fbpx
Edit Content

Nigeria Claims Its Space In Digital Payment Arena

Digital Payment

Digital payment is no longer news. Is convenience the new king? Consumers are now willing to pay a bit of a premium for convenience. They are yearning to move away from traditional methods of completing transactions to faster, and most importantly, convenient methods. Businesses have tried to meet this need by offering different products and solutions.

The banks are moving away from traditional ways of doing transactions to keep customers happy. So many apps are springing forth, to create alternative methods of banking; likewise in the e-commerce sector – the sector fueling virtual transactions. The space is continuously evolving.

It is impossible to have a conversation about convenience in transactions without talking digital payment. Financial technology – facilitator of digital payment – has made many strides over the years. And investors always looking to be earlier adopters and seeking to get value for their money are moving in. The venture capitalists are leveraging on this sub-sector as over $13.8 billion was invested in this space in 2015, more than double the funding it attracted in 2014. The beauty about financial technology is its diversity. Almost every major process within banking and insurance is being targeted by fintech companies globally, although its presence in the insurance space is yet to catch fire in our local market.

Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

Financial technology structure is cut across board, from the banks needing it for their social app-integrated message broker solutions for financial transactions to the e-travel agent and the e-ticketing companies changing the ticketing user experience. The provision of telecoms value-added services to the telcos (MTN, Etisalat and Airtel) ranks highly on the list of entities serviced by fintech, so also do the banks. Even NIBSS that provides the infrastructure for automated processing, settlement of payments and fund transfer instructions isn’t left out.

Something interesting happened in the local space few years ago which is a testament to the roaring growth this market is experiencing. Interswitch, Nigeria’s digital payments and payment card giant, acquired Vanso, a financial technology provider, for about N15 billion. Interswitch has mentioned that it has plans to have a dual listing, i.e., on both the Nigeria Stock Exchange and London Stock Exchange. Interswitch would be the first Nigerian technology business to list in the U.K. This giant acquisition move might be a catalyst to that happening. Vanso’s acquisition is definitely a strategic one as it gives its acquirer an edge, riding on the back of the cashless policy driven by the Central Bank of Nigeria.

Digital payment and consumption has come a long way in Nigeria and the market is embracing this soon-to-be-mature market. The increasing use of e-commerce worldwide makes the payments-processing industry a structural growth market. As the IT space on the continent is witnessing a surge with Kenya leading the pack, a reform in its ecosystem is imminent. That being said, there is a need to strengthen links to create an efficient system that leverages on the increased smartphone penetration and the evolvement of businesses to drive payment solutions using financial technology.

In a declining economy and a more cumbersome fintech regulatory environment compared to its counterparts in Africa, Paga, a key player in the financial technology ecosystem, reported a strong growth in March 2016 – transaction value and volume were up by 24% and 8% respectively. This is a testament to the fact that digital and financial technology is on the ascent and Nigeria has claimed its spot in this space.

When it comes to digital finance in Africa, M-PESA of Kenya trumps the card. It is a product run by telco Safaricom. The mobile money platform is now used by 13 million customers (even by customers as far away as Romania) with a transaction value of $12 billion. Nigeria is yet to beat that thanks to a more cumbersome regulatory environment, although we have a greater revenue opportunity for electronic payments.

Entrepreneurship is a lonely journey, let us help you get through it with our services.

Share:

Facebook
Twitter
LinkedIn

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Join Entrepreneurs Family

No spam, only business insights and tips. 

Entrepreneurs Sign Up

Business Registration

Most Popular

Join Entrepreneurs Family

No spam, only business insights and tips. 

Entrepreneurs Sign Up

Related Posts

How to save on taxes in the USA

How to Save on Taxes For New Businesses in the USA

Starting a business is an exciting journey filled with challenges and opportunities. One of the smartest moves you can make as an entrepreneur is understanding how to save on taxes. What does it mean to save on taxes? Saving on taxes is not just about cutting costs—it’s about making strategic

Scroll to Top

Join Entrepreneurs Family!

Get access to FREE business insights and funding opportunities daily.

Entrepreneurs Sign Up