Ben Uzor Jr
Nigeria may indeed be positioning herself to become the largest mobile payment market in sub-Saharan Africa, analysts said at the weekend. According to the analysts, there are only 22 million individuals who have a bank account out of the 150 million people but there exists about 90 million mobile phone users, which provide huge opportunity for the development of mobile payment.
M-payment through mobile phones, however has been identified as a viable tool to provide basic financial services to millions of unbanked populations in urban and rural communities in Nigeria, and will become a booming industry. Analysts say that Nigeria was gradually moving towards the era of mobile payment system as operators and the regulator make every effort to sustain the shift from card-based transaction to mobile-based transaction.
Emmanuel Okogwale, principal consultant, Mobile Money Africa told BusinessDay at the weekend that mobile payment market looks interesting and will thrive to become the largest market in Africa depending on the collaborative efforts of the stakeholders. “I see strong internal migration driving mobile remittances, strong compelling services like agency banking for the underserved communities.
“Depending on the numbers of final licensees in Nigeria, the market looks promising for potential players. The stakeholders should endeavor to build a shared agent network to serve all the stakeholders. Since agency is the heart of mobile financial services and the agents do not sell primary products of the licensee unlike in MNO driven ecosystem.
There is a need to source, develop, train and deployed agents on a shared basis. Only recently, the Central Bank of Nigeria (CBN) issued additional seven approvals in principle (AiP) to prospective mobile payment service providers in the country. The issuance of the seven new AiPs takes the number of approvals to 23. Some of the companies included in the latest bazaar are Zenith Bank, MoneyBoxAfrica and Zinternet. The names of the other companies were not available at press time yesterday.
There are speculations that VTN and Hendomark made the list. Meanwhile, an informed source close to MTN told Business Day at the weekend that the telecom company’s would match the achievement of M-PESA service, offered by Kenyan telecoms operator Safaricom. With about 14 million users representing 81 percent of Safaricom’s customer base in Kenya – M-PESA is described by the GSM Association, a global body representing the interests of mobile operators, as the world’s most successful m-payment service.
According to our source, the telecom firm intends to apply lessons learnt in markets where it has rolled out the service such as Uganda to succeed in Nigeria. In Uganda for instance, after one year of rollout, MTN’s payment service exceeded that of M-PESA at the same stage. A key factor in the Ugandan success is marketing through 2500 representative.
Our source said that MTN strongly believes direct contact and educating telecoms subscribers are critical to growing the mobile payment service. Also important is easy access to cash remitted to users, or enabling them to convert cash into e-money which was achieved in Uganda through agents such as village shop owners, the source further disclosed.
Tayo Oviosu, CEO, Pagatech, an electronic financial services firm and one of the firms given the approval in principle by the Central Bank, said given the poor number of Nigerians, mobile payment and banking takes advantage of the wider coverage by mobile phones.
“There are very few people that have formal access to financial services, only about 20 per cent of Nigerians have access to formal financial services and 90 per cent of the bank accounts have less than N5000 in their accounts. This shows that majority of the money in Nigeria is outside the banking industry and this poses a very real challenge to banks today. They open bank branches everywhere, yet the issue remains unaddressed”.
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