The mobile money industry is expected to record a lot of activities this year following various synergies among operators both from the financial and telecommunications sectors. But the issue of consumer awareness and education may pose a stumbling block to faster and deeper penetration. ADEYEMI ADEPETUN writes.
NIGERIA has seen remarkable gains on mobile phone service uses as there had been rapid uptake of various services, key among them is the mobile phone based solution for money transfer, better known as mobile money.
According to analysts, high mobile phone penetration and limited branch network of commercial banks and micro-lenders are expected to drive the growth of mobile money in the emerging markets of Middle East, Asia and Africa, where it is hoped to cross one billion user-base, growing into a $22 billion industry across Africa by 2015.
A recent report by McKinsey, stated that in the emerging markets, formal banking reaches a mere 37 per cent of the population, compared with the more than 50 per cent penetration rate for mobile phones.
Indeed, in Nigeria, there are over 90 million mobile phones, compared to about 22 million bank accounts holders in the country, according to the Central Bank of Nigeria (CBN).
This scheme, which assists in money transfer and information sharing, frees up consumer from the traditional banking system, as payment services are operated under financial regulation and perform from or via a mobile device.
However, creating a functional mobile-money model can be complicated, especially in a country like Nigeria, which is just embracing the initiative through a bank-led model.
The process calls for collaboration from two distinct domains, telephony and banking, as well as, for partnerships with a variety of players such as agents, some unfamiliar, to manage cash collections and disbursements and promote adoption.
As such, licensed mobile operators in Nigeria, with the right technology, agent network, risk management process and customer service, will not only capture the opportunity in the market but also have unique know-how that would be valuable in other emerging and frontier markets, either through strategic alliances or direct investment.
Already, the Central Bank of Nigeria, in 2011, issued mobile payment licenses to 18 companies to implement mobile payment in the country.
They include Monitise, Corporetti Support Services, UBA, GTBank, Ecobank, and IBTC Stanbic Bank.
Others are Hendomark, Pagatech, Eartholeum, First Bank, ETB, Fortis Microfinance Bank, eTrazact, Chams, Paycom, and M-Kudi.
Besides, the telecommunications firms in the country, including MTN, Globacom, Etisalat and Airtel have all announced strategic partnerships with the financial sector to expand the over N150 billion mobile money market potential in the country.
However, the major task lies critically in getting people educated and aware of the ease and immense benefits this process tends to offer. As such, the issue of consumer awareness became the major thrust of discussion in Lagos at the weekend.
Specifically, at the 66th Nigerian Communications Commissions Telecoms Consumer Parliament, with the theme: “Mobile Payments: The Consumer Perspective,” it was stressed that, deepening the scheme relied mostly on increased consumer education and awareness.
Majority of consumers that participated at the forum seem to be bothered with the workability, stressing that more education and enlightenment initiatives must come upstream if acceptability must be total in the country.
According to speakers, aside challenges including lack of infrastructure, poor and agent networks, security challenges; interoperability among others, the issue of faster adoption must be improved upon.
This to them, relied on awareness and education, especially, among the informal sectors, including the artisans, market dwellers, roadside mechanics among others.
Speaking at the forum, the President, National Association of Telecommunications Subscribers (NATCOMs), Deolu Ogunbanjo noted that for deeper adoption of the initiative in Nigeria, the issue of education, awareness has become very critical if the investment must be fruitful.
Ogunbanjo noted that the issue is beyond just making telephone calls, which is peculiar to most users of mobile phones, “this is a different technology, though on the same platform, but I will say consumer needs more education to get this right. Reason, why operators must explore every means to get the populace acquainted with the technology, especially those in the informal sector, who has little or no education, because of the financial implication.”
Underscoring the importance of more awareness on the part of operators, a telecom analyst, Ben Akugbue, said without opening up of the access channels by network operators, “it will be an uphill task to reach the masses and provide an easy and convenient means to access the service.”
According to him, mobile money should be a service that the urban and simple rural folks should be able to understand easily and use, this is why it is important to increase the education and its awareness.
Observably, he said population categories with lower levels of education happen to be the larger user category, stressing that the capacity for unschooled and semi illiterate persons to quickly capture the skills of manipulating the considerably sophisticated mobile phone menu items is still questionable.
Though not seriously impaired, the capacity of a wider population of Nigeria users is fairly curtailed by not being fully conversant with all that they can accomplish through the mobile.
Akagbue said deliberate interventions must be undertaken to successfully ensure that the targeted persons particularly the rural residents and females are empowered not only with technology but with skills and finance as well.
To prevent these community of people from lagging behind, he said they must be familiarised with the benefits and opportunities of mobile banking, adding that, calculated strategies to overcome hindrances require exploration so that these groupings can be converted into meaningful participants, who will utilise this technology for economic take off.
Speaking on behalf of the Central Bank of Nigeria, the Shared Service Executive, George Sansa, who said to ensure that consumers are protected in the mobile payment scheme, the apex bank will inaugurate a working committee on fraud prevention within the system, noted that more awareness was still required to deepen acceptability, especially in the hinterland.
Sansa, who disclosed that, out of the over 160 million Nigerians, only about 22 million have bank accounts (13.7 per cent), noted that, mobile phone penetration is far higher than banking penetration, stressing that there should some correlation between them so as to be able to drive and deepen financial inclusions in the country.
According to him, more awareness need to be created, especially for people to understand the enormous potential they can derive from their mobile phones, stressing that, the cost of handling cash is high, but that this system will reduce its effect.
Speaking on behalf of the NCC, Executive Commissioner, Mr. Okey Itanyi said the commission was working to ensure seamless interoperability between the telecommunications operators and the financial institutions involved, stressing that service providers are ready for real time online payment, which is aimed at building confidence in the consumers.
Itanyi disclosed that as part of efforts going forward, a dispute resolution committee has been set up that will see to ensure that consumers are protected, adding that measures are also been streamlined to deepen consumer awareness.
Continuing, he said NCC is working vigorously to tackle the issue of quality of service, which according to analysts posed serious limitations to the success of the scheme in the country.
“We are doing everything possible to tackle the issue of quality of service. It is not an issue that will be solved in a day. We have constraints, including power, security and others. It is an issue we will continue to drive to make it improves to about 98 per cent before next quarter. It is one of our major responsibilities,” Itanyi noted.
Speaking to The Guardian on the challenges posed by poor consumer awareness to this initiative, Principal Associate, Mobile Money Africa, Mr. Emmanuel Okoegwale said the services are still new and not yet common, so it will be expected that adoption will be gradual as more people become aware of it.
According to him, like a Russian proverb, it is better to see once than hear a hundred times.
“Most Nigerians are still hearing about it but yet to see it work. As we move into cashlite Nigeria era, alternative channels like mobile money will be more visible,” he stated.
According to him, the Central Bank as the regulator of mobile money services in Nigeria is running campaigns in major languages to influence the adoption of alternative to cash and mobile money is one of the channels.
He said the message and education could be better, stressing that the CBN has done a lot but they can do more.
But reacting to recent report from the Nigeria Bureau of Statistics, which stated that, about 49 million Nigerians can’t access mobile money because they don’t have mobile phones, Okoegwale said, “it is really not compulsory that mobile money must originate and terminate on the mobile phone. It is the desire of the regulator to promote mobile originating and mobile terminating transactions but in reality, you do not need to have a phone to use mobile money services.
“The agent’s network can generate a code or token that can be sent to anyone who can then visit another agent to redeem such token or code for cash. Having a mobile phone is not a condition to access mobile money services.”
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