Recently, the working group of Nigeria Communications Commission, NCC and Central Bank of Nigeria, CBN convened a stakeholders forum to fine-tune the planned implementation of mobile money in the nation's economy where the President of Medallion Technologies, Mr. Ike Nnamani was a guest speaker. In this interview, he shed light on the workability, benefits and the potentials of the policy. Excerpts:
In the interest of a layman, tell us what mobile money is all about?
Mobile money basically involves the use of mobile phones to carry out financial transactions and it comes in various forms and processes. It is as simple as using your phone to access your bank account to check balances.
The more advanced part of it requires using your phone as a means to carry out some transactions in terms of payment of goods and services, not by exchanging your phone in return for service. Accessing financial transactions by means of communication to make it happen. Mobile money is basically a way to facilitate financial transactions among people, using the phone as a medium to make it happen.
Who are involved in the implementation plan?
Stakeholders in mobile money are varied. First is the regulators, who are responsible for creating the policies and guidelines that should guide it. The role of the regulator is to ensure that when people say you have converted a financial transaction, the recipient gets value for that money and has not been cheated out of his or her money by use of the phone.
So, they have to create guidelines, procedures and policies that must be adopted to make it safe and secure. That is why the central bank of Nigeria is the one issuing the license and approvals to those people that wanted to be involved in mobile money services.
Because mobile money involves the use of phones also, it needs the regulator, in this case, the Nigeria Communications Commission, NCC to also create a guideline under which people that have been approved by the central bank can now interface and interact with the mobile operators and other stakeholders in the telecom side of the industry. So, you have two people on the regulatory side.
Then you have operators, those who have a solution that feel they can offer as a class of business for consumers. Those are the people their license were approved in principles and others were tentative licenses by the CBN after they have conducted approval of consent.
So, you got those as operators in form of solution.
Of course, the subscribers are there . You have to be customer to these people. Then, the infrastructure providers like medallion are a bridge between the telecom operators and mobile money providers, providing them connectivity they need to access their platforms and access the subscribers on the telecom side.
Don't you think there will be a conflict of interest between the two regulators?
No, both regulators have been existing seamlessly before now. What basically happen is on the telecom side.
The regulator has to come up with the standard that the infrastructure providers are deploying, so that they can interface with the telecoms providers network. You don't want somebody to bring a server on a equipment and then the equipment creates a distortion to existing telecom infrastructure. In the same plate, CBN is ensuring that if money is sent through the mobile phone, it gets to the the recipient.
The agent network is responsible if something happens to it. This is where the CBN comes in because anything that has to do with money, it makes sure it gets to its destination. We absolutely don't see any conflict of interest instead we see convergence that collaboration in technology is leading to.
Is it not different people saying broadcasting arm of the industry being handled by NBC and NCC. Also, even though with convergence you will begin to see link between broadcasting and telephone.
Both regulators serve the two ends and have been working together before the policy came out. NCC and CBN working group spent a lot of time to come up with a framework. So, what ever issue they have must have been resolved at that initial stage.
Are you saying that mobile money will engender convergence at the long run?
Yeas, mobile money is convergence between telephone and banking.
With the planned introduction of mobile money into Nigeria economy, what difference are we expecting?
It is good for the economy because different licenses have got different offer but what is generic among all of them is the fact that they want to make life easier for people on the banking side.
Some of the banks for instance have a minimum amount one has to deposit for him to have a current account and the people at the lowest echelon of the society cannot afford these bench mark anymore but with mobile money, they do not have limitations.
They literally have a bank account with mobile money through their mobile phones. This time their current account number in this case is their mobile phone. It is something we can't run away from. That is the future and we are not relenting on making it work in Nigeria. These things are already available in other parts of the world, and it has led to economic development of those that have adopted it.
So, we are definitely hoping that the same level of development and progress will be made in Nigeria market when mobile money is fully embraced.
The advantage is that today, we have more people with telephone than those with bank accounts. It will be a way to bridge that gap to see that everybody with phone can have bank account. It will enable banks keep a proper record of the size of money in the market because when you have more people in the informal market, it is difficult to plan for economic development.
This will also help determine the volume of money in the circulation and provide data which those in the financial sector will need to be able to do their job well.
With this, it is no longer be mandatory for people to go and open a bank account since they have their phones.
What are the economic benefits?
It is going to bring in more people into banking industry. That way, there will be more money in circulation that is accounted for because now you are going through formal channel. Secondly, it is also going to make some of the services and telephone network easier to achieve. Though, we are not fully sure, but we are hoping that it is going to make some of these services cheaper. That is an advantage. A lot of people will like to key into it, coupled with the traditional convenience it will give.
What are the possible intervention areas you see in the implementation?
There are areas of intervention but it depends on the type of service a particular provider and what they would want to do. Some of the services we have on telephone network are going to make it easier.
One area I identified , which I think the regulator has to look at on the case by case basis, is the area where a service provider that is targeting the unbanked, and you find out that it will cost more putting infrastructure in the rural areas to be able to tap into that market. Unlike the urban areas, where the infrastructure is already in place.
So, if service provider is interested in going into rural areas, such licensee may need to get some concessions from government in terms of subsidy and assistance that may be necessary to get them going because investors want to be sure that whoever that is going to provide such services can guarantee their investment. Here intervention need to come from government. Secondly, because this is new, there is need for close monitoring and regulation of infrastructure being deployed and services offered.
More importantly, subscribers are very much interested on who to be held responsible if something happen to their money.
Here, policy needs to be in place because this is where people intentionally become fraudulent. So, we need to work out that thin line between fraud and system failure.
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