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Tag: mobile money

Making mobile money platform more attractive

The Nigerian Deposit Insurance Corporation’s (NDIC’s) plan to raise deposit insurance cover for mobile money subscribers to N500,000 is likely to boost the use of mobile money by account holders. Implementing the plan will enhance financial inclusion and make the banking platform more acceptable to customers, reports COLLINS NWEZE.

The dream of getting financial services to end users is being jointly pursued by the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and the Nigeria Communications Commission (NCC) via mobile money.

Mobile money refers to payment services operated under financial regulation and performed from, or via a mobile device.

But the NDIC has taken further steps to enhance financial inclusion by finalising a framework to extend deposit insurance cover to individual subscribers of the Mobile Money Operators (MMOs).

When approved, the deposit insurance cover of up to N500,000 for mobile money by the Nigerian Deposit Insurance Commission (NDIC) is expected to boost the use of mobile money by account holders.

“The rollout of the regulatory framework for mobile money payment services in Nigeria, is aimed at revolutionising the Nigerian payments system in tune with global development, as well as facilitating financial inclusion in the country. The development has led to the licensing of 24 MMOs.

• Ibrahim

“In order to engender confidence of the public in subscribing to the products of MMOs, the NDIC has considered as imperative, the extension of the deposit insurance to individual subscribers of MMOs in the form of `Pass-through Deposit Insurance,’’ said the Managing Director, NDIC, Umaru Ibrahim.

He said the framework for making the Pass-through Insurance Scheme operational, was being finanlised by the Corporation, adding that NDIC has guaranteed the payment of deposits up to the maximum limit in accordance with the law.

With mobile money, instead of paying with cash, cheque, or credit cards, a consumer can use a mobile phone to pay for a wide range of goods and services.

In 2008, the global market for all types of mobile payments was projected to reach more than $600 billion by 2013. In developing countries, including Nigeria, mobile payment solutions are deployed as a means of extending financial services to the unbanked or under-banked. This group constitutes about 50 per cent of the world’s population, according to Financial Access’ Report.

Analysts insist that financial exclusion persists because of the inaccessibility of the unbanked, mostly people in the lower strata of the economy.

The unbanked are often far removed from the centre of commerce which tends to lower their participation in economic transactions. Thus, a combination of low demand for financial services and prohibitive costs without commensurate returns, dissuade financial services’ providers, such as banks, insurance and pension administrators from establishing physical presence in these locations.

However, mobile technology and innovations in the financial services industry, coupled with the phenomenal growth in telecoms’ subscriber numbers, have altered this situation, as financial services providers continue to leverage the reach of telecoms networks to provide mobile money services to otherwise inaccessible locations.

The recent spate of agreements on mobile money services between financial institutions and telecoms networks – MTN and Diamond Bank, UBA and Airtel, Stanbic IBTC Bank, First Bank, Ecobank and Globacom, will doubtless ramp up the synergy that should lead to further growth in mobile money.

The M-Pesa example

Kenya has been adjudged successful in the implemtation of mobile money.M-Pesa, Kenya’s mobile money system, has been hugely popular and successful in that country. Today, M-Pesa has over 40,000 agents and 17 million users, equivalent to more than two-thirds of the country’s adult population, conducting more than two million transactions daily.

In 2010, Kenya had just 840 bank branches and 1,510 ATMs to serve a population of 47 million. M-Pesa, with its 40,000 agents, helped to plug the supply hole and provide access to financial services to ordinary Kenyans.

Micro finance institutions piggybacked on M-Pesa to penetrate remote areas very quickly without substantial increase in costs.

In other countries, a number of financial institutions seemed to have found the right mix to ensure successful deployment of mobile money.

Standard Bank (parent bank of Nigeria’s Stanbic IBTC Bank), for instance, has been successful with mobile money in Uganda, Tanzania, and South Africa.

Bank-led model

The bank-led mobile money model adopted by Nigeria may be slightly different from Kenya’s telecoms-driven model but the underlying peculiarities are broadly similar.

Access, costs, lower economic activities, and partnerships are common threads. The lessons of M-PESA are not lost though as mobile operators like MTN Nigeria are beginning to play more significant roles in mobile money.

CBN Vs telco-led model

The CBN said it avoided the implementation of the telco-led model in the mobile money operation to have full control of monetary policy operations. The policy, it said, would also enable it minimise risks and ensure that the offering of financial services are driven by organisations it licensed.

