Despite
the promise and enthusiasm that attended the launch of mobile money
systems in Nigeria two years ago, the service is still struggling to
gain a foothold in the country.
This is against the backdrop of the huge potential market size, which is expected to grow to N1.1 trillion by 2015.
Industry experts and analysts say this is because
banks, mobile money operators and other players have failed to clearly
define, articulate and communicate the benefits of using the service to
prospective customers.
Analysts have also identified regulatory issues,
absence of interoperability amongst disparate mobile money systems, and
poor agent networks, as some of the drawbacks to the speedy adoption of
the service.
“Mobile money is not getting traction in Nigeria
and across West Africa...there are regulatory issues particularly
amongst West African countries which have not allowed mobile money to
grow as much as we would have liked it in the telco space,” Wale
Goodluck, corporate services executive, MTN Nigeria said in an
interview.
In December 2012, the Central Bank of Nigeria
(CBN), said the total value of transactions carried out so far by mobile
money operators was N17.3 billion. A recent survey conducted by
Enhancing Financial Innovation and Access (EFINA), has revealed that
there are about 400,000 mobile money subscribers in Nigeria, out of a
population of 167million.
In contrast, two-thirds of Kenya’s 29 million
mobile subscribers use mobile money. Femi Adeoti, chief executive
officer of Inlaks Computers said that with Nigeria’s huge mobile
subscription base, currently at 114 million, the country could surpass
the success of Kenya’s M-PESA, if appropriate policies that would drive
the right solutions are put in place. He added that it would be
necessary to give ample support to network and licensed mobile money
operators. The CBN had in 2011 licensed 16 operators to provide mobile
payment services in Nigeria. But analysts say poor infrastructure has
contributed massively to slow adoption.
Henrietta Bankole-Olusina, head of mobility for
Accenture Nigeria, said investment in infrastructure alone cannot spur
growth of the service expected to aid financial inclusion by extending
banking and payments services to millions of the unbanked.” We can
invest in infrastructure all we want, but if we don’t have the right
business models, we will not achieve desirable results. An effective
business model and a clear customer value proposition is what this
sector requires to stimulate growth. We have a myriad of operators
offering the same standard of products. “Nobody is telling the consumer
about what values they can derive from using the service”,
Bankole-Olusina said at a forum in Lagos.
Lending his view, Franklin Chidi, an electronic
payment expert and blogger, said a large number of banks have for
several years, supported mobile banking and money transfer services
using phones, browsers or application installed on Blackberries, iPhones
and Andriod phones. “The reality is that many of the early adopters who
typically help spread the phenomenon are the young and upward mobile,
who are not yet jumping on the mobile money bandwagon because they have
an alternative that still works for them.”
“Traction in mobile payment in Nigeria remains
very low. Interoperability is a serious issue. The likelihood of growth
is clearly reduced”, Chidi added.
“Only four out of the 20 licensed mobile money
operators are interoperable, as the industry is currently fragmented
,with disparate mobile payment systems that don’t talk to one another,
Bankole-Olusina said. The potential in the mobile money market is huge,
but it is a capital-intensive, thin margin business, said Chuma Ezirim,
head of e-banking at FirstBank. “There is need to manage the
expectations of some stakeholders, especially on the viability of the
Mobile payment deployment. The growth period might be longer than
expected because of the complexity of the ecosystem.”
