Stakeholders in the fintech and payment sector have said the future of payment and commerce is set to be shaped by advancements in innovation and technology.
The Future of Payments and Commerce Conference 2023, organised by Loveworld Institute of Innovation and Technology-LIIT, themed: leveraging the power of contactless payment for financial inclusion featured experts who delved into fintech, payments, e-commerce, blockchain, and SMEs and their connectivity with contactless payment.
Kari Tukur, vice president of products, Mastercard Sub-Saharan Africa during her keynote speech emphasised on how digital wallet is scaling financial inclusion and empowering contactless payment.
According to her, digital wallet plays a crucial role in determining financial inclusion, for instance in the aspect of remittance across different countries. For businesses, the digital wallet is paramount to accessing the needs of the customers and also in their business development across transactions.
A recent report by ACI Worldwide ranks Nigeria in the league table of the world’s most developed real-time payments markets. The country ranked sixth behind South Korea, Brazil, Thailand, China and India.
“Nigeria is one of the countries for which real-time payments provide the biggest economic growth opportunities. Its transactions in 2021 resulted in an estimated cost savings of $296 million for businesses and consumers.
“This helped to unlock $3.2 billion of additional economic output, representing 0.67 percent of the country’s GDP,” it said.
Consumers in Nigeria are rapidly adopting cutting-edge technology and next-generation payment solutions. They anticipate a smooth and integrated digital experience, regardless of whether payments are conducted online or in physical stores. Whether it involves real-time transactions through account-to-account transfers, the utilisation of digital wallets empowered by open banking, mobile payment options, or even cryptocurrency, the process should seamlessly connect consumers and merchants.
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Tukur noted that Nigeria experienced a surge in digital transactions, e-commerce activities, and bill payments during the pandemic. Conversely, in other global markets, the emphasis was on the increase in contactless payment methods.
“The biggest driver for contactless adoption is the distribution of near-field communication (NFC) enabled devices in the hands of the merchants. With the tap-on-phone technology, a merchant can easily download a single app on the mobile phone that can easily be converted to a PoS machine,” she said.
Digital payment powering SMEs and E-commerce
Bunmi Kole-Dawodu, Lagos state manager- SMEDAN during his presentation highlighted a key challenge facing SMEs from a regulatory perspective. He pointed out that among the 45 million SMEs, only 15 percent are operating as tech-enabled businesses or have integrated technology into their operations, while a significant 70 percent are yet to embrace technological advancements.
He said “When considering the future of contactless payment, substantial efforts are required to seamlessly integrate this technology into businesses. A crucial aspect of this endeavor is to enhance awareness, which would result in more Nigerians being informed about these innovative solutions.”
As innovation is shaping payment, Akeem Lawal, MD, payment processing and switching (Interswitch Purepay) stressed that the evolution of payment methods is being influenced by several innovations.
According to him, these advancements revolve around Open Banking, Blockchain’s role in enabling decentralisation, cross-border payments, and industry integration. Additionally, he highlighted the significance of Tokenisation, Big Data, Artificial Intelligence, and the Internet of Things in shaping the future of the payment landscape.
Lawal when speaking on the future of innovation and payment further said that these innovations will be leveraged to promote contactless payment both within Nigeria and on an international scale.
Read also: French ambassador seeks to bridge Nigerian MSMEs funding gap
Securing digital payment and risks involved
According to Chima Uzomba, the founder and CEO of Boch Systems, the finance sector ranks as the second most affected industry in terms of cyber-attacks and security threats.
As projected by Cybersecurity Ventures, an authoritative cybercrime research platform, the estimated global costs of cybercrime in 2023 are anticipated to soar to $8 trillion annually, $667 billion monthly, and $154 billion weekly.
During his presentation, he said that the human element of cybersecurity represents the most vulnerable point when formulating cybersecurity strategies, as malicious actors often employ phishing attacks or social engineering tactics to breach systems.
“When financial institutions enlist services from third-party providers, inherent risks accompany such collaborations. Thus, these institutions must conduct comprehensive risk assessments for their affiliated vendors. This scrutiny is particularly crucial due to the heavy reliance on technology within the financial sector, which is one of the most heavily regulated industries worldwide,” he said.
In an effort to shield financial institutions from potential risks, the Central Bank of Nigeria has introduced a cybersecurity framework applicable to various financial entities, including mortgage banks and other financial institutions.
Uzomba further noted that a robust cybersecurity framework is imperative for safeguarding payment systems against the threat of cyberattacks. Another critical aspect involves managing access privileges within organisations. Understanding who has access to sensitive information and monitoring the actions they can perform with that access is vital in mitigating potential risks.
“Others include the integration of AI-driven security measures, the mitigation of human errors and compromises, and the implementation of comprehensive security awareness training programmes are additional essential components of a holistic cybersecurity approach,” Uzomba said.
During the event, several keynote speakers addressed various topics pertaining to the future of payment. Notable speakers include Femi Bakare, the Managing Director and CEO of Parallex Bank. Bolaji Akinboro, the co-founder of Toronet Layer. Femi Otenigbagbe, the MD of Refuge Mortgage Bank. Sanmi Akinmusire, the co-founder of Imali Pay. Peter Oluka, the founder of Techeconomy.ng and David Adeleke, the co-founder/CEO of Zeeh Africa.
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