BY DAYO OKETOLA
Faced with inadequate distribution and agency networks, NIPOST and other stakeholders are in the forefront of initiatives to boost mobile money penetration in the country, writes DAYO OKETOLA
Mobile money, which involves the transfer of money from one mobile phone to another without any need for a bank account, is a game changer expected to make significant impact on the country’s financial and e-Payment landscape in 2012 and beyond.
The Central Bank of Nigeria, in 2011, issued mobile payment provisional licences 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.
In view of the preparedness of the licensed operators, who scaled through strenuous CBN testing and evaluation, experts envisage huge transactions in the country’s mobile money market going forward.
This is also because there is a big market of over 80 million financially excluded Nigerians who have never had bank accounts, coupled with a very robust active mobile telephone subscriber base of over 90 million customers.
In spite of the many challenges hampering the complete take off of the mobile money system in Nigeria, experts particularly say that inadequate distribution and agency network will constitute strong road block to the system, if not urgently and properly addressed.
The country requires over 50,000 agents, who will serve as human Automated Teller Machines, doing cash-in and cash-out across every nook and cranny of the country, for the over 80 million financially-excluded Nigerians to significantly feel the impact of the mobile money revolution.
However, investigation reveals that all the 18 mobile money operators combined have less than 1,000 verifiable agents nationwide.
The Principal Associate, Mobile Money Africa, Mr. Emmanuel Okoegwale, who confirms this, laments that 1,000 agency points are grossly inadequate for the mobile money system.
He says, “The agency network that should make mobile money happen in Nigeria is not there now and this can affect the success of the mobile money system. In Nigeria today, we have less than 1,000 verifiable agents while in Kenya, there are 22,000 agents and 54,000 in Brazil.”
One of the problems, Okoegwale says, is that the mobile money operators are struggling to build individual agents network rather than “developing the agency network together and competing in the area of marketing, which saves time and resources.”
To address the problem, operators are currently leveraging the Nigerian Postal Service, through its wide network, to boost mobile money penetration in the country.
NIPOST is the dominant operator and regulator of the country’s postal sector with a network of 1,065 post offices and more than 3,000 additional postal agencies distributed nationwide in 547 of the 774 local government areas in Nigeria.
According to the Ministry of Communications Technology, the extensive network penetration into rural areas and the variety of services offered have enabled NIPOST to serve as a tool for the promotion of social, financial and digital inclusion.
However, NIPOST faces substantial competition from private sector operators in the postal sector. About 250 courier firms have been licensed and many transport companies (legal or illegal) are active in the postal market.With the mobile money penetration role assumed by NIPOST, expert say this is expected to further boost NIPOST’s standing in the country. This is in tandem with the provision of the draft National ICT Policy being promoted by the Ministry of Communications Technology, which seeks to restructure NIPOST and make it more competitive.
As such, NIPOST has signed agreement with nine of the licensed mobile money operators to provide its over 4,000 post offices and postal agencies platforms for mobile money services.
With NIPOST in the forefront, the postal organisation is working with One Network, an industry stakeholder organisation including the payment switches, financial institutions, insurance companies and system integrators, among others.
According to the Programme Director, One Network, Mr. Adesola Bickersteth, the organisation is working with NIPOST to develop the implementation framework that will be used to redefine who a postal agent is.
The aim is to transform the postal agent from just selling postal stamps and money order to carrying Point of Sale devices and service terminals for providing financial and citizens’ services to their communities.
He says, “One Network will be supporting NIPOST in putting together all the necessary Information Technology and infrastructure tools required to interconnect and manage 50,000 or more locations.
“One Network is also supporting NIPOST with the required human resources made up of experts from the electronic payments industry who have successfully built similar networks like the ATM network. That is why we also refer to the new agents as human ATMs”
Speaking on the current limitation of NIPOST, which only has about 4,000 points, Bickersteth explains that One Network is working with all the necessary stakeholders such as microfinance and other banks, the National Directorate of Employment, CBN, associations and cooperatives, local and state governments to contribute to building the huge network.
According to him, the actual target is 150,000 (1 per 1,000 citizens) over the next three years, adding that the consortium is targeting 50, 000 agents before the end of 2012.
He says One Network agents will not just be able to provide mobile money services but other financial services, such as providing access to microfinance, micro insurance, and utility payments, among others.
These agents, according to him, will also be able to provide citizen services such as public identity management, government services as well as related value added services like information management and online business support services.
Bickersteth says, “The public enlightenment campaign will start before the end of February and once people understand that becoming a one network agent in their community can be more lucrative than opening a chemist or provisions store.
“The business opportunities for qualified One Network agents are like when GSM started 10 years ago. It’s likely we will be looking at over 150,000 people applying to become One Network agents in their neighbourhood.”
He stresses that the initiative represents a great employment generation project that can take hundreds of thousands of Nigeria’s computer literate youths out of unemployment within a very short period.
Bickersteth says setting up proper structures and standards for qualifying and managing interested agents is at the core of the strategies being employed to drive the project.
“We have developed and piloted the business model over the past six months and we will be applying tremendous knowledge gain from that exercise in expanding to every neighbourhood across Nigeria,” he says.
Speaking on the challenges facing the project, he says, “NIPOST has signed agreement with nine of the licensed mobile money operators. The first challenge is how one agent will be able to provide services on behalf of all of them from one location. It requires a lot of services integration both technical and commercial as well.”
He, however, says that with high level of professional training, the mobile money agent can make 10 times or more money than if he was to be representing one mobile money operator.
The Chief Executive Officer, Nextzon Business Services Limited, Mr. Macauley Atasie has recently supported this move while reiterating the need to surmount the hurdle posed by inadequate agent network to mobile money success in the country.
He says, “Since agency is the heart of mobile financial services and the agents do not sell primary products of the licensee, it would be necessary to source, develop, train and deploy agents on a shared basis’ to improve viability,” he said.
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