The Deputy Managing Director, eTranzact International, Hakeem Adeniji-Adele, has identified the Nigerian culture and penchant for cash transaction as the bane of digital payments in the country.
He made the assertion as the latest figures from the Nigeria Inter-Bank Settlement System, which put the total value of transactions on Automated Teller Machines at N1.5tn in Q1 2019, while mobile money operations and web payments were N810.1bn and N107.6bn; respectively.
According to Adeniji-Adele, the figures point to the fact that Nigeria is still predominantly a cash-based economy.
“So far, the Central Bank of Nigeria has granted 79 licences to players in the payment system while another 26 have approvals in principle. This calls into question the level of cash circulating in the country. Nigerians love to handle tangible money; it’s a mindset thing,” he stated.
The total value of ATM transactions in Q1 2019 and the fact that it’s almost impossible to go a day without cash in Nigeria lend credence to the claim that the economy is predominantly cash-based, he pointed out.
He believes that the culture is being eroded, as this aligns with NIBSS’s recent figures in comparison with Q1 2018 where ATM transactions with a total value of N1.57tn was higher than Q1 2019 by N70bn.
For inclusion, he urged players in the digital payment system to develop products and services according to people’s culture.
“People should be enabled not because the ecosystem hasn’t really grown that much to service the under-banked and unbanked,” he affirmed.
According to him, there is need to understand that a culture is in place and technology has to be built to fit it, adding that the future of digital payment in the country should be collaborative.
He noted that in October 2018, CBN had published an exposure draft of the new licensing regime for payment system providers in the country.
The draft somewhat puts a barrier on businesses, preventing companies that don’t have enough financial capabilities from playing in the payment system. For instance, the minimum shareholders’ fund for a mobile money operator is N3bn ($8,273,400), which is definitely a great barrier to entry for start-ups.
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