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The Evolution Of Banking & How It Will Impact Business, Social Conduct

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Omokehinde Adebanjo

In this piece, Omokehinde Adebanjo, Vice President and Area Business Head for West Africa for Mastercard, looks at the evolution of banking and how it will impact business and social conduct, especially in Africa.

It will come as no surprise that banking has changed dramatically: advancements in technology and increased uptake of mobile have seen us move to a world beyond cash, where the potential to create solutions that make payments faster, simpler and safer than ever before is massive.

This is particularly true in Africa, where digital payments have acted as drivers of growth and financial inclusion.

The sheer value of digital and mobile solutions cannot be underestimated, both in terms of streamlining business processes and its ability to bring the continent’s citizens into the financial mainstream for the first time in their lives.

Research carried out by McKinsey, for instance, found that digital finance solutions have the ability to lower the cost of providing financial services in emerging economies by between 80 and 90 percent – illustrating the power of technology in overcoming social and economic challenges.

In order to unlock the full potential of digital solutions in driving inclusion and improving business and social conduct, Mastercard has partnered with governments, businesses, civil society organisations, merchants, developers and other pioneers to implement payment solutions that will make a real difference to businesses and their customers across Africa.

The continent has seen the introduction of a broad range of new technology that has revolutionised the way they transact and use their money.

Masterpass QR, for instance, has been launched in 33 markets in Africa and is expected to help bring 100 million Africans into the formal economic fold by 2020. As the largest implementation of a digital payment solution so far, Masterpass QR has acted as an enabler of the biggest engines of development and growth in Africa: micro, small and medium enterprises (MSMEs).

MSMEs account for almost 50 percent of GDP in Nigeria, and approximately 70 percent in Ghana, showing the importance of these types of businesses in West Africa and the need to facilitate and streamline their operations – which is precisely what Masterpass QR was conceptualised to do.

First introduced in Nigeria, the mobile-driven Person–to-Merchant (P2M) payment solution solves the problems that millions of MSMEs and their customers have faced for years.

The simple and secure application removes the need for expensive point-of-sale infrastructure for MSMEs, while simultaneously eliminating the need for customers to carry cash in order to pay for the goods or services they purchase.

Instead, the solution harnesses the power that the majority of African are already carrying around in their hands – the mobile.

Further taking advantage of the popularity of mobile is the MPOS solution in Nigeria. It enables merchants in the MSME sector to accept efficient and safe mobile payments from customers that previously paid with debit, credit or prepaid cards.

The solution marks the evolution of the payment ecosystem by effectively turning smartphones into point-of-sale terminals, making it easier for customers to make payments than ever before.

MPOS and Masterpass QR are just two examples of solutions that are already changing lives, in terms of the way business is done and in solving challenges that have prevented financial inclusion – and they only mark the tip of the iceberg in Mastercard’s journey to remove the barriers that keep Africans excluded from the financial mainstream.

As long as cash remains the biggest obstacle to financial inclusion, Mastercard will continue to partner with like-minded individuals, businesses and governments to introduce solutions that change that.

It is only through collective action and a commitment to transformation that any difference can be made.

Mastercard is well aware of this, and has dedicated extensive resources and time to ensure that measurable growth is achieved through consistent advancements in payments.

Africa is undoubtedly a continent of both challenge and opportunity: its people remain hindered by a lack of inclusion – the fact that only 34.2 percent of adults have an account is stark testament to this – but at the same time, companies have recognised the need for proactive change and are working to ensure that that statistic is brought down and that all citizens benefit from more accessible, effective and secure financial tools.

 

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world.

So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

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E-Financial

Bitcoin Smashes Through $8,000 for the First time

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Bitcoin hit a new record high on Monday after smashing through the $8,000 level for the first time over the weekend, marking an almost 50 percent climb in just eight days.

The new high came after leading U.S. payments company Square Inc said late last week that it had started allowing select customers to buy and sell bitcoins on its Cash app.

Bitcoin traded as high as $8,197.81 on the Luxembourg-based Bitstamp exchange, up over 2 percent on the day and around 48 percent up since dipping to $5,555 on Nov. 12.

An eye-watering eightfold increase in the value of the volatile cryptocurrency since the start of the year has led to muliple warnings that the market is in a bubble, and institutional investors are broadly staying away.

Retail investors, however, as well as some hedge funds and family offices, are piling into the market. The “market cap” of all cryptocurrencies hit an all-time high of over $242 billion on Monday, according to trade website Coinmarketcap.

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ePayment Stakeholders’ Seek Review of Policy on PoS to Boost Growth

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Worried by slow pace of growth in the use of Point of Sale terminal (PoS) as a means of payment in the country, stakeholders have called on Central Bank of Nigeria (CBN)to review its policy direction in that ecosystem.

