Interoperability required trusting your competitor’s solvency, and nobody did.

The company that solved it was incorporated in 2001, switched on in 2002, and cleared its first interbank transaction in October 2003 for ₦1,000. This episode is about the twenty years of engineering that made that possible, and the eight years between that ₦1,000 and the day Helios bought two thirds of the company.

We look at where the famous founding story came from, what the most likely story is, and how Interswitch succeeded in connecting the banks to communicate with each other, and build a network every financial services player in the country now runs on.

Main Topics

• The ATM in Scotland, where the story came from
• TCASS, Telnet, and the twenty years of bank networking that came before Interswitch
• Why Nigerian banks in 2002 would not connect to each other, and what it cost the country
• The founding: seven banks, Accenture, Techinvest, ₦200 million
• PayDirect, WebPay and Quickteller, and why the products were loved and hated at once
• ValuCard, ePurse and eTranzact, the other answers to the same problem
• The Helios investment into the company

Notable SMEEIS beneficiaries include: Tinapa Business Resort, 3 Peat Investment, Hygeia HMO, CSCS, CRC Credit Bureau, Paga, Terra Kulture, Omatek Computers, Cyberspace Limited, Zain Mobile.

Note: The analysis here is based on publicly available data, market reports, and expert commentary. This content is for entertainment and educational purposes only and should not be taken as financial or legal advice. We’d love to hear from you — email africabuiltpod@gmail.com with feedback and commentary. Thank you.