Mobile Money Africa

MobileMoney: Shape of things to come in Nigeria

Posted by Editor On February - 7 - 2010

Emmanuel Okoegwale

The Nigerian Financial Regulator, Central Bank of Nigeria had since last year released the regulatory framework to guide the operations of potential mobile money operators in Nigeria. The policy guidelines though with some flaws but like all regulatory positions, prevailing situations always shape and influence review on a consistent Basis or on a need arise Basis.

The poison pill
CBN has clearly stated that the Banks are favored ahead of MNO’s in the countries Mobile Money space. MNO’s will have to work with a licensed financial institution, therefore commercial Banks, micro finance and discount houses. MNO’s in Nigeria are not known, not to be in the drivers seat for their own deployments but the regulators stand on this may not be final but it holds for now.Though the Banks do not understand ‘low value’ and ‘High volume’ Business platform required to run MMT platforms but capacity can be sourced elsewhere and quickly.

The Alliances
Globacom, one of Nigeria’s most innovative MNO and second National carrier with operations in a couple of West African countries may join forces with ETBank which has a close ownership structure with Globacom.This relationship may be excellent for internal operations but may not deliver expected benefits for end users if the technology to be used is a combo of mobile,card and ATM. ETBank has a limited ATM and Branch Network in Nigeria.

MTN, Africa’s largest MNO with over 100 million subscribers in Africa and Middle East,is said to be working with GTBank.The Bank has proven to be a credible and trusted partner for Mobile Money providers in West Africa with impressive records with Txtpay in Ghana and Splash Mobile Money in Sierra Leone.The experiences in both market may count in local operations in Nigeria.

Zain is actively zapping through Africa with recent addition of sierra Leone,Malawi and Niger on the Zain zap Map.Zap has working relationship with CITI Bank in some parts of Africa but it may face significant challenges in Nigeria where the Bank is relatively unknown in retail Banking with limited Branch network and non existent ATM network.May face hindrance where ATM technology is required as cash out options.

Regional corridor
West Africa has strong cultural and economic ties with millions of migrant labor crossing into countries all across the region,all year round.Benin Republic alone accounts for more than 65% of Nigerian used car imports and also a well developed transportation hub between Lagos – Accra in Ghana.
Despite the huge potentials in the regional economy, most of the Businesses are still informal and like wise the remittances. Opportunities abound for MMT regional Hub to take advantage and explore the opportunities.

Game Changers
UBA Bank, a leading financial services provider in Nigeria with very ambitious African growth and a formidable regional Hub operations in West Africa is a strong contender in the MMT space with more than 7 million customers in Nigeria alone, close to 2,000 ATM across Nigeria, no other financial institution in West Africa is better positioned to champion the Bank led MMT provider in West Africa.

First Bank,Nigeria’s largest Bank by capitalization and a very strong retail sector, the Bank’s solid knowledge of mass market and spread of Branch network positions the Bank as a formidable competition in the MMT space.

Not to be left behind is FinBank’s Flashmecash, Nigeria’s first Mobile Money service, very secure and reliable but hampered by the market strategy which tied down the service in the Banking hall instead of developing agent network to promote it and developing transaction channels on the MMT platform. If the Bank can overcome these two key challenges, Flashmecash may end up occupying a space on the big league table of MMT providers in Nigeria.