In the new guidelines, the CBN said the telco-led model, where the lead initiator is Mobile Network Operator (MNO), shall not be operational in the country. The apex bank said the overriding vision of achieving a nationally utilised and internationally recognised payments system necessitates strategies to bring informal payment transactions into the formal system.

This framework has identified two models for the implementation of mobile money services namely; Bank Led – Financial Institution(s) and/or its Consortium as Lead Initiator and Non-Bank Led. A corporate organisation duly licensed by the CBN as Lead Initiator.

“The CBN recognises the importance of Mobile Network Operator (MNOs) in the operations of mobile money and appreciates the criticality of the infrastructure they provide,” it said.

The CBN said a robust payments system is vital for effective monetary policy implementation and the promotion of economic efficiency. “The introduction of mobile telephony in Nigeria, its rapid growth and adoption and the identification of person to person payments as a practical strategy for financial inclusion, has made it imperative to adopt the mobile channel as a means of driving financial inclusion of the unbanked,” it said.

CEO, MTN Nigeria, Michael Ikpoki, said the network will focus on meeting the significant market demand for financial services and mobile content with an expected positive impact on data revenue.

“The success of Diamond Y’ello Account and other basic mobile money services is expected to lead to the adoption of more sophisticated mobile payment solutions such as bulk mobile payment designed for corporate organisations. This service makes it easier for organisations to send money in bulk to their suppliers, employees or other business partners without the beneficiaries necessarily having to own a bank account,” he said.

Mobile money providers are also expected not be shy to adapt and replicate what works in other places but continue to innovate and develop bespoke products and services to excite consumers and boost conversion rate.

Benefits to consumers

Some of the benefits to the consumer include security, convenience, accessibility, speed and ease of transaction, competitive charges, access to quality advisory services, and integrity of transactions; the customer literally carries his bank in his pocket or bag wherever he goes.

Other not-so-obvious benefits, which are nonetheless important, are better cash flow management, enhanced financial planning, and inculcation of sustainable savings habit, which boost financial security and comfort in retirement.

“Mobile payments, which I perform on my phone, help to reduce my travelling costs,” a farmer in rural Nigeria who uses mobile payment services said.

Mobile money also has the potential to galvanise economic activities, leading to higher socio-economic development, lower cost of transactions and reduction of cash handling costs, among other benefits.

Role of regulators

• Fatokun

CBN Director, Payment Systems Unit, ‘Dipo Fatokun, said apex bank believes that mobile money and agent framework is the frontier of cashless boom.

“Mobile money is the next thing expected to transform CBN’s cash-less policy. The apex bank believes that such initiative will aid both telecommunications and banking industries to further serve Nigerians better,” he said.

Nigeria’s telecoms subscriber base, put at 131 million as of September 2014 by the NCC, should play a major role in bringing the unbanked into the formal banking system.

With over 50 per cent of Nigeria’s adult population unbanked, mobile banking could be the catalyst that will help quicken the adoption of banking services by this critical segment of the population.

Offshore portfolio managers appear to be similarly persuaded and they are already positioning to take advantage of the expected growth in mobile money.

For instance, Carlyle Group, a US-based global alternative asset manager with $203 billion of assets under management across 129 funds and 141 fund of funds vehicles, recently acquired a $147 million (about N27 billion) minority stake in Diamond Bank, partly on the strength that the bank’s new mobile banking service “will help rapidly boost the lender’s customers and profits.”

July 22, 2015
Review mobile money model, says Airtel’s CEO

Managing Director of Airtel Nigeria, Segun Ogunsanya, has called for a review of the current mobile money model, saying a telco-led model will help expand retail banking, thereby driving financial inclusion in the unbanked segment.

Currently, telecoms companies are not permitted to provide their own mobile money services as the current model approved by the financial regulator, Central Bank of Nigeria (CBN), empowers banks to provide mobile money services, while telecoms companies play only a supporting role.

Ogunsanya, who spoke at the annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, said for the mobile money market to reach its full potential, it is important that restrictions on telcos’ activity in m-money are lifted.

He said Agency/Agent Banking, as well as mobile money can help deepen penetration in retail banking in the country, adding that the mobile money sector is rather slow at this time because they are led by banks.

“The overwhelming majority of the adult population is unbanked; however, mobile penetration is approximately 78 per cent. The market opportunity for mobile money is therefore vast. The number of mobile money transactions has increased at a rapid rate over the past three years – further adoption will be driven by increased awareness.”

Ogunsanya also advised that for banks to expand their retail footprints, they must seek to develop simple products, push for transparency and ensure that their products and services are relevant to the target segment.

