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.