General News
Digital merchant payments can help de-risk local business environments: here’s how
By Murray Gardiner, Managing Director, Bluecode Africa
Over the course of the past 12 months, the world has learned a lot about uncertainty. The financial space is no exception, having gone through the kind of ructions not seen in nearly a century. As governments around the world look beyond recovery and towards avoiding a similar crisis, financial regulators will look to take the risk out of their local financial markets and payment systems.
The Covid crisis has highlighted the risk of an increasingly perilous debtor book. This usually implies increasing capital adequacy and provisioning requirements and increasing the audit and fraud detection controls. Further consolidation can be expected. But one particularly poignant impact has been related to fraud with the spike in online transactions. Securing online payments and mobile banking channels has never been more urgent.
Tightening credit and doubling down on legacy payment security will have an economic dampening effect as African markets plunge into recession. A powerful tool that regulators have to respond to this crisis is by encouraging in-country digital merchant centric payments to focus on stimulating the local SME and informal business sector. Doing so not only improves the efficiency and security of payments, the digital transparency deepens the relationship between banks and business which in turn is good for consumers and producers alike.
Benefits from SMEs to Financial Institutions
One of the biggest benefits in-country digital payments have when it comes to de-risking local business environments is that they bring a greater degree of transparency and formalisation of the financial relationship between the bank and the SME.
In the SME space, for example, the advantages include contactless payments, instant access to funds on acceptance of payment, and digital transparency with their acquiring bank. The digital transparency and reliability of the in-bound receipts from digital payments to the acquiring bank promotes access to a wider range of financial services (insurance, savings, credit facilities, EFT payments) and establishes a business track record with suppliers and other service providers. A bank that can see the SME’s cash flow and rely on regular inbound payments can safely extend credit and other essential services that it could not reasonably do otherwise.
It also gives businesses a chance to open new sales channels, such as e-commerce and sales agent networks, and to offer value-added services to promote customer loyalty, sales campaigns, and partner programmes.
Importantly, these measures bring a greater degree of stability to these businesses and their workers, further helping the economies they operate in to reduce risk.
Financial institutions, meanwhile, benefit by being able to use digital transparency and data to understand the business and reduce lending risk and cost, increasing the size of the addressable market. Technology reduces the transaction costs associated with onboarding merchants as customers and creates a data-rich relationship that turns a thin file client into a data-rich client that is bankable. Digital merchant payments are a gateway to more comprehensive and conclusive finance to support and stimulate the productive economy.
Regulation and incentivisation
This is why it is important that governments embrace digital merchant payments on account rails, away from cards in a local scheme governed by local rules. This is a gateway to more comprehensive and meaningful finance to support growth and development of the productive economy.
It is often cited that digital disruptors run ahead of legislation by finding ways around the rules that were not anticipated when the rules were designed. The South African Reserve Bank has recently warned about a new activity with “Instant EFT start-ups that use a practice called “screen scraping” where a third-party is given access to a consumer’s bank account data and acts on behalf of said-consumer, using that consumer’s online banking access credentials to simulate instant clearing.
It’s important that regulators protect consumers and the confidence the public has in digital payments and needs to set parameters for the kind of digital payments adopted in their markets. Payments must be safe and customer data must be protected. But the payment also has to be sufficiently valuable to merchants and profitable enough for the financial institutions to build a meaningful commercial financial relationship bringing the merchant into the formal economy and create a merchant customer.
Minimising risk
While it’s impossible for regulators to totally eliminate risk particularly from unpredictable “black swan events” such as we have experienced in 2020, they can prepare payment systems for shocks and defend financial markets by encouraging transparency and financial inclusion with secure account rail digital payments.
While in-country digital merchant payments are just one measure, their use is one of the most powerful ways of generating growth in the local economy and “lighting up” the shadow economy. Ultimately, a local digital payment on the account rail can prove vital to a more comprehensive and conclusive impact to stimulate the productive economy.
The Nigeria Immigration Service (NIS) strengthened bilateral relations with the Netherlands’ government through an agreement targeted at improving migration governance and border security.
This partnership was confirmed during a meeting at the NIS headquarters in Abuja, which was attended by a Dutch team led by Jurgen Bartelink, Chargé D’Affaires of the Embassy of the Netherlands in Nigeria.
The meeting focused on increasing bilateral migration cooperation and came after the comptroller general of Immigration, Kemi Nandap, paid a working visit to the Netherlands.
Under the agreement, the Dutch government pledged to continue supporting technology-driven solutions targeted at boosting Nigeria’s border control systems and improving migration management.
During the Netherlands Embassy diplomats handed over essential operational tools, such as Edison Software licence keys and the Passport Examination Programme Manual App.
