• Thursday, July 25, 2024
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BusinessDay

Recharge card sellers struggle to survive as buyers move online

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In 2010, Nonso Onyeka, a recharge card seller would be able to make up to N150,000 in revenue because the digital revolution powered by deep mobile penetration was just about taking off. People depended on him to sell physical recharge cards to stay in touch with their loved ones or conduct their businesses.

Today, the rise of mobile payment which allows Nigerians to buy and sell almost anything online means that sellers like Onyeka cannot depend on physical recharge cards to make ends meet.

“I make N10 on a N200 recharge voucher and less depending on the value of the voucher. I had to add provisions and snacks to support myself as the recharge card business started slowing down,” he told BusinessDay.

According to Nonso who has been in the business for over seventeen years, they used to be over forty selling airtime at Apapa Barracks, however, they are now about six.

The adoption of the digital method of recharging phones has led to a huge reduction in the sales of recharge vouchers by airtime vendors, leading to some quitting while others add other ventures to their recharge card business.

To move with the digital trends of recharging airtime, Nonso had decided to get a PoS. However, he has been unable to get one promised to him for about five months.

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As a result of convenience, people now adopt the digital form of buying airtime compared to some years back when Nigerians had to buy scratch cards and paper cards to credit their phones. This is done via various channels such as Unstructured Supplementary Service Data (USSD), Bank apps, ATM, and POS.

For Mama Chichi who has been in the business for over ten years, her own story is different. She says the business is still going well as she gets a lot of Customers who buy recharge cards from her.

However, she stated that one of the challenges she faces with the recharge card business is, sometimes when a customer buys the airtime which is on paper, they recharge it and get an error code which says “the airtime has been previously used”, after which she will have to refund the customer.

In a phone interview with Olugbenga Hammed, Manager, Go-To-Market, MTN Nigeria, 53 percent of airtime revenue comes from digital channels, while 47 percent comes from paper recharge cards.

This shows that the leading telecommunication company, MTN, has more customers recharging their phones via digital channels compared to paper recharge cards.

According to Hammed, the paper recharge card attracts more cost for the company compared to the digital form of recharging. These costs include printing, distribution, among others. This is one of the reasons digital channels are more profitable for the company compared to paper recharge cards.

Olusola Teniola, Vice President of the Association of Telecommunications Companies of Nigeria (ATCON) said the country has quite a number of subscribers making use of alternative channels to recharge because of convenience.

According to Teniola, “The adoption of the digital form of recharging can be seen more in major cities in the country, such as Abuja, Lagos, Port-Harcourt, Kano because these states have the highest population in Nigeria.”

Using Lagos for example, the UN-Habitat and international development agencies estimate the Lagos state population to be over 24 million population as of 2018. This population covers the population of five other states in the country. Kano which is the second-highest has over 16 million and Oyo state which has over 15 million. While in the remaining 32 states, there is a larger percentage making use of paper recharge vouchers.

Kanayo, who was sitting underneath a Recharge card seller’s umbrella, told BusinessDay that he prefers to recharge online than buy the recharge card (on paper) due to the convenience that comes with it.

“I prefer to buy on my phone through my bank because at that moment I won’t feel that I’m spending my money to buy airtime and some other times I don’t have cash, so it’s easy to just buy directly from the bank,” he said.