The Regional President for Northern and sub-Saharan Africa, Network International, Hany Fekry, says a seismic fundamental shift is underway in Nigeria’s digital banking sector that many in the payments industry have been predicting for years.
Fekry made the submission in a statement on Monday, noting that digital payments were inevitable for the future but that Africa was yet to come closer to the global adoption rates.
According to him, the challenges in the digital payment sector in sub-Saharan Africa include infrastructure, low income levels and the well-established virtues of cash – immediacy, ubiquity and trust.
He said, “In Nigeria, cash has remained king and financial services have remained stagnant despite decades of efforts to do away with old-fashioned paper money,” until the COVID-19 hit.
The NI regional president, however, stated that in the aftermath of the virus outbreak digital banking emerged across Nigeria with heightening consumer demand for efficient ways to access banking records and complete financial transactions outside physical branches and traditional card payments.
“The fear of paper currency as a carrier for coronavirus has jolted the banking sector into massive digital disruption, signalling a powerful inflection point for payments in Africa. And we see this as just the start of the shift in how consumers, merchants and issuers choose to transact.
“Online deposit, mobile banking apps, cards and e-bills payment have become the norm overnight, with card and virtual card payments becoming one of the most important non-cash transaction channels,” he said.
Fekry maintained that the potential of plastic as a medium of exchange is unrivalled given its power to oust physical currency, adding, “Banks that build their Issuance business now not only contribute to the foundation on which this transition can take place, but also position themselves to reap the rewards of this seismic fundamental shift.”
The administrator was also of the view that as banks work to respond to the increased demand for digital payments induced by the pandemic, the institution needed to tap into the considerable advantages held by African markets including its youth demographic.
He noted that African youths have been increasingly engaging with financial products in different ways, ready to trail blaze the use of modern payment services.
In the current economic climate, “banks in Nigeria have been able to tap into our experience and expertise in creating virtual card solutions for emerging markets.
“Cash may not be gone just yet. But with this fundamental change accelerated by Covid-19, our payments ecosystem has now truly been ordained and will have profound implications for people, businesses and society,” Fekry added.
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