E-Financial
MM Schemes Achieve N300m in January
Transactions across the various mobile money (MM) schemes in the country hit a record N300 million as at the end of January, underscoring a tipping point in the shift towards the cashless society, Nigeria CommunicationsWeek can now reveal.
The value was achieved in over 12,000 transactions and did not include transactions carried out within individual networks.
Though, a marginal increase of N50million over the value for November last year when value stood at N250million exchanged in 10,000 deals; it however showed the increasing ability to replace cash with digital money transferred via mobile phone.
Nigeria CommunicationsWeek gathered that the ability of a mobile money user of a mobile scheme to send money directly to the wallet of a user on any other service provider was made possible by connectivity service being provided by National Central Switch (NCS) that is offering the handshake.
Without interconnectivity the difficult decision of which mobile money service to choose might be influenced by which members of the customer’s peer group are already using a given service.
Emmanuel Okoegwale, Principal Associate, MobileMoneyAfrica, said, that there are only 47 Mobile Money deployments in West Africa out of 100 deployments in Africa.
According to him, Africa continent has shown great promise in the mobile financial services sphere but yet grapples with millions that are actively unbanked across all regions.
“Financial inclusion has become the buzz word within the regulatory, policy, financial, innovators, and technology circles and in the formal financial services space but significant barriers still stand in the way of reaching the bottom of the pyramid in Africa.” He added.
Okoegwale however stated that: “Nigerians should expect a much more aggressive roll out of services as collaborations deepen between licensed providers and Mobile network operators and other industry ecosystem players as we have seen with MTN / Diamond bank.
He also said that “Affordable and stable mass access channels like USSD and STK becoming more available and cheaper to use which in turn will scale up adoption since mobile money is a mass market product and should be immediately compatible with all mobile devices. Agency growth and spread will be the most significant achievement in 2014 as more formal retail distribution outlets step into mobilemoney and agency banking services to lower their transaction cost and reduce cash at hand in their outlets. Generally, the outlook for mobilemoney in 2014 is positive and encouraging based on the developments that we recorded in 2013”.
According to him, a recent report released by African Development Bank, on Financial Inclusion in Africa, finds that technological advances such as mobile money innovations have started to make inroads into banking the unbanked in Africa, with 14% of adults reporting they have used it in the past 12 months in comparison to less than 6% of adults in all other regions globally that used mobile money in the past year.
The African Development Bank predicts technology could be a “game changer” in drawing the financially excluded into the formal banking world.
Brian Larsen, Managing Director, Chams Mobile, identified major challenge of mobile financial services as network connectivity that has lead to both high costs for each transaction and high fixed IT costs.
He explained that current financial schemes such as mobile banking depend on network connectivity, making the network indispensable.
Chalapathi Rao Immidi, director, Business Development, mFino, said financial inclusion helps to make basic, essential services and utilities like energy, health, education, and water more accessible to people at the bottom of the economic pyramid.
“Access to affordable financial services helps in overcoming poverty, reducing income disparities, and contributes towards overall social and economic development,” he said.
According to him, some of the barriers to adoption of Mobile Financial Services include limited interoperability, where less than 20% of the products are fully or partially interoperable. Stringent regulation, where there is need to provide status for electronic transactions, flexibility in the application of CDD requirement for technology base solutions.
It would be recalled that transactions among mobile money schemes commenced in March last year after the expiration of the deadline of February 28 Central Bank of Nigeria (CBN) gave to operators to connect to National Central Switch (NCS) that is offering the handshake.
Presently, there are 16 companies licensed by CBN to operate mobile money transactions.
The CBN had said that the MMOs were licensed to accelerate the transformation of the nation’s payment system which would emphasis use of mobile phones.
Titan Trust Bank has selected Oracle FSS for its core and digital banking technology, it is understood.
The start-up bank recently obtained its license by the Central Bank of Nigeria (CBN).
It’s understood that Temenos and Infosys also competed for the deal.
The shortlist came down to the two most widely installed international core systems in Nigeria, Infosys’ Finacle and Oracle FSS’s Flexcube.
The Nigerian banking sector has seen a great deal of upheaval over the years, with many mergers, start-ups and closures. Flexcube is a well respected name since the late 1990s (the pioneer was Access Bank, now one of the country’s top five banks) and has been a commonly selected platform since then.
The new bank is believed to be one of five to have gained regulatory approval of late (Globus Bank is another).
Local media sources say the new licences stem from the Central Bank’s desire to attract new investments into the sector and better serve the country’s 50 million+ unbanked and under-banked citizens.
Titan Bank is said to be headed by a former executive director of Heritage Bank (which is a Finacle user).
Oracle FSS did not respond to request for comment.
International Monetary Fund (IMF), has appointed Tony Elumelu, Nigerian billionaire and group chairman of Heirs Holdings, owners of United Bank of Africa, to its advisory council on entrepreneurship and growth, convened by Kristalina Georgieva, the fund managing director.
The announcement was disclosed in a statement on Friday.
According to the statement, the IMF advisory council comprises global business leaders, policymakers, and academics dedicated to identifying and addressing regulatory barriers to entrepreneurship.
The IMF said Elumelu will be instrumental in ensuring that Africa’s entrepreneurship is central in policy making.
“Elumelu, Africa’s leading advocate of entrepreneurship and whose Foundation has funded, mentored, and trained over 25,000 African entrepreneurs since 2015, champions entrepreneurship as the engine for the economic transformation of Africa,” the statement reads.
“A self-made entrepreneur, Elumelu’s embracing of entrepreneurship is fundamental to his concept of Africapitalism, his belief that Africa’s private sector can and must play a leading role in the continent’s development, making long-term investments that deliver social and economic value.
“Elumelu will be instrumental in ensuring that Africa’s entrepreneurial potential is central to global economic policy making.”
Speaking at the inaugural meeting of the advisory council on March 26, Georgieva said the appointees would share their experiences on how macroeconomic and financial policies “can provide a supportive environment for innovation, entrepreneurship, and productivity — key ingredients for a thriving private sector and strong economic growth”.
Africa’s Micro, Small, and Medium Enterprises, fintech industry, scaling remittances, and cross-border payments will be the driving forces behind the continent’s digital ballooning payments system, which is estimated to reach $1.5 trillion by 2030.
This is according to a MasterCard-commissioned study by Genesis Analytics, which states that the digital payments economy is growing faster on the continent.
This comes as the World Bank says Sub-Saharan Africa has shown significant growth in financial inclusion over the past decade, much of it driven by mobile money account adoption.
Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at MasterCard, comments: “Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead.
“MasterCard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future.”
The payment technology company went on to say as a longstanding technology partner to Africa, its continues to strengthen its commitment to the continent’s digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth.
In addition, it says trends in Africa signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region.
“For over five decades, MasterCard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development.
“With Africa projected to host nine of the world’s 20 fastest-growing economies, we are focused on leveraging our expertise and a technology to support the continent’s continued digital transformation.
“Our investments today will help build a more resilient economy for the future,” says Mark Elliott, division president, Africa, MasterCard
By fostering collaboration with key stakeholders, MasterCard says it aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy.
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