According to NIS spokeswoman ACI Akinsola Akinlabi, “The partnership focuses on enhancing bilateral collaboration on migration management and reviewing ongoing capacity-building efforts.”
Bartelink, Chargé d’Affaires of the Netherlands Embassy in Nigeria, underlined the Netherlands’ commitment to helping Nigeria’s continuing border security and migration reforms.
Also speaking, Rob Bokhoven, head of international affairs, repatriation, and deportation services at the Dutch Ministry of Justice and Security, emphasised the country’s strong bilateral relations and announced plans to share a mobile border software solution with the NIS.
Receiving the equipment, Nandap said the delivery of the gadgets would boost West African country’s border security, significantly improve the service’s document verification border management capabilities and support the implementation of Nigeria’s National Migration Policy.
“The engagement will further reinforce the strategic partnership between Nigeria and the Netherlands advancing shared goals in migration governance, border security and international cooperation,” she added.
Peter Enogb, principal country economist, African Development Bank (AfDB), says the rise in global uncertainty, emanating from increases in global trade tariffs, has slowed Nigeria’s projected growth to 3.2% in 2025.
“Without this level of heightened uncertainty, our projections would probably have been somewhat higher. We’ve reduced our projections for Nigeria. We initially were projecting 3.5% – 3.6% growth in 2025.
“But given the current situation, our models are showing that we’re taking a more cautious approach. So that’s why we produced this and, of course, the main driver is uncertainty in the global economy,” Enogb said.
He said this at the launch of the 2025 Nigeria Country Focus Report (CFR) on Thursday.
AFDB projected that real GDP growth would hit 3.1% in 2026. Following the 2024 consumer price index (CPI) rebasing, with lower weights for food items, the inflation rate is expected to reduce over the medium term to 24.7% in 2025 and 17.3% in 2026.
As imports start to rise over the medium term, the current account is projected to decline to 3.9% of GDP in 2026.
The National Bureau of Statistics (NBS) reported that Nigeria’s headline inflation slowed for the second consecutive month to 22.97% in May. This is down from 24.48% at the start of the year
This is contrary to the World Bank projection that Nigeria’s economy would record steady growth of 3.6% despite the shift in the global trade dynamics.
Joseph Ogebe, head of research and development at Nigerian Economic Summit Group (NESG), also said that global uncertainty had been very high in recent times, resulting from the Trump 2.0 effect.
“And also with the recent war between Israel and the international community, we’ve seen what’s happening to oil prices. Even with the call-off of the war, we’ve seen the effect on oil prices too, which has implications on the fiscal side. So it has implications for the general economy,” he said.
The head of research at NESG said that rather than focusing on just growth, what should be looked at is a strategy called growth with depth.
“Growth with depth means that your growth must be diversified, export-led, productive, and technologically driven,” he said.
Ogebe said that if the Government works towards adopting a strategy of growth with depth, there is a tendency for the government to move towards its goal of achieving a $1 trillion economy by 2030.
The report revealed that the country’s recent policy moves, including fuel subsidy removal, exchange rate unification, and tax reforms, reflect a commitment to long-term transformation.
However, it also pointed out that at about 13%, Nigeria’s tax-to-GDP ratio is among the lowest in West Africa, noting that fiscal reforms are urgent.
TikTok has announced the expansion of its global mental health fund to Sub-Saharan Africa and introduced new digital safety tools aimed at improving well-being on the platform.
The announcement was made at the inaugural Digital Well-being Summit held in Johannesburg, South Africa, with participants including government officials, mental health experts, NGOs and industry leaders from several African countries.
As part of the initiative, three organisations—South African Depression and Anxiety Group (SADAG), Mentally Aware Nigeria Initiative (MANI), and Kenya’s Mental360—were named as the first African beneficiaries of the platform’s $2.3 million Mental Health Education Fund.
TikTok also introduced an in-app guided meditation feature called “Sleep Hours,” rolled out globally to support better nighttime routines for users. The tool is automatically enabled for users under 18 from 10 p.m., with optional use for older users.
According to the company, the move is part of its broader efforts to support mental health, reduce stigma, and increase access to reliable support services on its platform.
The platform is also expanding access to local in-app mental health helplines across Africa, following successful pilots in Europe. The helplines will offer expert support on issues such as self-harm, harassment, and suicidal ideation.
Additionally, TikTok unveiled its first set of Mental Health Ambassadors in Africa under its collaboration with the World Health Organization. The ambassadors include medical professionals from South Africa, Nigeria, and Kenya.
Valiant Richey, TikTok’s Global Head of Trust and Safety Outreach, said the company remained committed to creating a safe and supportive space for users across all regions.
The summit featured discussions on online safety, digital literacy, and access to professional mental health resources, with support from local partners such as Spectra.
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