Also speaking at the event, Chairman, Lafferty Group, UK and guest lecturer at the occasion, Michael Lafferty, said he is in support of retail banking becoming a profession, pointing out that retail bankers should be required to act in the best interest of their clients at all times.

“This means that retail bankers must be educated to a similar standard as accountants and lawyers, bound by a demanding ethical code and required to commit to continuing professional development,” he said.

Hosted by the President/Chairman of Council, Otunba (Mrs.) Debola Osibogun, the lecture attracted various chieftains of the banking and finance industry, top public officials, foreign diplomats, academia, as well as top executives of the organised private sector.

The CIBN annual lecture focuses on topical issues within the Nigerian economy and is aimed at highlighting key issues and ideas that would influence policy makers.

June 29, 2015
Mobile money will boost remittances, says WorldRemit

Senior Mobile Analyst at WorldRemit Alix Murphy has said mobile money will play a pivotal role in global remittances and help to reduce fees, improve speed and convenience for users. In an interview with The Nation, she says mobile money remains a key of financial inclusion and getting financial services to the unbanked. Murphy says there are two-and-a-half billion unbanked people in the world and that one billion of these people already have access to a mobile phone, a potential means of accessing financial services, reports COLLINS NWEZE.

For the Senior Mobile Analyst at WorldRemit, Alix Murphy,mobile money remains the main or only means of accessing financial services. She said Nigerians in Diaspora are famed for their generosity, and keen adopters of new technologies including mobile money services.

She said Nigerians are among the first to really embrace the technological revolution in money transfers. Using convenient online and mobile services, they are very likely to sustain the record in sending remittances.

She said WorldRemit has been supporting commercial relationships with telecoms operators all over the world, as well as promoting mobile money opportunities in developing countries, including Nigeria.

Murphy, before joining WorldRemit, was the market intelligence analyst for the Groupe Speciale Mobile Association (GSMA), where she analysed trends in mobile money and digital identity and consulted mobile operators on revenue opportunities.

“That’s why WorldRemit has worked hard to connect to more mobile money services than any other money transfer firms,” she said.

Global prediction

Murphy reiterated World Bank’s prediction that the number of international migrants is expected to exceed 250 million this year. “So we shouldn’t be surprised that as long humans continue to go abroad for work or family reasons, we will continue to see increasing volumes in international remittances,” she said.

She said that remittances create opportunities and that in Nigeria, as elsewhere in Africa, there is a huge appetite for business and there are countless examples of Nigerians receiving money from relatives abroad which they used to finance or set up small businesses at home.

“Let me look at this from the perspective of international transfers: the Groupe Speciale Mobile Association actually noted that the average cost of sending money internationally using mobile money as a receive method was $4. That’s less than half the cost of sending money internationally to Africa by traditional money transfer firms,” she said.

On how to boost mobile money businesses, he advised: “Establishing trust among customers is important for all financial service providers. Both banks and Mobile Money services have an important role to play in increasing awareness about the enhanced security and protection that digital financial transactions can bring. Cash is anonymous, whereas digital transactions necessarily have an audit trail from end to end, not to mention increased speed and reliability,” she said.

Mobile money model

On the right mobile money model needed by Nigeria, Murphy said every country has its own unique context which impacts the ability for Mobile Money to thrive. “Most of the successful Mobile Money services involve some type of partnership between banks and telcos, but one important thing to remember is that Mobile Money requires significant investments in technology, agent training, marketing, and customer education in order to succeed. We partner with both telcos and banks that have made this commitment to investing in customer education,” she added.

She advised Nigerian shareholders not to be in a hurry to reap from mobile money businesses. “Shareholders who invest in Mobile Money must understand the very different dynamics of this industry compared to typical banking or telco services. The most successful Mobile Money services in other countries took several years to become profitable, but their shareholders made long-term investments which required patience and dedication in order to establish an excellent service,” she said.

Poor network quality

On tackling poor network in the industry, she said Nigerian operators should look to countries like Somaliland, Kenya, or Zimbabwe for a sense of the overwhelming success of mobile money services. “Clearly, there are major incentives for telcos to invest in network infrastructure. There is no doubt that investments in robust and resilient systems, as well as adequate customer education about coverage and network safety will ultimately allow telecom operators to drive mobile money adoption rates,” she said.

Murphy said WorldRemit is looking at telcos, banks, and regulators to work in unison for a more inclusive financial services environment. “The World Bank noted that Mobile Money has contributed significantly to an increase in financial inclusion in East Africa, and we expect to see similar impact as Mobile Money services grow in other regions. There are a number of instructive learnings from other African markets,” she explained.

