Embracing Mobile Payment System in Nigeria

The Central Bank of Nigeria (CBN) had in 2010, given approval in principle to 16 mobile payment companies to operate and drive the adoption of mobile money in Nigeria. In 2011, the number of licensed companies increased to 19, designed to give further drive to mobile payment.  CBN had the intention of migrating the Nigerian economy from cash-based to electronic-based, hence the initiative in the first place. But it appears Nigerians are slow to adopt mobile money for payment of goods and services, a situation that has called for increased awareness creation that will sensitise Nigerians and open their minds to the benefits of the initiative.

Although some channels that are used for mobile payment such as debit and credit cards on Automated Teller Machines (ATMs), Point of Sales Service (PoS) terminal machine and internet banking, are driving the cashless initiative because Nigerians are beginning to get along with these channels. However,  the aspect of using mobile phones as a channel for driving mobile payment is yet to be fully embraced.

Since mobile phones have become widely accepted and used in the country by over 140 million telecoms subscribers, the CBN encouraged the introduction of financial services through that channel, which is expected to facilitate  financial inclusion of the unbanked populace, boost  economic activities,  deliver on employment and economic growth on the long-run. But from indications, many Nigerians are slow to adopting it, as they still prefer to carry cash.

Improving  mobile payment adoption

Worried about the slow adoption level of mobile payment in the country, the Electronic Payment Providers Association of Nigeria (E-PPAN) has advocated for strategic consolidated awareness creation for mobile payment adoption in Nigeria.
E-PPAN, which was commissioned by the CBN to create awareness on mobile payment, had since been touring various cities of the country, sensitising Nigerians on the need to accept and adopt mobile payment.

Speaking at the recently concluded Mobile Money Africa International conference tagged “Charting Africa’s Cashless Future”, held in Abuja, the Chief Executive Officer of E-PPAN, Mrs. Regha Onajite, reminded stakeholders that mobile payment is expected to foster financial inclusion of the unbanked populace, and facilitate economic activities in the country.

Onajite,  who spoke on the topic: ‘Awareness creation: A Strategic Approach for the Adoption of Mobile Payment System in Nigeria', said despite the ongoing efforts by key players such as banks, mobile network operators and mobile payment service providers (MPSP) in promoting and offering mobile payment options, absence of widespread customer acceptance of this innovation has created a big gap in the adoption of mobile payments as an alternative form of payment mechanism. While each of these players approach the market with different expectations, she advised that collective awareness creation is key to the success of mobile payment in Nigeria. Drawing on the experience with cashless Nigeria mobilisation where CBN led all industry players on a nationwide mobilisation, Onajite said no matter how great the mobile technologies and solutions are, they are useless if those that are supposed to use the technology and solutions, are not using them for lack of understanding of the benefits to their lives.

She therefore encouraged the mobile payment service providers to come together and launch a massive awareness brand campaign to drive the message of the benefits of mobile payment to the consumers. She noted that mobile payments face a variety of challenges but that awareness creation could eliminate some of the challenges especially as it relates to inadequate sensitisation techniques, consumer apathy, illiteracy, formal financial services in rural locations, fear of fraud from online experiences and selective approach of industry players, among others.

Onajite stressed the importance and need for aggressive awareness creation as a strategy for the general acceptability of mobile payment in Nigeria.

"Awareness creation is not only done by the use of advertisement and radio jingles, but effective communication of the new system through mass town-to-town sensitisation, city-to-city mobilization and awareness creation, social groups gathering sensitisation, among others, are key to a successful campaign for the banked, unbanked and mobile phone users," she said.

Onajite commended the efforts of government and the stakeholders in the payment industry for their commitment so far in building capacities for the propagation of cashless policy in Nigeria, and pledged that E-PPAN would continue to strengthen its collaboration with the appropriate agencies of government to advance the course of the payment industry. 

Mobile money in other regions

Alhough mobile money was first introduced in the Philippines in 2001, Kenya’s mobile money, also known as M-Pesa, continues to be the most successful mobile money deployment globally, which has transformed Kenya’s entire economic system.

Even though mobile money in Kenya was borne out of a peculiar need of the people  who work in far distant places to send money to their relatives and loved ones back home, the initiative has turned out to be very successful in that country.

Nigeria has an estimated population of over 170 million people, with over 140 million mobile phone users and has the potential of becoming Africa’s biggest mobile money market, yet since the introduction of mobile payment, the 'big bang' adoption that Nigerians had all expected seems to be eluding us as country.

Mobile payment is the person-to-person payment through the mobile phone or the use of mobile phones to conduct financial transactions. It is the latest electronic banking innovation and a revolution changing the lives of millions across the globe.

Nigeria, with an estimated population of over 170 million people, with over 76.03 million bank accounts and over 140 million mobile phone subscribers, is in the threshold of deploying mobile money with the potential to become Africa’s biggest mobile money market, in spite of its late adoption of mobile business.

Necessary structure and challenges

However, experts  have identified various structure necessary for the running of an efficient mobile payment system in the country to include the right policies, adequate technology deployed by service providers, good network facilities, better operating procedures that govern the whole process and adequate market strategy.

They have equally identified some of the challenges of mobile money to include inadequate sensitisation techniques, infrastructural deficit, consumer apathy, poor network connectivity and communication, illiteracy, absence of formal financial services in rural locations, allied fear of fraud from online experiences, selective approach of industry players, among others.

Addressing the challenges

Having identified the challenges, industry experts are of the view that some of the issues can be tackled using strategic awareness creation.

They want government to deal with the infrastructural deficits and poor network issues in the country and to increase awareness level, through the enforcement of agreed settlement schedule for merchants, deliberate industry penetration plan for rural and semi-urban areas, provision of sufficient security on payment platforms, among others.

They also want government, banks, telecoms operators, and payment service providers, to jointly develop strategic awareness campaign, that will capture the interests of Nigerians in adopting mobile money. They said there is need for all the parties to build an understanding among the people and practically demonstrate the workability of mobile payments to the public.

Educating the public on the safety of their transactions, through the use of mobile payment platforms, is also necessary, the industry experts said.

In order to achieve this, the experts want government to deploy such tools as interactive sessions with selected key stakeholders, consultations with community leaders, organising roadshows with drama, music and dancing, hands on demonstration, and open air sensitization campaign.

With adequate sensitisation and harmonisation of the people on mobile payment, the initiative, no doubt, will bring about transparency, improved remittances and economic activities across various sectors of the economy, both in the urban and rural areas.