The global development of Financial Technology (FinTech) has necessitated mobile network providers to drive financial inclusion in Nigeria.
The incursion of telecommunication companies into the financial services space has been a laudable development for stakeholders in the technology sector. A large number of them believe that these telecommunication companies have what it takes to bank the unbanked across the country.
Investors King gathered that two of the largest mobile networks in Nigeria, during the past week, commenced the operation of their Payment Services.
MTN, in its official statement, revealed that Nigerians will enjoy easy to use, accessible, and affordable financial services through its MoMo wallet.
On the same day, Airtel Africa also announced that it will roll out the full operation of its PSB SmartCash.
Airtel Group Chief Executive Officer, Segun Ogunsanya assured that SmartCash will help further digitise the economy and most importantly, help bank the unbanked by reaching the millions of Nigerians who do not currently have access to financial services by delivering current and savings accounts, payment and remittance services, debit and prepayment cards and more sophisticated services.
“SmartCash Payment Service Bank Limited (‘SmartCash PSB’) Services will initially be available at selected retail touchpoints, and operations will be expanded gradually across the country over the next few months,” Ogunsanya said.
What the CBN wants
The Central Bank of Nigeria has since, within the past years, intensified its commitment to ensuring a satisfactory financial inclusion rate in Nigeria. The apex bank released a supervisory framework for the operation of these payment service banks.
In 2018, CBN introduced a new type of banking license,the Payment Service Banks (PSBs), with the aim of leveraging the strengths of businesses such as mobile network operators while maintaining a bank-led rather than a telecoms-led banking model.
“The Payment Service Banks are expected to leverage on technology to provide services that would be easily accessed by the unbanked population and those who are in hard-to-reach areas of the country,” CBN said.
It is expected that through this development, Nigeria should attain the desirable height in terms of financial inclusion.
Currently, according to the data obtained by Investors King from Enhancing Financial Innovation and Access (EFInA), over four million (4,682,492) Nigerians have been financially included through its funded grant projects, including 2 million women.
Recall that the overall financial inclusion target was 80 percent by 2020, while adult Nigerians with access to payment services was to increase from 21.6 percent in 2010 to 70 per cent in 2020.
However, by the end of 2020, EFInA data shows that only 64 per cent of Nigerian adults were financially included, a report said.
This means that 36 per cent of Nigerian adults, or 38 million adults, remained completely financially excluded as at 2020.
According to the Apex Bank, the key objective of issuing PSB licenses is to boost financial inclusion especially in rural areas and facilitate transactions.
What Financial Inclusion means to Nigerians
Financial inclusion means that people have access to basic financial services like a savings account, credit and insurance. A higher exclusion rate in Nigeria could lead to a poorer population as lack of access to credit and insurance puts them at an economic disadvantage.
Financial inclusion is a strong lever for bridging income inequality, combating poverty and preserving social harmony. The CBN has accordingly been at the forefront of the efforts to drive financial inclusion in Nigeria by championing the development & implementation of Nigeria’s National Financial Inclusion Strategy led by the CBN Governor.
The Deputy Governor and Chair of the Financial Inclusion Technical Committee, had once said that the next phase of financial inclusion in Nigeria is to bank the unbanked women, bridging the inequalities in the sector.
Despite progress achieved to date, critical groups remained excluded, including women, rural dwellers and citizens in the northern area. To address the issue with women, CBN launched a Framework for Advancing Women’s Financial Inclusion in Nigeria in 2020.
The CBN is also leading the industry to implement the framework, which is expected to lead to significant increase in women financial inclusion in Nigeria.
By all indications, there is no certainty of meeting the 2020 financial inclusion targets until around 2030.
However, Nigeria can build on this initial progress and drive faster financial inclusion growth through digital financial services like mobile money, by creating an open and level playing field for a wide range of providers, creating the right environment for fintech to thrive, and encouraging partnerships between different providers.
Financial Inclusion: ZirooPay Targets Deeper Mobile POS Penetration in Nigeria
Nigeria’s retail Point-of-Sale solution provider, ZirooPay has embarked on an aggressive drive to deepen the penetration of its unique mobile POS assets.
In a bid to boost market share while driving financial inclusion by penetrating the underbanked market through its proprietary mobile POS technology, Nigeria’s retail Point-of-Sale solution provider, ZirooPay has embarked on an aggressive drive to deepen the penetration of its unique mobile POS assets.
Over the next months, ZirooPay hopes to grow its network of mobile POS around Nigeria by adding no fewer than 20,000 mobile POS, on the heels of a successful funding round, which has positioned it to tap into the growing opportunities in Africa’s retail sector.
Recall that ZirooPay is reputed for a patent of a unique and efficient mobile POS technology that enables small businesses to process card payments in real-time, even when there is no internet/data connection, strategically positioning it to drive financial inclusion in a country that has achieved only 63 per cent financial inclusion and 33.6 per cent of broadband penetration.