The company, she said, wants to enrich people’s lives by giving them the power to share money with friends and family – anytime, anywhere. She said traditional money transfer companies, with their brick-and-mortar business model and agent-exclusivity arrangements, have long since overcharged customers, while delivering an appalling customer experience.

“WorldRemit is an online service that lets people send money to friends and family living abroad, using a computer, smartphone or tablet. It is a convenient, low-cost alternative to traditional money transfer companies that use high street agents and charge unreasonable fees.

Around the world, WorldRemit offers customers the option of receiving money as airtime top-ups, bank deposits, cash pick-up, or Mobile Money. In Nigeria, WorldRemit currently sends to most major banks as well as providing airtime top-ups for phones on Airtel, Etisalat, GLO, and MTN,” she said.

Expansion plans

Murphy said that WorldRemit’s international business development team is already working with existing and prospective partners on the ground in Africa. As the business grows, we will most likely devote more and more resources to fast-growth markets.

“As a business, we are growing incredibly fast and we now have more than 180 employees around the world. It’s important to make sure that we continue to work as smoothly and effectively as we have done in the past.

“WorldRemit is shaking up the money transfer industry like no company has done before. We are working hard to launch our service in more and more countries, including the United States, where many Nigerians live. We are also adding more receive options.

“For our existing and prospective customers, that means they will get to use a service as convenient and innovative as no other. In five years, we expect that, by and large, customers will be embracing the convenience of sending money online and from Smartphone to Mobile Money services – a true mobile-to-mobile experience,” she said.

World Bank position

World Bank said Nigeria received $21 billion last year, accounting for two-thirds of all remittances to sub-Saharan Africa, an online money transfer service.

The global lender said Nigeria remains among the world’s largest recipients of remittances and that remittances to the region are projected to reach $36 billion in 2017. In 2013, remittances financed one-third of the country’s imports.

In an emailed report titled: How Mobile Money will Power Global Remittances, it said global remittances will grow slowly this year, but accelerate again in 2016 and 2017.

Furthermore, it said global remittances will this year, reach $586 billion at a slower growth rate of 0.4 per cent due to economic conditions but will accelerate again to reach an estimated $636 billion in 2017.

The lender said fees are far too high and that the average cost of sending $200 to sub-Saharan Africa remains at 12 per cent of the amount, higher than the G20’s target of five per cent.

This, it attributed to the cost of bricks-and-mortar agent networks of traditional firms. “There is a huge potential for mobile technology to reduce costs on both the send and receive sides,” he said.

According to the global lender, mobile money will grow to play a huge role in remittances and help to bring down fees.

“Worldwide Mobile Money usage is exploding with 261 mobile money services now live across 89 countries with 103 million active users as of December 2014. More than half of these services currently in operation are in sub-Saharan Africa,” it said.

Mobile money helps to reduce remittance fees, adding that the median cost of sending $100 via Mobile Money is $4, less than half the average cost to send money globally via traditional money transfer channels.

Benefits to consumers

Some of the benefits to the consumer include security, convenience, accessibility, speed and ease of transaction, competitive charges, access to quality advisory services, and integrity of transactions; the customer literally carries his bank in his pocket or bag wherever he goes.

Other not-so-obvious benefits, which are nonetheless important, are better cash flow management, enhanced financial planning, and inculcation of sustainable savings habit, which boost financial security and comfort in retirement.

“Mobile payments, which I perform on my phone, help to reduce my travelling costs,” a farmer in rural Nigeria who uses mobile payment services said.

Mobile money also has the potential to galvanise economic activities, leading to higher socio-economic development, lower cost of transactions and reduction of cash handling costs, among other benefits.

Role of regulators

The Central Bank of Nigeria said over the next few years, the focus of the regulator will be to strengthen the institutional and regulatory frameworks to achieve improved financial inclusion. The application of mobile technology for financial services especially in rural areas will ensure that a large percentage of the population outside the formal banking system would have access to financial services using one of the three models of card-based, account-based and virtual account.

Nigeria’s telecoms subscriber base, put at 131 million as of last September by the Nigeria Communication Commission, should play a major role in bringing the unbanked into the formal banking system.

With over 50 per cent of Nigeria’s adult population unbanked, mobile banking could be the catalyst that will help quicken the adoption of banking services by this critical segment of the population.

Mobile money is the next thing expected to pex bank said.

