THREE years ago, it would have been practically impossible to believe that you can get easy access to money anytime, anywhere without necessarily visiting the conventional banks out there. But all that has changed now, thanks to the advent of electronic payment channels offering mobile money transfer. In fact, with this kind of innovative payments, it is absolutely right to say we are beginning to witness democracy of money!”
The above short anecdote is a testimony by Balogun Adebowale, an upwardly mobile executive who is simply bowled over by what he describes as the fast-pace services of these firms offering mobile money transfer services in the country today. Adebowale is not alone.
Jokojeje Akinpelumi, a real estate consultant, agrees that many people out there have also caught the bug. According to him, “For many set of people, all forms of transactions either airline booking, payment of utility bills, school fees, shopping, cable TV subscription, top up electricity metre, recharge cell phones, etc, can be done at the comfort of their homes, offices, and in fact, anywhere, without necessarily breaking a sweat!
“Innovative payment systems via mobile phones and several other channels have made things a lot easier for mankind. You don’t have to face the drudgery of staying in the queues at the banks for hours on end. Now you can simply use your mobile phone with internet device wherever you may be to access cash anytime.”
Is mobile money a growing fad in Nigeria?
Tayo Oviosu, Chief Executive/Founder, Pagatech, the owners of the flagship product, paga, the first mobile money company in Nigeria, recalled that it began out of frustration with having to carry cash around all the time in Nigeria.
“Nigeria is a very cash-driven society. Only about 20% of the population have access to what you might call formal financial services. Even for the banked set, there are infrastructure issues to contend with – roughly 60% of ATMs in the entire country are located in Lagos State; debit cards are not accepted by most merchants. As such you have to carry cash with you,” he said.
“Additionally, there is no safe and secure way to send money within Nigeria outside of the banking sector. Carrying cash around with you everywhere, even sending cash to your family by paying a fee to the local bus driver clearly has its limitations not forgetting security issues.”
While commenting on the operation of mobile money transfer services, the Head, Shared Services, CBN, Mr. Chidi Umeano, recently disclosed that as at January 2012, mobile money services in Nigeria recorded 35,971 transactions worth N227.92m.
Lending credence to the foregoing, Eniola Ogunmola, a staff at Pagatech, in an interview with The Nation, disclosed it controls over 80 per cent share of the mobile money market in the country.
“We can confidently say that more than 80% of those transactions were recorded by Paga. Right now, there is no doubt in our mind that Paga is the market leader when it comes to money transfer services in Nigeria. We are working effortlessly to ensure that our service remains reliable and we serve the need of our customers.
“Our goal is to have 15 million active users and 30,000 agents by 2015. We are right on track to achieving this and we have a team strategically placed in various cities in Nigeria working diligently to achieve this goal.“
Security of mobile money transfer
Most Nigerians who have fallen prey to scammers with their ATMs, remain skeptical of innovative payment channels.
While assuring prospective customers of the security of their systems, Oviosu said: “At Paga, security is our top priority. We have created rings of security to prevent the chance of any fraudulent activity, each channel we offer having its own security framework – some visible to the customer, many others not visible. For example, you must confirm every transaction you do on Paga by entering your PIN number.
“We train our customers to not share their PIN with anyone, even with Paga representatives.
ICT pundits are very optimistic that the confluence of mobile
penetration growth, latent demand for financial services, expansion of Nigeria’s middle class and of Nigeria’s economy to become the largest economy in Sub-Saharan Africa will drive growth in the sector in Nigeria and indeed Africa.
Mobile money in other parts of Africa
It is however instructive to note that mobile money transfer has also gained momentum in other parts of Africa.
In Ghana for instance, Airtel Money, has been adjudged the best mobile money service. It has been praised by industry players for its innovative features and secured nature has been expanding over the past few months roping in more banks and business outlets in the process.
Managing Director at Airtel Ghana, Philip Sowah said "We have developed Airtel Money as a product tailored to meet the needs of our customers. As you may know, Airtel Money is the only mobile commerce product which customers are able to link to their banks and are thus able to undertake banking transactions via their mobile phones".
Mr. Sowah added that "the list of partners for Airtel Money is also growing taller every day. We have several banks partnering with us as well as a host of other business outlets."
The Airtel Money service allows customers to pay utility bills, goods and services, make direct payment for savings and loans contributions, buy airtime, purchase Airtel data bundle, send money from Airtel Money account to other Airtel money customers, send money from Airtel Money account to people on other networks, receive money on Airtel Money account, deposit physical cash for electronic money (e-value), withdraw cash from Airtel money account, send money to and withdraw money from bank account, and use mobile phone to check your bank balance and request for bank mini statement.
Viability of local mobile money transfer services
In the view of stakeholders, there are evidence of viability of mobile payments in other regions of the world. For example, probably the most well-known and most successful – M-PESA, a mobile payments company in Kenya, was able to reach 13 million customers by its fourth year of operations (33% of the total Kenyan population and about 70% of the mobile subscribers).
The Nigerian money transfer market is expected to grow exponentially in the next few years. The growth, according to analysts, will be driven by various factors which include the increasing mobile phone penetration, poor quality of existing alternatives, and the general growth of the Nigerian economy.