By Tony Chukwunyem
Mobile Money Operators (MMOs) in the country sealed N329.12 billion worth of transactions in the first three months of this year, New Telegraph has learnt.
An analysis of the latest e-payment industry factsheet released by the Nigeria Inter-Bank Settlement System Plc. (NIBSS) also indicates that the number of agents used by the MMOs stood at 5,304 during the review period.
The report further stated that the N329.12 billion was achieved in 15.25 million deals among the 21 MMOs licensed by the Central Bank of Nigeria (CBN), adding that the total number of mobile money users during the period stood at 1.5 million.
It also disclosed that all the 21 MMOs have been integrated to NIBSS platform for interoperability.
However, further analysis of the NIBSS fact sheet reveals that mobile money services remain one of the channels with the lowest transaction volumes and value compared to other payment channels.
For instance, according to the study, the total value and volume of automated teller machine (ATM) transactions in the first three months of this year stood at N1.57 trillion and 212.37 million respectively.
Analysts indicate that with the yearly market worth of mobile money transactions in Nigeria estimated at N1 trillion, MMOs clearly still have to step up their game if they are to play a significant role in helping CBN achieve its 80 per cent financial inclusion target for the country by 2020.
The banking watchdog, as part of its policy to extend financial services to the unbanked, launched mobile money service in 2011 and, so far, 21 organisations, bank and non-bank, had been issued operating licences.
Interestingly, critics have attributed the relative slow growth of mobile money in the country to CBN’s decision to adopt a bank-led rather than a telco-led model for driving the payment platform.
Nigeria’s mobile money market is currently bank-led, which means only lenders are licensed to operate in the space, while the telco-led model, which licenses mobile network operators, appears to be growing at a faster pace in neighbouring African countries such as Kenya and Ghana.
However, in a chat with this newspaper earlier in the year, NIBSS Chief Executive Officer, Mr. Adebisi Shonubi, blamed the licensed non-bank MMOs, whom, he said, were losing focus from reason they were granted operating licences.
Shonubi said non-bank mobile money operators were licensed to serve as transaction channels and as agent for deepening financial inclusion in rural areas across the country.
But he insisted that this category of mobile money licensees had turned away from their mandate of driving financial inclusion in the rural communities, as they now operate in the cities to compete with the same customers being targeted by the big commercial banks.
Shonubi said the development was due to a “misconception” and “misunderstanding” of the objective of the licences given to the mobile money operators.
He said: “I think a lot of the mobile money operators have some misconceptions about their licences. Some of them believe they got a banking licence. Yes, you get a financial licence, but mobile money is not banking licence.
“In essence, they are transaction companies. For instance, customers have the balance with the bank, but we are creating a platform for them to transact on it through mobile money.”
He also noted that most of the licensees picked up their licences because “it was cheap, without knowing what to do with them.
“Because of the initial low cost of getting the licence, a lot of people ran into it without understanding that it is a retail business and retail business takes a long time to grow. So, many of them were not adequately capitalised. For that reason, they always look for the closest thing they can hang on to do their business.
“That means, rather than go to the village and there are only one hundred people there, they chose to start doing their businesses in the cities, where there are thousands of people, half of whom already understand what the technology is, since most of them have smart phones and mobile money operators thus considered this easier for them to do business.
“Unfortunately, that is the same people the banks are targeting. What you now find is that ‘rivalry’ because everybody is targeting the same audience and that is not the original intention when they were being given licence.”
It would be recalled that last April, chief executive officers of commercial banks in the country, under the aegis of Body of Bank CEOs and CBN launched an initiative known as the Shared Agent Network Programme (SANEP) that had a target of attracting of 60 million unbanked citizens into the financial system in three years. The bank chiefs also, through the initiative, hope to enrol 40 million additional Nigerians for the Bank Verification Number (BVN) by 2020.
The bank CEOs said that they were committed to the aggressive roll-out through SANEP’s 600,000 agents in three years, beginning with 250,000 in 2018.
According to them, they planned to increase this figure to 500,000 in 2019 and that it will eventually hit the 600,000 mark in 2020.
Besides rolling out the outlets, the lenders also plan to upgrade all point of sale (POS) terminals in the country to about 130,000 points to make services such as funds transfer, bill payments and cash in/cash out easier for Nigerians.
Significantly, at a financial inclusion summit in Lagos last December, CBN Governor, Godwin Emefiele, disclosed that as part of efforts to drive its vision of 80 per cent financial inclusion by 2020, the apex bank would eventually license telecommunication companies (Telcos) to provide mobile money services.