May 13, 2015
Many sides of mobile money

Call it a marriage of convenience, you won’t be wrong. Telecoms technology and banking services are creating a wave in the financial services subsector via mobile money. This payment module has grown beyond its original concept and is expected to bridge the gaps between the banked and the unbanked, writes COLLINS NWEZE.

The dream of getting financial services to all nooks and crannies of the country is now being pursued by both the Central Bank of Nigeria (CBN) and Nigeria Communications Commission (NCC) via mobile money.

That vision, many analysts said, would be largely driven by mobile money, which refers to payment services operated under financial regulation and performed via a mobile device.

With mobile money, instead of paying with cash, cheque, or credit cards, a consumer can use a mobile phone to pay for various goods and services.

In 2008, the global market for all types of mobile payments was projected to reach over $600 billion by 2013. In developing countries, including Nigeria, mobile payment solutions are deployed as a means of extending financial services to the unbanked or under-banked. This group constitutes about 50 per cent of the world’s population, according to Financial Access’ Report.

Analysts insist that financial exclusion persists because of the inaccessibility of the unbanked, mostly people in the lower strata of the economy, by the financial services providers.

The unbanked are often far removed from the centre of commerce, which tends to lower their participation in economic transactions.

A combination of low demand for financial services and prohibitive costs without commensurate returns dissuades financial services providers such as banks, insurance, and pension administrators from establishing physical presence in these locations.

However, mobile technology and innovations in the financial services industry, coupled with the phenomenal growth in telecoms’ subscriber numbers, have altered this situation.

Financial services providers continue to leverage the reach of telecoms networks to provide mobile money services to otherwise inaccessible locations.

The recent agreements on mobile money services between financial institutions and telecoms networks, MTN and Diamond Bank, UBA and Airtel, Stanbic IBTC Bank, First Bank, Ecobank and Globacom, will hopefully ramp up the synergy that should lead to further growth in mobile money.

The M-Pesa example

The poster boy of the successful integration of the rural/informal populace into formal banking system via mobile money services is usually Kenya. And rightly so. M-PESA, Kenya’s mobile money system, has been hugely popular and successful in that country. Today, M-PESA has over 40,000 agents and 17 million users (“equivalent to more than two-thirds of the country’s adult population, conducting more than two million transactions daily.

In 2010, Kenya had just 840 bank branches and 1,510 ATMs to serve a population of 47 million people. M-PESA, with its 40,000 agents, helped to plug the supply hole and provide access to financial services to ordinary Kenyans.

Micro finance institutions took advantage of M-PESA to penetrate remote areas very quickly without substantial increase in costs.

In other countries, many financial institutions seemed to have found the right mix to ensure successful deployment of mobile money. Standard Bank (parent bank of Nigeria’s Stanbic IBTC Bank), for instance, has been successful with mobile money in Uganda, Tanzania, and South Africa.

Bank-led model

The bank-led mobile money model adopted by Nigeria may be slightly different from Kenya’s telecoms-driven model but the underlying peculiarities are broadly similar.

Access, costs, lower economic activities, and partnerships are common threads. The lessons of M-PESA are not lost though as mobile operators like MTN Nigeria is beginning to play more significant roles in mobile money.

CBN Vs Telco-led model

The CBN said it avoided the implementation of the Telco-led model in the mobile money operation to have full control of monetary policy operations. The policy, it said will also enable it minimise risks and ensure that the offering of financial services are driven by organisations it licensed.

In its new guidelines, the CBN said the Telco-led model, where the lead initiator is Mobile Network Operator (MNO), shall not be operational in the country. The apex bank said the overriding vision of achieving a nationally utilised and internationally recognised payments system necessitates strategies to bring informal payment transactions into the formal system.

This framework has identified two models for the implementation of mobile money services namely; Bank Led – Financial Institution(s) and/or its Consortium as Lead Initiator and Non-Bank Led- A corporate organisation duly licensed by the CBN as Lead Initiator.

“The CBN recognises the importance of MNOs in the operations of mobile money and appreciates the criticality of the infrastructure they provide,” it said.

The CBN said a robust payments system is vital for effective monetary policy implementation and the promotion of economic efficiency. “The introduction of mobile telephony in Nigeria, its rapid growth and adoption and the identification of person to person payments as a practical strategy for financial inclusion, has made it imperative to adopt the mobile channel as a means of driving financial inclusion of the unbanked,” it said.

CEO, MTN Nigeria, Michael Ikpoki, said the network will focus on meeting the significant market demand for financial services and mobile content with an expected positive impact on data revenue.

