NIGERIA:Mobile money transfer rises 43% on convenience, low cost, increased platforms
Mobile money transfer in Nigeria rose 43 percent over a ten-month period, driven by customer convenience, low transaction charges, and increased supply of online banking platforms, a BusinessDay analysis shows.
Volume of transactions (transfers) via mobile devices rose to 5.9 million in the first 10 months of 2018 from 4.1 million in the same period last year, according to data obtained from the Nigeria Interbank Settlement System (NIBSS). The value of mobile transfers rose 53 percent from N155.8 billion in 2017 to N238.2 billion as of October 2018.
Correspondingly, the volume of cheque transactions fell by 16.5 percent to 7.6 million from 9.1 million over the same period, according to the NIBSS data.
Nigerian banks are trying to catch up with their counterparts in other parts of Africa in the provision of online and mobile banking facilities as part of efforts to deepen financial inclusion in Africa’s most populous country. The Central Bank of Nigeria has set a target of 80 percent inclusion to be achieved by year 2020.
Dolapo Ashiru, a stockbroker, says this development is in line with the plan to migrate more bank customers to the mobile platforms, which is more convenient to both banks and their clients.
“More Nigerians are embracing online and mobile banking, and banks are aggressively rolling out mobile banking platforms and mobile applications,’’ Ashiru says, noting, ‘‘Also banks consider it cheaper and more efficient to encourage clients to embrace their online banking services than to engage in aggressive branch expansion.”
Ayodeji Ebo, MD, Afrinvest Securities Limited, says the increase can be attributed to the improved customer awareness as well as lower charges relative to other payment platforms. “Businesses have begun to integrate E-NIBSS to their platforms to ease payment processes at minimal charges,” Ebo says.
Stephen Nejo, a banker, states that banks have cut the cost per a mobile money transaction to N52.50 per transfer, down from N100, saying this was based on an agreement by the banks and CBN’s acceptance.
Ayodele Teriba, CEO, Economic Associates, says there is a decline in the number of cheque transactions because more people are catching up with mobile transfers than before now. “In the past, before you can do any transfer, you would have to go to the bank. But now you can use a token at home to do your mobile transfer anywhere,” Teriba says.
The number of mobile phone subscribers in Nigeria rose 15 percent to 162 million in September 2018, from 140.7 million in October 2017, according to figures on the website of the Nigerian Communications Commission, which regulates the industry in the country.
Part of CBN’s plan to achieve an inclusion rate of 80 percent in two years’ time is to raise ATMs from 11.8 units in 2010 to 203.6 units, POSs from 13.3 units to 850 units, Mobile agents from 0 to 62 units, all per 100,000 adults between 2010 and 2020, the banking regulator says on its website.