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

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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.

 


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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

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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