The above-named article (BusinessDay, April 10, 2013) refers:
There is too much hype regarding mobile payments in Africa. Thanks to M-Pesa in Kenya, there is a global belief that with 80 percent of Africa’s population being unbanked and the dramatic adoption of mobile phones across Africa, one can simply establish a mobile payments operation in any corner of the continent and expect the same fast-paced level of success. The reality, however, is that adopting mobile payments is not that simple. Even M-Pesa is learning, from its not-so-successful foray into the market in Tanzania and South Africa, that there is no “cut and paste” approach for introducing a successful framework to the rest of Africa.
Mobile payments can be successful but it will take the realisation that Rome was not built in day and that each country has unique challenges that need to be addressed. What worked in Kenya will not translate so easily or so quickly across the rest of Africa. So revaluating what we term as “success” where mobile payments are considered is a good start.
This is an attitude we definitely need to adopt in Nigeria. I am as optimistic about this sector as anyone else – I have poured the last four years of my life into starting what is now the #1 mobile payments company in Nigeria, Paga. With all my optimism I believe there will only be 33 million users of mobile payments in Nigeria by 2015. I hope this is low, but that is the estimate I use in our business planning. Thus, when I hear the view that mobile payments is not working, I wonder where these naysayers are coming from!
Read also: Visa, Airtel to extend mobile payments to 7 African countries
I argue the opposite – mobile payments in Nigeria are already a success. We should not get carried away by the decision of the Central Bank of Nigeria (CBN) to issue over 20 licences and most of those companies not visible yet. If we look at other countries around the world, there are only one or two companies of any scale in mobile payments. In the entire United States there is only one of real scale – PayPal. To gauge success, we should look at the numbers. Given that the CBN has not been releasing industry numbers, I can only look at the numbers of my company, Paga.
Paga received its full licence in November 2011, making 2012 her first full year of operations. In 2012, we went from 40,363 users to 382,063 users – 847 percent growth (faster than M-Pesa in its first full calendar year of operations). In 2012, Paga processed over 918,000 transactions worth over N9.8 billion. 2013 is already off to a fast start for Paga – by the end of March 2013, Paga has processed over 672,000 transactions worth over N8 billion. A significant majority of our transactions are performed at one of our over 2,100 agents located in 150 towns/cities across Nigeria. These numbers make Paga arguably the fastest growing mobile payments company in Africa!
If the Paga numbers were the entire industry, I would argue that mobile payment is successful. However, I know some of our competitors are also out there and seeing transactions. So personally, I find it difficult to accept that “mobile money is not getting traction in Nigeria and across West Africa”.
Undeniably, there have been issues that have slowed down adoption, but the CBN has effectively addressed these issues and I am confident we will see even greater adoption this year.
The potential for mobile payments in Nigeria is huge. Demand might be seen as low now, but that is because the industry is still a way off in exploiting the full potential of the market. However, we should not be messaging that it is not successful. Also, the CBN should publicise industry numbers on its website – it is vital that all know the industry numbers and see that Nigerians are adopting the services.
Creating a long-term and successful mobile payments infrastructure within Nigeria is never going to happen overnight. We need to be more realistic in our expectations. With an average of 8,000 transactions a day on Paga in March, we are well on our way. Every minute six Nigerians are using Paga to either send money to friends and family, pay bills and merchants, or buy airtime top-up. With just one year and five months of being licensed – one can reasonably conclude nothing but early success!
