Cardtonic needs to be a brilliant app for funds and e-commerce

In Nigeria, the colourful vacation season usually comes with an uncommon drawback: wasted present playing cards. A cousin in London may purchase an Apple Store voucher and ship it to a cherished one in Lagos, however with no official Apple retailer, that card turns into little greater than a shiny piece of plastic that sits unused till it expires.

This hole has quietly spawned a parallel financial system. As of 2024, Nigeria’s gifting industry is worth $2.1 billion and is projected to develop to $3 billion within the subsequent three years. Across the nation, present playing cards have taken on one other perform totally as a type of foreign money. 

A rising variety of folks desire to promote present playing cards for money, and middlemen—present card brokers—have stepped in to bridge the divide between overseas retailers and native realities.

Cardtonic, a Nigerian fintech startup, constructed its enterprise on that straightforward proposition: turning unused or inaccessible present playing cards into liquid cash. 

“The major issue was, people would get Nike or Adidas gift cards from their siblings abroad, and by the time it got to them in Nigeria, they didn’t know what to use it for. It just went to waste,” mentioned Oluwatomisin Oduyemi, Cardtonic’s development lead. “Our founders realised this was a problem that needed a solution.”

Building a enterprise out of waste

Founded in 2019 by Balogun Usman and Kayode Faturoti, Cardtonic—working underneath its authorized setup, The Tonic Technologies—began as a cryptocurrency buying and selling app earlier than pivoting to present card buying and selling. Seeing the dearth of utility round present playing cards in Nigeria, the startup got down to present an answer to curb wastage. 

Cardtonic positioned itself as a dependable dealer, the place customers might ship of their present playing cards, the startup validates them, after which offloads them to vetted companions who pay money in return to take the playing cards. 

That effectivity is central to its attraction. Some playing cards, recognized internally as “fast cards,” might be validated and cashed out inside 10 minutes. Others, similar to store-specific vouchers that require guide checks, take longer.

In January 2025, Cardtonic appointed Emmanuel Sohe as CEO, claiming it now serves multiple million customers. Yet solely round 500,000 to 600,000 of these customers are thought of “active”—clients who commerce present playing cards or use its different fee options at the very least as soon as a month. The startup additionally claims it processes 400,000 present playing cards month-to-month, emphasising that fast turnaround is its moat. 

“Over time, we’ve been able to optimise the transaction time from when you submit your cards to when you get paid, to about 10 minutes for the fast cards,” Oduyemi mentioned.

The enterprise comes with loads of dangers. Some playing cards merely don’t work. Customers ship in codes that prove to have been used already, others submit numbers that don’t exist, and with bodily playing cards, the digits typically get broken when the floor is scratched off. These issues are so widespread that Cardtonic retains a staff centered solely on high quality checks earlier than any fee is launched.

Fraud is one other a part of every day life on this market. Scammers pose as firm workers, attempt to hack into person accounts, or trick folks into handing over their codes. And as soon as a present card code is stolen or redeemed elsewhere, the worth is gone for good. 

“Whenever you’re dealing with digital assets, there will always be an issue of authenticity,” mentioned Oduyemi.

To cut back the dangers, Cardtonic requires two-factor authentication on accounts and recurrently warns clients to maintain their playing cards safe. The startup has additionally been pushing product training, telling customers to not share their playing cards amongst associates to stop theft.

The economics of arbitrage

Cardtonic’s enterprise runs on skinny margins and fixed balancing. At its core, the corporate buys present playing cards at a reduction and resells them to companions at a mark-up. Profit will depend on quantity and the unfold between purchase and promote charges. But these spreads are tied to alternate charges and demand cycles, which makes them unpredictable. A pointy swing within the naira-dollar fee can flip what seemed like a worthwhile commerce right into a loss.

“Some specific gift card trades might not be the most profitable for us,” Oduyemi admitted. “If the rate fluctuates between when a user sends in a card and when it is approved, sometimes we still have to make up the difference.”

That fragility explains why the corporate depends closely on human oversight—the corporate employs about 120 staff. Cardtonic wants workers to vet playing cards, assign trades to the appropriate companions, and deal with disputes in circumstances when present playing cards fail the validity test. This makes the enterprise labour-intensive than typical fee fintech platforms, which rely upon automation.

“There are many things that cannot just run on autopilot,” Oduyemi mentioned, contrasting the mannequin with crypto platforms the place blockchain finality locks transactions immediately.

Yet Cardtonic claims the numbers add up. The firm has been self-funded from the beginning and says it has been worthwhile for years, although it declined to reveal income. It additionally has no instant plans to lift exterior capital. 

“We’re not looking to raise because we have not seen a very strong reason to,” Oduyemi mentioned. “We’re profitable, sustainable and conservative to a good extent. [Raising external funding] is not top of mind.”

