MOBILE MONEY: TELCOS PUSH AGGRESSIVELY FOR PAYMENT BANKING SERVICES LICENSE
Telecommunications companies, telcos, in Nigeria are not leaving any stone unturned in their quest to play in the mobile money space. Although telcos say their sole purpose of seeking formal participation in this market segment is not purely commercial, rather a response to government’s quest to deepen financial literacy in the country, there are clear evidences that if they have their way, they will still make a business kill.
Mobile Money allows customers to transfer or receive money to wallets across all telecom networks, which offer mobile money services. It also allows users to transfer money between mobile wallets and bank accounts Mobile Money Transactions in Nigeria has witnessed tremendous growth over the last half a decade. From just under 50,000 transactions a month it grew to about 3 million transactions a month. At some point in March 2016, the Central Bank of Nigeria, CBN, said mobile money hit an all-time high 5.1 million transactions with a transaction value of about N49.4 billion.
In July, transactions jumped to N77.7 billion and as at December that year transactions were in excess of 6.5 million. The growth parameters, have however, been in geometrics since then. According to CBN also, mobile money was the greatest driver of the impressive records of e-payment channels’ transactions which hit N65.3 trillion in the first half of 2018. With these statistics in mind and with the plans to turn the over one million airtime agents across the country into mobile money agents, the services will improve, the epayment channel market will expand and it will not be difficult to guess who will smile to the banks with a huge chunk of the revenue.
However, the argument against the telcos has been that if allowed, they could diminish the essence of retail banking and possibly drive operators out of the market. While the telcos have repeatedly denied bieng competitors to retail bankers but could complement their efforts, many technology industry practitioners have also dismissed the argument. Countering the argument, a senior official of one of the top GSM operators in the country who pleaded anonymity, said: “We are not banks but we are service providers, the banks should be our major business partners to support what we do as we support theirs too.
All the transactions that people do today the banks are the custodians, they hold these funds, they ensure that the funds are also protected from the customer’s point of view. So looking at it dispassionately, the banks have a lot to gain” He called for better collaboration between the banks and telcos to improve the mobile money industry in the country. Also, Irish vendor and software provider, CR2, has recently advised the Banking sector in Nigeria to open itself for cooperation with the telcos or out rightly compete with them in the mobile money space because with recent tech developments, it is no longer fashionable to shut them out of the services.
The solution provider which just won the award of ‘Excellence in Channel Banking Software Solutions’ at the Nigeria edition of New Age Banking Summit 2018, said in the current technology world creating results together is the most potent growth weapon. Chief Commercial Officer of the company, Mr Kieran Kilcullen, said that in Ethiopia, a financial institution, Dashen Bank launched a mobile wallet, Amole, which offers mobile subscribers digital payment capability and access to aggregated digital products and services from retailers, the entertainment industry, airtime dealers, bill payment points, Airlines, social media players and third-party service providers.
He said such competition cum cooperation with telcos has helped the bank trigger the growth of e-commerce in Ethiopia and promote financial inclusion across the country by ensuring a majority of the population in the country are roped into the financial inclusion net using technology. Also supporting the telco’s in this campaign is veteran economist and Lead Economist at Time, Trade and Commodities (TTAC), Mr Tunji Andrews. In a paper he delivered recently, Andrews said: “To drive the nation’s vision of 80% financial inclusion as stipulated in its National Financial Inclusion Strategy, we must push through with CBN Governor, Godwin Emefiele’s remarks on eventually giving licenses to telecommunication companies (Telcos) to provide mobile money services.