Operators, Customers Play Hide and Seek Over Mobile Money

Mobile money services touted as the next big thing in e-payments eco-system, is still at an all time low in the country no thanks to seeming sluggish rollout, Nigeria CommunicationsWeek investigations have shown.

Experts in the e-payment industry have lamented the hide and seek nature in which operators are going about the roll out of the services said to hold as much as N1.13trillion potentials by 2015.

Ms. Henrietta Bankole-Olusina, head, Payment and Mobility Practice, Accenture Nigeria,  decried  the delay by operators to launch the service and the reluctance of customers to buy into it.

According to her no significant adoption of mobile payment services had occurred in the country, despite  the Central Bank of Nigeria’s licensing of over 20 mobile payments service providers.

She said while operators were waiting for customers’ buy-in before service roll-out, prospective mobile money users were also waiting for service roll-out before buy-in.

As such, she said mobile money transactions had remained low in the country, while only four of the 20 licensed Mobile Payment Operators had interoperability.

Bankole-Olusina said there was an opportunity to grow the use of mobile to meet the requirements of all stakeholders in the mobile payment landscape in Nigeria in support of the cash-less initiative.

Emmanuel Okoegwale, principal associate, MobileMoneyAfrica stated that: “In a normal mobilemoney setting, agency activation precedes customer sign- up but we are seeing the opposite.”
“Around Africa, MobileMoney is moving from alternative channel to becoming main channel of providing basic financial services and payments services for the banked and unbanked. Adoption is growing at exponential rate in East Africa and some parts of Southern Africa but we are yet to see that in Nigeria.”

Way Out
But she insisted that the success of mobile payment in the country would not be based on only technology or connectivity, but on the business model.

Bankole-Olusina identified the country’s mobile money industry’s challenges to include lack of interoperability; fragmentation of the mobile payment market; duplication of infrastructure and processes; large un-banked population and unprofitable rural expansion; and lack of proper loyalty programmes.

She, however, said all hope was not lost in that there were opportunities in the face of the challenges.

The opportunities, according to her, include new business models for profitable rural expansion; mobile channel strategy; and loyalty/reward programmes, among others.

“Although the use of cash will not disappear, mobile payment service providers in Nigeria need to focus on distinct areas of innovation, such as ultra-convenient banking, digital commerce, new markets/segments, and new business and operating models,” Bankole-Olusina said.

She predicted that the consolidation of existing licensed players as a result of competition was a possibility in the nearest future.

She said, “We expect that the potential size of the Nigerian mobility market should attract further competition from external global players/operators. Competition will ultimately drive down service costs, increased innovation and convenience for customers and establish mobility as key cash-less channel.

“The CBN/regulators must continue to encourage mobility by providing an enabling, trusted and secure environment for mobile payment.”