“The success of Diamond Y’ello Account and other basic mobile money services is expected to lead to the adoption of more sophisticated mobile payment solutions such as bulk mobile payment designed for corporate organisations. This service makes it easier for organisations to send money in bulk to their suppliers, employees or other business partners without the beneficiaries necessarily having to own a bank account,” he said.

Mobile money providers are also expected not be shy to adapt and replicate what works in other places but continue to innovate and develop products and services to excite consumers and boost conversion rate.

Benefits to consumers

Some of the benefits to the consumer include security, convenience, accessibility, speed and ease of transaction, competitive charges, access to quality advisory services, and integrity of transactions; the customer literally carries his bank in his pocket or bag wherever he goes.

Other benefits which are nonetheless important are better cash flow management, enhanced financial planning, and inculcation of sustainable savings habit, which boost financial security and comfort in retirement.

“Mobile payments, which I perform on my phone, help to reduce my travelling costs,” a farmer in rural Nigeria who uses mobile payment services said.

Mobile money also has the potential to galvanise economic activities, leading to higher socio-economic development, lower cost of transactions and reduction of cash handling costs, among other benefits.

Role of regulators

CBN Director, Payment Systems Unit, ‘Dipo Fatokun, said the apex bank believes that mobile money and agent framework is the frontier of cashless boom.

“Mobile money is the next thing expected to transform CBN’s cash-less policy. The apex bank believes that such initiative will aid both telecommunications and banking industries to further serve Nigerians better,” he said.

Nigeria’s telecoms subscriber base, put at 131 million as of September, last year by the NCC, should play a major role in bringing the unbanked into the formal banking system.

With over 50 per cent of Nigeria’s adult population unbanked, mobile banking could be the catalyst that will help quicken the adoption of banking services by this critical segment of the population.

Offshore portfolio managers appear to be similarly persuaded and they are already positioning to take advantage of the expected growth in mobile money.

For instance, Carlyle Group, a US-based global alternative asset manager with $203 billion of assets under management across 129 funds and 141 fund of funds vehicles, recently acquired a $147 million (about N27 billion) minority stake in Diamond Bank, partly on the strength that the bank’s new mobile banking service “will help rapidly boost the lender’s customers and profits.”

Also strengthening mobile money is the Nigerian Deposit Insurance Commission (NDIC’s) extension of deposit insurance cover of up to N500,000 to mobile money account holders.

April 15, 2015
NIPOST’s facilities to drive mobile money

About four years after the Central Bank o f Nigeria (CBN) licensed 18 mobile money operators in the country, only approximately one million of the over 130 million mobile subscribers in the country have taken advantage of the platform for transaction.

The Ministry of Communications Technology said the ubiquitous network of the postal outlets of the Nigerian Postal Service (NIPOST) would be deployed to boost digital transaction across the country.

Its minister, Dr Omobola Johnson said the development, after being in operation for one year, is expected to reduce the number of the unbanked in the country by 10 per cent (3.5 million).

Omobola who spoke on Connect Nigerians: The role of Nigerian postal agency, NIPOST, in our Financial Inclusion Model said: “The network of postal outlets operated by the Nigerian Postal Service, NIPOST constitutes the most widespread retail network in the country

“The postal service network is more widely spread than the combined bank branch networks; nationwide spread of physical network with a constitutional mandate to maintain location in every local government area (774 LGAs); recgnised and trusted brand, particularly in rural areas; most experienced public entity in the recruitment and support of agents; potential to be an effective, multi-ethnic, multi-lingual workforce; postal financial services to be delivered in partnership with banks, telcos, IT companies.”

According to her, the transaction advisor for this programme would be selected this quarter while partners would be selected the second quarter of next year while the partnership is also expected to begin by the second quarter of 2016.

“After being in operation for one year, this service should be able to reduce number of unbanked Nigerians by 10 per cent (3.5 Million),” she said of the anticipated effects of the initiative.

According to her, about 67,000 mobile money agents have so far been registered, lamenting that analysis has shown that a significant proportion of payments in the country are still cash-based.

The minister said total payments are estimated at $695billion per annum out of which cash accounts for over 90 per cent of transactions in terms of volume and about 60 per cent in total value

Dr. Omobola said: “Bank transfers and cheque payments combined make up less than 0.5 per cent in terms of volume and approximately 38 per cent in terms of value

“Other digital forms of payment are increasing in volume. They however currently make up only about two per cent in value. Most payments (in terms of value) are between businesses and persons (B2B, B2P, P2P) business to business (B2B), business to person (B2P) and person to person (P2P)”.

