Exploring the intersection between M-Vas, digital money and MobileMoney in Nigeria - Interview with Simon Aderinlola
National Coordinating Consultant, WASPA-Nigeria Gte
He wil be speaking at the MobileMoneyExpo on Feb 6th -7th at the Lagos Orientals Hotel,.
What is your assessment of the Nigerian and West African mobile payment space?
Protracted early days. Slow growth. High churn rate of players (justifies CBN’s not locking the licensing to just the earlier licensees). Mobile Money in Nigeria had much more promise than what we presently see. I am not taken in by the # of customers or transaction volumes the MMOs bandy around happily. At this stage in the evolution of the service, it should have seeped deeper into our daily consciousness. I don’t think it’s yet hit mainstream an I presently cannot discern any clear front-liner among the MMOs (apart from whoever uses the machinery of media most creatively). We hope to see a serious licensed player this year..so much ground to cover.
Is Mobile Money a new phenomenon in Nigeria?
Yes and No. YES, as in how it’s defined by the CBN framework in shape, form and deployment. On record, it’s a 1st ever and the first-batchers commenced piloting Feb 2011. NO I say, in the sense that tens of millions of Nigerians already know how to turn cash into “airtime”, not just for calls and P2P SMS, but more relevantly to our context, as a currency for digital purchases. I do not want us to mix this up with the business perspective of an airtime agent’s ease of transition to being a MM agent. I am speaking of the actual customer at the last mile. A steadily growing proportion of the mobile operator’s customer base is getting VAS-aware. In my estimation, the learning curve is less steep if we correctly approach the adoption incentive and invite proposition therefrom. That’s where I am starting from.
What is the intersection of VAS and MobileMoney?
There are similarities and complementary feature sets. I will assume that by VAS here, we mean m-VAS. VAS enriches the voice-only + P2P-SMS experience, and it’s application is limitless. Mobile Money comes with the promise of a fast, secure enabler to something we already know and have, a ‘Second Life’ of sorts, to cash. if I may illustrate, e-payments had a 400-meter race track to cover to achieve adoption levels that brought people from a cash-spending backdrop. M-payments have partly a cash-based society and partly an e-payment-aware society to leverage upon, so you could say mobile had a 60-meter dash in comparison. m-VAS grew on mobile and so it’s an ideal door-opening, user-perception host to Mobile Money.
Are there significant differences between MobileMoney and digital money?
Maybe not. We need to be careful about semantics here. Mobile Money is digital money, but the reverse is not exactly the same. Digital money captures a much wider plethora of digitized financial instruments that represent units of value exchange.
With MNOs in firm grip of mobile content, are there opportunities for VAS providers to monetize contents outside the traditional channels?
This hits at the core DNA of my work in the next half a decade, hopefully. Preparation, doggedness, belief and nimbleness are the essential elements that any who plan to sit astride these two racing horses must apply. In Nigeria, much unlike Europe and the Americas, the owners of mobile content (and by that I mean those who source, create, own IP for, edit, maintain server infrastructure, aggregate and indemnify AS WELL AS MARKET) who use the operators to deliver content and collect money give away up to 80% of the EUP (end-user price) to these networks in a take-it-or-leave-it relationship. Just like the hemmed-in Jurassic park dinosaurs, this relationship will soon give way at the seams as it is not fairly symbiotic. Thus, the “grip” you now see will, if the VAS players are serious and consistent, flip on its head in a half decade’s time.
What is the impact of the limited availability of USSD and STK in the Nigerian market space on MobileMoney uptake?
As much as they compete, the operators seem to cooperate in voicing to VAS providers the now stale line: “USSD is not yet commercially available to 3rd party (VAS) providers”. I hope they do not plan to make it available when the unstructured signaling channel becomes obsolete technology. From day 1, the NCC was on the panel that assessed and shortlisted MMOs. USSD and maybe STK service access should that far back have been mandated as a must-have ingredient for top-notch rollout and user experience. MMOs ran pilots via WAP, app, SMS in uncertain circumstances. At a point, some licensed MMOs believed they needed to get a VAS license. Some who sourced overseas USSD access got their service delivery messed up. USSD MM creation is not rocket science. You can’t stifle VAS/MM adoption and yet ask why it’s not growing
Your advice on how to reach the mass market in Nigeria?
Assuredly I’ll hold back some details of my blueprint, but topline, stage 1 is that Mobile Operators (who are still annoyed at CBN’s exclusion), regulators (CBN, NCC) and licensed operators meet to identify the hurdles and how to remove them. Once that is done, stage 2 is that MMOs need to hone their individual and joint strategies (mass market, niche market approach) and create self-regulating rules of engagement as they lock horns, so they build synergies beyond the mandated interoperability and not work in silos. stage 3 is to identify the highly patronized economy segments and seek ways to transit the users of cash and bank today to mobile money. The Bank-led MMOs seem to be starting with that. StanbicIBTC, for example will this year, we learnt, be developing strategies to pitch *909# to its subsidiaries so we see, hopefully, a voluntary mass transit from their pensions and other service units, to mobile Money.
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