That stance displays the character of the enterprise: money is available in with each commerce, and development stays a perform of increasing transaction quantity relatively than burning cash on scale. But it additionally suggests limits; with out contemporary capital, Cardtonic’s enlargement into new markets and new verticals will probably stay measured relatively than aggressive.

Gift card buying and selling falls on no man’s land

What complicates the image is regulation. While crypto and cellular cash are carefully monitored by Nigeria’s Central Bank, present card buying and selling falls right into a much less outlined area. 

Cardtonic says it complies with anti-money laundering (AML) measures and is pursuing licences the place required, however the enterprise nonetheless exists in a gray space; one foot in fintech, one other in a casual world commerce.

This lack of readability may very well be each a blessing and a vulnerability. On one hand, it permits the corporate to scale with out the burden of heavy compliance prices. On the opposite, it leaves Cardtonic uncovered to sudden regulatory shifts, very similar to the clampdowns that compelled it to spin off its early crypto product right into a separate app.

From present playing cards to “super app”

As competitors in present card buying and selling intensified, Cardtonic sought to broaden its choices. Today, the app additionally sells present playing cards instantly, processes invoice funds, points digital greenback playing cards, and runs an e-commerce gadget market. The startup calls itself an “all-in-one payments app,” with present card buying and selling and greenback card streams offering the majority of its income.

The most vital of its newer merchandise is the digital greenback card, which it launched in 2024 to allow Nigerians to pay for worldwide subscriptions and e-commerce purchases. 

Cardtonic prices a card creation price of $1.5—cheaper than another greenback playing cards out there—and cross-border prices on non-USD transactions as utilization will increase. Oduyemi mentioned the pricing transfer was deliberate.

“What’s the point of releasing a card that is pricey and only a few people can access? Then what solution are you solving?” she requested rhetorically, referring to Cardtonic’s digital greenback card product.

Yet, with legacy banks now enabling worldwide funds on native naira playing cards, it throws the sustainability of digital greenback playing cards into query.

Cardtonic’s different companies stay secondary. Bill funds, for instance, depend on licenced companions relatively than in-house infrastructure. Just Gadgets, Cardtonic’s asset-light gadget market, features extra as an add-on to the core enterprise. The platform sources stock from third-party distributors whereas Cardtonic handles supply by means of logistics companions. With this transfer, the fintech startup performs the connector function, relatively than a full-scale e-commerce enterprise, in hopes of maintaining customers in its ecosystem.

The startup didn’t share particular income figures for Just Gadgets, however acknowledged it’s the smallest contributor to its earnings.

Marketing to the streets

Cardtonic’s buyer base skews towards younger folks. Many of them are college students and players of their 20s, drawn to the velocity and suppleness of incomes from flipping present playing cards. To attain them, the corporate leans closely on influencer advertising and marketing and music tradition. It has partnered with artists and skit makers, and even sponsors live shows.

“Our users are typically young people. They are street smart. They listen to certain types of artists, and that’s why we focus more on long-term partnerships in music and entertainment,” Oduyemi defined.

The firm has additionally tried to root itself locally in different methods. It runs an Upskill programme to coach younger folks in tech expertise, and says it’s engaged on a scholarship scheme to assist college students who may in any other case be unable to proceed their training. In May, it additionally launched Tonic Football Club, a grassroots challenge that faucets into Nigerians’ deep love of soccer whereas providing a pipeline for locating native expertise.

Together, these tasks double as model constructing and neighborhood outreach. They assist Cardtonic stay seen in a crowded fintech area the place belief and recognition are every thing, however in addition they spotlight the stress in its id: half formal monetary companies supplier, half youth tradition operator.

Cardtonic’s outlook

Cardtonic is launching worldwide invoice funds and eSIMs by subsequent quarter, whereas additionally eyeing enlargement into East Africa. It additionally needs to introduce contactless playing cards as a part of its push into on a regular basis funds. On the business-serving facet, Cardtonic plans to monetise its software programming interfaces (APIs), making it potential for different companies to supply present card buying and selling instantly into their very own companies out of the field. 

Cardtonic is constructed on arbitrage; changing the worth of worldwide present playing cards into native money in a market the place it competes with different startups similar to Glover, Dtunes, and Cardpadi.

As lengthy as present playing cards stay fashionable overseas and inaccessible at house, that mannequin has room to develop. Yet, the poser on whether or not Cardtonic can anchor a brilliant app, in a market crowded with better-capitalised fintech opponents, is one other query totally.

For now, it thrives in the identical area it started: taking wasted tokens of goodwill and turning them into usable cash. What comes subsequent will check whether or not that basis can assist one thing greater.

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