She said government payments however have high potential to change the payment landscape of the country, adding that cash transactions are expensive, risky and promote insecurity in the financial system and country

“Government is therefore implementing policies to increase the adoption of digital forms of payments. ICTs are at the heart of the success of such policies. Infrastructure for the delivery of services, applications for management, security and adoption of services (would be provided),” she said.

October 23, 2014
How to boost mobile money uptake, by Ericsson

About three years after the Central Bank of Nigeria (CBN) licensed firms to do mobile money, the uptake has been nothing to write home about.

But technology firm, Ericsson has said offering incentives to subscribers is one way to encourage the boom in the initiative designed to complement the financial inclusion strategy of the apex bank in the country.

The firm urged operators and financial institutions to consider a loyalty programme to improve activity in dormant mobile money wallets

Its Head, Mobile Commerce Sales, Europe, the Middle East & Africa, (EMEA) Rajiv Bhatia said airtime could be used to drive the uptake and use of mobile money services in countries where its growth has been sluggish such as Nigeria.

He explained that operators and financial institutions could replicate the loyalty programme of credit card providers, through the use of airtime to encourage consumers to use mobile money.

He said: “There is an untapped opportunity to drive activity and loyalty in mobile money using mobile prepaid airtime. Airtime can be used to incentivise use in ways such as encouraging people to have a minimum amount of money in their wallets and rewarding them with better data and airtime bundles for usage of their mobile money wallets.”

According to him, Africa is a leading market for mobile money and that millions of people without access to banking services were signing up to use mobile money services.

Operators and financial institutions are battling to trigger activity in dormant wallets.

Rajiv explained that the slow growth of mobile money in South Africa was a result of the expansive automated teller machine (ATM) and bank infrastructure available and how this network had done much to address the needs of the population to access and remit cash.

“Yet, there are millions more, who are still unbanked. There are fantastic opportunities to grow this business especially among the migrant population, which still uses informal means to remit cash. Banks should forge closer ties with operators, who have an expansive distribution network to encourage adoption and drive usage,” said Bhatia.

He emphasised that transparency, education and trust were key to growing the mobile money ecosystem in Africa.

According to the World Bank, almost half the world’s adult population – some 2.5 billion people – are unbanked, the majority in emerging markets. For countries where financial inclusion is low, mobile money solutions such as e-money accounts and e-mobile wallets offer a fast way to improve financial inclusion and close the gap.

Bhatia said: “We estimate that by 2016, the m-commerce market is expected to reach $800 billion worldwide. Countries, such as Kenya, Uganda and Tanzania are already feeling the impact of greater financial inclusion. Today, around nine million Ugandans use mobile banking to exchange, save and spend money, instead of handling cash, reducing both the risk of theft and the need to travel.”

July 17, 2014
Mobile spa, mobile money

With the growing interest in fitness and wellness, mobile spa is becoming investors’ destination. Daniel Essiet reports.

IN the past, wellness and spa service sounded strange to many. It was a business patronised mainly by the rich. Things seem to have changed now. It has become a mass market. On every street, on every corner, spa and beauty service is being offered.

A Lagos-based entrepreneur, Mrs Kera Oluwasola Oluwabunmi, founder of Keracare Beauty Spa/Academy, was introduced to the business when she was growing up. Her dream was to start a wellness centre that offers personal care services. To achieve this, Mrs Oluwabunmi attended a beauty school and on completion of the course, she decided to carve a niche. She established a mobile spa and wellness firm. Her strategy is to take services to clients at home at highbrow Magodo area of Lagos.

She started with less than N100,000 in 2003. Today, the business has grown beyond her dream. More clients kept coming. The mobile firm assists others when their own spas are overbooked, or give special attention to VIP guests.

The mobile firm has helped Mrs Oluwabunmi to keep her own spa dream afloat until she was able to establish a shop service.

With a growing demand for mobile massages, she was inspired to go into more treatments, products, massage techniques or packages into the home setting.

To ensure success, she is flexible, as each spa client expresses different needs.

Her adoption of viral marketing as a strategy helped people to learn about her company’s mobile services.

Mrs Oluwabunmi said there are opportunities for Nigerians in the business because they appreciate the feel-good experience and health benefits.

At the moment, she is focusing on providing world-class skincare services to clients.

Besides, she runs a beauty academy at Ikorodu, Lagos and offers apprenticeship where trainees, learn new products and techniques. Her skincare secrets are education, inspiration, reinvention and delivery.

