Nigeria: Your Phone As Your Bank Account!

 By Obinna Chima

Obinna Chima writes that the adoption of mobile banking has the potential to give millions of people access to payments, fund transfer services, and would open up access to a broader range of financial services.

Life is becoming easier. With your mobile phone, you may no longer have to go into the banking hall to deposit, withdraw or transfer money. Mobile phone subscribers can also transfer money to any mobile number - and spend the money directly from their mobile money account to pay for goods and services.

Globally, mobile banking is becoming a powerful tool for building more inclusive, stable, and secure financial sectors. The potential of mobile technology to improve people's lives is growing exponentially.

According to the latest worldwide market study by Juniper Research, one billion people globally (1 in 7 people on the planet) had used their phones to perform at least one banking transaction as at the end of 2015. The research authority projected this figure to grow to two billion by 2020, representing 37 per cent of the global adult population.

Mobile banking has been described as an innovation that lowers trading costs, transaction time and allows for immediate financial transfers (credits and debits) by both formal and informal sectors.

It has the potential to drive financial inclusion by providing efficient transaction options and greater reach. Mobile banking is also a tool for economic growth and development, if fully explored. It enables monetary transactions to be done on mobile phones through text messaging.

Therefore, as internet penetration continues to deepen in Africa, the use of mobile phones as the new and preferred banking channel is expected to take centre-stage. Already almost all banks in the leading countries on the continent have published mobile apps that enable a myriad of transactions such as bills payment, funds transfers, travel bookings and lots more.

In Nigeria, banks are taking it a bit further and have introduced USSD banking (Unstructured Supplementary Service Data) to ensure the mass populace that presently do not own smart phones are not disenfranchised and suffer financial exclusion.

USSD is a Global System for Mobile (GSM) communication technology used to send texts between a mobile phone and an application program in the owner network

The significant volume of Nigeria's unbanked population has over the years been a source of concern. This has also been severely constrained by the weak infrastructure in the country.

Although banks have tried to improve on this with the aggressive drive for expansion by deploying ATMs, the country's huge population of rural dwellers are yet to really feel the impact of all these.

Low level of awareness

A recent survey that had shown that 37 per cent of Nigerians are not aware of mobile banking services and as such, do not use the payment platform, is worrisome. According to the report by Philip Consulting, out of the remaining 63 per cent respondents that knew about the solution, 31 per cent were between the ages of 26 and 35 and constituted the majority. Also, 15 per cent were between 36 and 45 years, 10 per cent between 18 and 25 years, five per cent between 46 and 55 years and one per cent each for the under 18 and over 55 years age group.

Also, another survey by the NOI Polls had also attributed the slow pace of adopting the mobile banking services to the low public awareness on the payment transfer system. As a result of this, experts have stressed the need for improved awareness.

In addition, banks and other mobile money operators have also been advised to significantly increase their investment in mobile money technology so as to encourage more users of that means of money transfer.

On its part, the Financial Derivatives Company Limited (FDC), a financial advisory firm, had noted that borrowing from Kenya's story, mobile banking remains the most feasible means to create a successful cashless economy.

It added: "The major grey area according to the central bank is the ability to control the platform and the anticipated effect on monetary policy since consumers do not need bank accounts in order to use mobile banking services.

"The mobile banking platform in some sense creates another 'bank' which may be difficult to regulate. Therefore, the CBN may be unwilling to adopt the mobile banking platform under the cashless policy model."


Analysts at the FDC had also projected that the high level of subscribers to GSM in the country was expected to translate into an increase in bankable Nigerians.

The research and investment advisory firm also noted that mobile payments was infinitely more efficient than the cheque settlement system, adding that mobile banking product would lead to a significantly higher velocity of circulation and financial intermediation.

The value of mobile banking transactions in Nigeria stood at N8, billion as at the end of June 2016.

But the Director, Banking and Payment System, CBN, Mr. Dipo Fatokun highlighted power, telecommunications network, among others as some other challenges facing mobile banking.

According to the CBN, it opted for the creation of an enabling regulatory environment as a policy path towards achieving availability, acceptance and usage of mobile payment services in the country, after it identified person to person payments (over the mobile phone infrastructure) as a practical strategy for financial inclusion of the un-banked.

The overriding vision, the apex bank explained, was to achieve a nationally utilised and internationally recognised payments system.

"The objectives of the regulatory framework are: Provision of an enabling environment for mobile payment services in reducing cash dominance in the Nigerian economy; specification of minimum technical and business requirements for various participants in the mobile payments services industry in Nigeria," it had stated.

Zenith Bank's Solution


Zenith Bank Plc, one of the industry leaders in terms of tier-1 capital is a major promoter of mobile banking channel. The bank which had unveiled its *966# USSD banking solution, believes that it would help drive the nation's financial integration programme being championed by the CBN.

A report disclosed that Zenith Bank's *966# USSD banking solution themed the 'Easy Way to Bank' enables customers of the bank perform financial transactions on all known mobile phones, without having to go on the net or download a mobile app.

"To open a Zenith Bank account, people only need to dial *966*0# and follow the prompts. An account number is automatically generated for the customer and they can start running the account after a short visit to any of the bank's branches.

"To perform transactions with the solution, the bank's customers are required to perform a one-time registration by dialing *966*00# and following the prompts," it added.

It also provides subscribers the opportunity to carry out functions such as to check their account balance, airtime purchase, carry out funds transfer, among others.

It added: "Eazybanking by Zenith bank is a convenient, fast, secure, and affordable way to access your bank account 24 hours a day, seven days a week through your mobile phone without internet connectivity. It is a session- oriented service unlike SMS which is a store and forward based service. This service is available to all individual account holders (except ZECA and Premium account holders) with any phone that runs on the GSM platform."

It explained that the mobile banking platform is different from other technologies used like SMS, GPRS and application based services because it provides an interactive browsing experience; available on all GSM handsets; has an in built USSD encryption and "no store just forward" facility for performing secure transactions; and is faster.

In terms of security, it described Eazybanking as being safe as it has different levels of authorisation that ensures banking transactions and information remains private.

"The service can only be accessed from the number registered with the bank for transactions notification. It is available to all Zenith Bank individual customers. Target customers are low income earners with non- feature phones. Cumulative transfer limit is N100, 000 daily. Cumulative transaction limit on airtime top-up is N3, 000 daily," it added.