 

This is coming as Nigeria CommunicationsWeek investigations revealed fluctuations in the figure of registered and deployed terminals between August and October this year.

 

According to a report released by NIBSS the industry Payments Terminal Service Aggregator (PTSA), the number of deployed  terminals increased in August to 141, 531 and dropped to 140, 448 in September and increased again in October to 145, 350.

 

Also, same was noticed on the number of registered terminal with August recording 173, 815 and came down to 169, 318 in September while October witnessed increase to 176, 185.

 

Sarafadeen Fasasi, president, Association of Mobile Money Agents in Nigeria, attributed this slow growth to a number of factors which includes lack of support to drive the business.

 

“Support I mean is providing financial backing for transactions on the PoS just the way ATMs are loaded with cash for withdrawals. Today, there are no facility for PoS agency business by the banks which is the major determinant of success or failure of PoS innovation,” he said.

 

He decried lack of structure on ground to resolve issues arising from PoS transactions.

 

“If customer’s account is debited without ATM paying, the individual will go to the bank and fill form for reversal, but in PoS transactions there is no such thing which has pushed customers to resolve to holding on to PoS attendant to ensure that the issue is sorted out. As at today, all issues arising from ATM, switching, PoS, online among others, are under NIBSS which does not have the capacity to coup with these issues,” he said.

 

He however, urged CBN to review her policy on PoS for it to witness the desired growth, such review he said could come in creating a unit to address issues arising from PoS transactions.

 

“If the policy is reviewed it will build trust and confidence in the use of the platform for payment. More so, PoS fixed charge is high at .075, this means that customer is charged N750 on N100,000 transaction compared to N65 charged on withdrawal outside of customer’s bank ATM,” he added.

 

Onajite Regha, executive secretary/CEO, E-Payment Providers Association of Nigeria (E-PPAN)said: “So far, E-PPAN in its advocacy nature has taken steps ahead to break the barrier of this poor adoption. We are looking into capturing the lower part of the pyramid with the mobile payments awareness which will see more people included financially and thereby increase the adoption of the Cashless policy.”

 

“We are also open to discussions on advocacy and sensitization from financial bodies who have products and services to render in the pursuit of the success of this policy. From time to time we carry out sensitization, financial literacy and education programme and we partner with stakeholders to expose the benefits of electronic payments to consumers across the strata”.

 

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Africa FinTech Foundary set to Disrupt FinTech Ecosystem

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L-R: Victor Etuokwu, Executive Director, Personal Banking, Access Bank Plc; Averi Thomas-Moore, Company Builder, Venture Lab, ACCION and Victor Okigbo, Head, Africa Fintech Foundry (AFF) at a press conference to announce the maiden edition of ‘AFF Disrupt’ Conference 2017 in Lagos.

Africa FinTech Foundary, an Access bank accelerator which seeks to create new opportunities in sub-saharan Africa by providing a platform designed to inspire and challenge African innovators and entrepreneurs is set to launch with a conference on FinTech ecosystem.

The conference dubbed ‘AFF Disrupt’ is scheduled to hold on December 14, 2017 in Lagos.

Victor Etuokwu, executive director, Access bank, said that AFF will provide African companies seeking to launch their products, with capacity building and training in business development, provide connectivity to global innovation grids, promote access to capital, create opportunities for partnership as well as showcase best practices and successes in African-led innovation solution.

“Every FinTech seeks to disrupt the world through product or solution and AFF is here to disrupt. We want to do things that will drive the economy through innovative products and solutions. We are going to gather a team of investors that will help fund innovators that graduates from the accelerator programme of AFF,” he said.

Victor Okigbo, head, Africa FinTech Foundary (AFF), said that the Foundary has lined up activities preceding the main launch event which include master classes on entrepreneurship technology, enterprise design, collectively referred to as the AFF Innovation Tour, holding in four African cities this November.

He said AFF is in partnership with global technology giants such as IBM, Microsoft, Systemic Logic, Kantar TNS, SAS and Access bank as part of the AFF Disrupt programmes.

Adekele Adekoya, Event Coordinator for the AFF Disrupt conference, said that AFF seeks to create new opportunities in sub-Saharan Africa by providing a platform designed to inspire and challenge African Innovators and entrepreneurs.

“We want to engage with startups in all the locations we visit. This is a very good opportunity for startups to take advantage of the partner network created by AFF DISTRUPT and its partners to create linkages and networks that can help grow their businesses,” he said.

The vetting process is currently going on, and a total number of 12 starts-ups would be selected from a pool of about 400 start-ups, to demo at the AFF Disrupt 2017 conference holding in Lagos and also get to be part of the Africa FinTech Foundary’s 3-month accelerator programme.

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