She said some of the reasons behind her success are that her clients are loyal to her spa services. She employs therapists. Treatments include aromatherapy, designed to relax muscles, alleviate stress and promote well-being.

For her, the key to making money is to provide outstanding services that draw customers and keep them coming back while offering value-added options to increase revenue and profits.

May 14, 2014
Mobile money revenue to hit $3b soon

The revenue of mobile money operators will rise to $3 billion next year, a study by Pyramid Research has shown.

Although Safaricom’s M-Pesa in Kenya has long been the lone success story in the mobile money universe, successes are being recorded in, Uganda and Tanzania with similar mobile money offerings.

MTN Uganda’s mobile money service accounts for three per cent of all airtime sold on its network, and Vodacom’s M-Pesa service in Tanzania has six million subscribers with exponential growth of 600 per cent experienced in the past year alone. Currently, mobile money offerings remain limited and are concentrated in just 22 of the more than 50 African countries.

Analysts said the African mobile money market has the potential to grow to a money-making market, but operators, banks and regulators need to work toward developing an enabling environment for business models that meet service providers’ revenue demands.

April 16, 2014
Mobile money transactions hit N300m

About three years after it was introduced, the bank-led mobile money model has recorded a major success. Total transactions across the various mobile money (MM) schemes have hit a record N300 million as at the end of January, underscoring a tipping point in the shift towards the cashless society.

The value was achieved in more than 12,000 transactions and did not include transactions carried out within individual networks.

According to sources at the Nigeria Interbank Bank Settlement System (NIBSS) who craved anonymity, 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.

It was gathered that the ability of a mobile money user to send money directly to the wallet of a user on any other service provider was facilitated by connectivity service being provided by National Central Switch (NCS) that is offering the technology 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, according to Nigeria CommunicationsWeek.

The mobile money scheme has not recorded success in the country as it has in other parts of the world, especially Kenya where the Mpesa has been an outstanding success. While analysts have blamed this on the bank-model chosen by the CBN, arguing that it would have been otherwise if it was driven by the telcos, the lenders say the telcos are asking for too much have cornered more than 120 million customers.

Acting Chief Executive Officer, Etisalat Nigeria, Mathew Willsher has called on the relevant authorities to evolve a workable mobile money model in the country while his counterpart in Airtel Nigeria has also blamed the slow uptake of the scheme on the model adopted.

A mobile money expert and Principal Associate, MobileMoneyAfrica, Emmanuel Okoegwale, said there are only 47 mobile money deployments in West Africa out of 100 deployments in Africa.

According to him, the 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.

“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.

“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 mobile money and agency banking services to lower their transaction cost and reduce cash at hand in their outlets. Generally, the outlook for mobile money in 2014 is positive and encouraging based on the developments that we recorded in 2013,” Okegwale was quoted as saying.

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.

It would be recalled that transactions among mobile money schemes commenced in March last year after the expiration of the deadline of February 28 CBN gave to operators to connect to NCS that is offering the connectivity.

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.

March 13, 2014
‘Only 12% of Nigerians is aware of mobile money’

ONLY 12 per cent of Nigerians aged 15 and above is aware of mobile money, while less than one per cent of them use the platform, a group has said.

The group, Financial Innovation & Access (EFInA), at a workshop on mobile money, said this was the outcome of its survey did with InterMedia.

It said mobile money awareness and use was slightly higher in “Cash-less Phase II” states, such as Abia, Anambra, Kano, Ogun and Rivers states, and the Federal Capital Territory.

According to the research, as at October, last year, only four per cent of adults use mobile money, while in the aforementioned states, debit, credit and pre-paid cards were the most widely known and used electronic payment instruments.

Also, men used e-payments channels more than women.

The experts said low customer awareness, lack of trust in mobile money, and unreliable cellphone networks remain barriers to the business.

However, respondents in both studies also shared positive impressions of mobile money, saying they perceived mobile money to be fast, convenient, and safer than carrying cash.

The Chief Executive Officer of EFInA, Modupe Ladipo said: “The financial services industry can drive uptake of mobile money by educating customers, providing reasonably priced products that meet customer needs, and creating the right incentives for both customers and mobile money agents.”

Vice President, InterMedia, Peter Goldstein, said Nigeria has a higher percentage of bank account holders, but a lower percentage of mobile money users compared with other countries, such as Uganda and Kenya.

Mr. Goldstein emphasised the need to educate potential customers about mobile money services, particularly regarding security measures that have been implemented to protect against theft and fraud.

March 12, 2014