Mobilemoney Stakeholders to meet in Nigeria over Lowering Transaction Cost, 2016

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Mobilemoney Stakeholders to meet in Nigeria over Lowering Transaction Cost, 2016

By Benjamin Ameh

Mobile money involves the process of two parties exchanging financial value, using mobile devices in return for goods or services.
More than 250 delegates from over 25 countries are expected for the 6th remittance and mobilemoney expo to be held in Nigeria, Africa’s largest remittance recipient nation on February 2016 to discuss issues around lowering remittance transaction cost.

 

Africa pays nearly $2bn a year due to the higher-than-average cost of sending money to the continent with average cost to transfer money to sub-Saharan Africa at about 12 per cent, compared with a global average of 7.2 per cent according to the Overseas Development Institute, a UK think-tank.

 

The formal market for international and cross border money transfer to Africa is still young and faces typical emerging market challenges when compared to more established markets.

 

A competitive market space is required to foster technology innovation, access and drive the expansion necessary to reduce cost and reach underserved areas.

 

In a statement by Emmanuel Okoegwale, event director at MobileMoney Africa said “Africa has made great strides in mobile technology adoption and penetration; however, despite the pervasive coverage of such mobile networks across Africa, technological innovation has yet to drive down costs in Africa’s remittance markets.”

 

Remittance providers and stakeholders such as money transfer operators, financial services providers, financial technology providers, vendors, agent network operators, mobile financial services providers, regulators and stakeholders from the supply and demand side of the remittance industry will be meeting at the event to address lowering transaction cost by leveraging new innovations in the African mobile financial services ecosystem.

 

The barriers to cost-reduction, challenges and opportunities in the African remittance market, improving efficiency at the last mile, the role of non-bank financial institutions and the emergence of digital remittances such as mobile money, online transfers and crypto currencies in lowering remittance cost for Africans are some of the subject matter areas to be considered at the conference that will be held at the prestigious Lagos Oriental Hotel, Nigeria in February 2016.

 

In the report published recently by National Mirror, revealed that Nigeria’s mobile money market has Potential market size of mobile money services, also known as mobile payment in Nigeria, is worth $7.2bn (about N1.1trn) by 2015 per information gathered.

 

M-payment connotes financial transactions undertaken, using mobile device such as a mobile phone but still a subset e-payment ecosystem. Industry analysts said that since August 2011 when the CBN licensed 20 mobile payments service providers, there had been no significant transactions by Nigerians through mobile money services.

 

The report further confirmed the development from Mobility Lead, Accenture Nigeria, Mrs. Henrietta Bankole-Olusina, said since the CBN issued operational licences to the mobile money companies, there had been no significant adoption of the services.

 

“In spite of the country’s potential market size of $7.2bn by 2015, there have not been significant transitions through mobile money services as only four of the 20 CBN licensed mobile payment operators have interoperability,” Bankole-Olusina said.

 

Available data from the Nigerian Interbank Settlement Systems, NIBSS, also showed that traction in mobile payments in Nigeria remained very low.

 

The NIBSS explained that volume of mobile payment transactions amongst four inter-operable operators showed that as at September 2012, volume of transactions had hit 646, 000 valued at N3.55bn.

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But Bankole-Olusina has identified the need for the operators to adopt the right business model as a strategy to benefit from the potential huge N1.1trn mobile money market potential in the next three years.

 

“The key to success in mobile payments in Nigeria will not be based on only the technology or connectivity; it will be the business model,” she said.

 

However, the Managing Partner of One Network, Sola Bikersteth revealed that a firm established to drive financial inclusion in the country adding that the greatest challenge facing the inability of most of the mobile money operators to be “visible is poor agent networks.”

 

Bikersteth further pointed out that “One of the challenges that everybody has to face is that fact that the agent network is not yet everywhere. Nigeria needs about 160,000 mobile money agents all over the country.

 

“But like I said, it is going to take about two years before we would get to that stage where there will be mobile money agents attending to financial services customers in the country.”


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