ZirooPay’s payments solution is fast, simple and reliable, delivering a 95 per cent transaction success rate for POS transactions compared to the industry’s average of 25 – 50 per cent. The solution leverages its unique and patented internet-free technology, to enable SMEs (across the retail, agency banking, hospitality and services sectors) to process in-person payments, track their sales, and manage their businesses from their mobile devices.
Beyond payments, ZirooPay also provides merchants with automated sales history, sales analytics, and inventory tracking to help them monitor and manage their businesses more efficiently. ZirooPay’s superior transaction success rate and the integrated nature of its service stand it out from the competition.
The payment provider, which started operations in Nigeria in 2019, has organically grown to 15,000 merchants processing over $500m in 10m transactions and looks to replicate this success across Africa.
Speaking recently, the Chief Executive Officer, CEO of ZirooPay, Omoniyi Olawale said this is part of several initiatives aimed at empowering more SMEs to take effective control of their businesses, adding that the firm is committed to deepening access to ZirooPay’s invaluable payment services for all sizes of retail business both in rural and urban centres in Africa.
He explained that innovative payment solutions such as ZirooPay will remain an imperative as wholesale and retail sectors continue to dominate Africa’s contribution to its GDP, even as population growth and rapid urbanisation continue to drive consumption across the continent.
He said, “ZirooPay has set out to build an operating system for retail in Africa by providing solutions that not only drive financial inclusion but also support the payment infrastructure needed for retail to thrive on the continent. Lack of reliable payment technology for the continent remains one of the major challenges that has hindered trade tremendously and ZirooPay Mobile POS solution will address this challenge.”
According to Omoniyi, while it is still early days for payments in Africa, ZirooPay understands the peculiarities of the continent’s infrastructure challenges and would continue to advance similar innovative solutions that will address the payment challenge on the continent on a sustainable basis.
GTCO’s HabariPay Limited Receives Final Approval from CBN
The management of Guaranty Trust Holding Company Plc (GTCO Plc) announced the bank’s payment subsidiary, HabariPay Limited has received final approval from the Central Bank of Nigeria (CBN).
The lender announced in its latest statement signed by Erhi Obebeduo, Group Company Secretary and General Counsel, and obtained by Investors King.
According to the bank, HabariPay will be used to expand GTCO Plc’s services to underserved markets and deepen CBN efforts at expanding the number of people in the financial system. This, GTCO said would contribute to the resilience of the global payment ecosystem.
Commenting on the new payment subsidiary, Segun Agbaje, Group Chief Executive Officer, GTCO, said payments are central to the development of financial services globally and represent a key growth area for the group.
“GTCO Plc has been at the forefront of delivering cutting-edge innovative solutions with its banking franchise and would leverage this capacity to transform the evolving payment space,” he said.
“With HabariPay, we have successfully created another pathway towards enhancing the service experience for our customers and creating more value for our stakeholders.”
“Our vision is an Africa where every payment is digital, and we hope to achieve this by increasingly leveraging technology to improve access to financial services for individuals and empower businesses across Africa with the right digital tools to thrive.”
PayPal Ventures’ First Layer 1 Investment has Been Revealed as Aptos.
In March, Aptos Labs announced a $200 million investment round, and now the company has confirmed that PayPal was one of the investors.
PayPal Ventures was one of the investors in Aptos Labs’ $200 million funding round confirmed in March, according to Coin Desk. Aptos Labs is bringing Facebook’s star-crossed Diem blockchain to life. PayPal Ventures’ first investment in a base layer product was made with this investment.
In a statement, PayPal Ventures investment partner Amman Bhasin stated, “We trust in the work that the Aptos Labs team is undertaking to establish a safe and scalable layer 1 blockchain.”
“The Aptos blockchain is constructed in such a way that it is both conducive to creating new rails and enticing to corporate clients and crypto-native developers, with the promise of greater dependability and security, faster transactions, and cheaper costs.”
PayPal (PYPL) was an early supporter of Libra, pledging at least $10 million to join the Libra Consortium. Following outrage on Capitol Hill, the corporation swiftly withdrew. Andreessen Horowitz (a16z) led the Aptos funding round, which included Multi coin Capital, a16z alum Katie Haun, Three Arrows Capital, Para Fi Capital, and Coinbase Ventures, among others. The involvement of PayPal Ventures was not disclosed in the initial statement.
Aptos is composed of the Diem (previously Libra) blockchain’s original creators, researchers, designers, and constructors. The blockchain was announced as the backbone of a stablecoin project by Meta Platforms (previously Facebook) in 2019, but the project never got off the ground due to legal difficulties.
Meta announced the shutdown of Diem earlier this year, and Silver gate Bank purchased the technology and other assets. Much of the work done by Diem-affiliated teams, on the other hand, was done under open-source licenses, which means that the intellectual property is free to use.
Two months ago, Aptos’ developer test net became live. The main net is expected to be released in the third quarter.
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