How do we transition to a cashless society in Nigeria?

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In the second week of April insight2impact, Lagos Business School and Data Science Nigeria hosted an event at the Lagos Oriental Hotel. The topic for the evening was “The future of digital payments in Nigeria”.

Earlier that day, the insight2impact staff (who are from South Africa) needed to pay a local service provider for the event. The first hitch was, while the service provider owns a bank account, they did not have a POS device to accept on-the-spot digital payments. The visiting team attempted to transfer money directly into the provider’s account but were unable to transfer from a South African credit card to a Nigerian bank account. The team then attempted to withdraw cash from an ATM. They were again unsuccessful, as the amount was too high – they were unaware of the withdrawal limits at ATMs in Nigeria. They even attempted to swipe for cash at the bureau de change, but there was no POS at the time, nor enough cash. Eventually, multiple staff members withdrew many small amounts – enough to pay a deposit (about half the total fee) and guaranteed the remainder via international transfer.

The POS challenges or the ATM withdrawal limits will not come as a surprise to many Nigerians, but it did remind us that while we are excited about the potential of digital payments in Nigeria, the reality is much more sobering. With this incident in mind, the burning question posed at the event was “How do we transition from where we are to a cashless future?” Or, more realistically, how do we become a cash-lite society/economy?

The nationwide push for adoption of digital payments is admirable, but we must first consider our infrastructure – a challenge across many areas of our lives. If the underlying payments … Read More...

FirstBank reports N176b worth of mobile money transactions

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Nigerian lender, First Bank has reported $490 million (176.65 billion) worth of transactions through its mobile money agents.

The commercial bank said through its effort to deepen financial inclusion in Nigeria, its agent network which is currently at more than 22,000 has been able to record the above mentioned worth of transactions.

“After a successful roll out of the Firstmonie Agent network 2018, the business has grown to a network of over 22,000 agents processing over $490 million worth of transaction in monthly value and a unique transaction count of 10 million monthly,” Gbenga Shobo, deputy managing director, First Bank, said recently in Lagos during the Future of Finance West Africa Conference.

The financial institution mentioned that with over four million customers, the Firstmonie wallet platform is expected to its mobile money agents to 50,000 in 2019.

“Firstmonie has had a transformational impact on reaching low-income and historically unbanked households in Nigeria. It is integrating them into the wider financial system by providing access to a range of banking services including account opening, fund transfer capabilities, Identity management (BVN) and savings,” Shobo said.

Also, Chidinma Lawanson, Consultant, International Finance Corporation (IFC/World Bank) said that impressive growth recorded in Africa’s financial inclusion was driven by mobile money and agent banking.

She disclosed that mobile money users in Nigeria increased from 1.6 per cent in 2016 to 3.3 per cent in 2018, adding that adoption of mobile money in the country was still low.

According to EFInA, about 36.6 million Nigeria adults do not have access to financial services; this represents 36.8 percent of the total adult population of Africa’s most populated nation.

The Central Bank of Nigeria (CBN) therefore has about 16.8 percent financial exclusion gap to bridge in order for the country’s apex bank Read More...