Electronic Payments is indeed the harbinger of business success in Nigeria.
In recent years, entrepreneurship in Nigeria has certainly picked up. This has especially been stimulated by the chronic unemployment crisis in Nigeria, leaving millions of young Nigerians without good paying jobs.
In the history of the world, there are two main industries which are the largest employers of labour. The first is the Agricultural Sector, followed by Manufacturing. In Nigeria, for many years, these two sectors have been paid much lip service to, with each successive government focusing only on the easy foreign exchange earner – crude oil.
The two industries, Agriculture and Manufacturing, which would have mopped up a huge chunk of Nigeria’s currently unemployed, as well as created a myriad of diverse opportunities for small and medium scale enterprises, are terminally ill. The government of the day has promised to heal these sectors, hoping to take the country to that longed-for prosperity.
A new industry, though still in the infancy or toddler stage, is emerging; or rather, has emerged – the Info-Tech Industry.
The arrival of internet services on the shores of Nigeria about 17 years ago has certainly brought a lot of benefits to Nigeria. Like a window into the world, the internet exposed Nigerians to the ways of the world, to new technologies, to friends and foes, to information and most of all, to abundant possibilities.
As with every industry, there are the big guys and the small ones, and every type of size in between. A few companies have stood out in terms of the proprietary solutions they offer, their revenue, and the public perception they have gained, while a great many are grappling hard to find their footing in the steep slope that is the Nigerian entrepreneurship landscape.
One of my favourite definitions of business or entrepreneurship, as given by one of my facilitators in business school, goes like this: “Every business exists because they have a single (or more) paying customer.” Needless to say, the emphasis here is on ‘paying customer’. Without a paying customer, a business simply dies. The more paying customers the better; the more often they pay, the even better.
As short and as simple as this definition is, many start-ups in the young technology start-up sector completely miss it. What you find is that there are a lot of nice ideas, that have been completely built and deployed, only to find out (painfully, I must add) that there are really no paying customers for the solution that has been built. This is fairly common in the tech space, and it usually happens because start-up costs are really low (a computer with internet access), the technical know-how is readily available and everyone wants to be the next big thing. How they happen to ignore the paying customer is a story for another day.
Payments, especially electronic payments, and the ability of customers to easily make them, can sometimes be the difference between the success and failure of any business, tech, tech-driven or not.
As at the year 2000, Nigerians were just beginning to learn the words ‘internet’ and ‘email’, there were no ATM machines or ATM cards, there were no mobile phones, sim cards, android or iOS apps and the banks didn’t have electronic doors with metal detectors in them. If your customer needed to pay you for your goods and services, they either paid cash or wrote you a cheque, or, in some instances, a bank draft. How inconvenient it all must have been.
The electronic payments we enjoy today, sitting in the comfort of your home and sending millions of Naira hither and thither, just at the tap of a few buttons on your mobile phone, is as a result of the telecoms revolution of 2001 and the 2005/2006 consolidation of the banking sector, which provided the strong foundations for easy payments.
In all of this, one company comes to mind. They solved the payment problem (and are still solving it) in a way that any smart technology company should. Now, people who have wholly adopted electronic payments are able to make payments conveniently, securely and with peace of mind. For many, there’s absolutely no need to go to the bank.
Mitchell Elegbe, CEO and founder of Interswitch, is a Nigerian visionary business leader. In my own words, he is every businessman’s hero. The continued existence of his company guarantees the continued success of millions of Nigerian businesses, by continually facilitating that same lifeblood of business: electronic payments.
Speaking on 30 April 2016 at the recently concluded conference, The Platform, Abuja, Mitchell delivered a paper on the topic ‘The Untapped Potential In Technology’ where he enumerated, amongst other things, the further possibilities of an even more connected world where our everyday household devices, such as washing machines and refrigerators, will wirelessly communicate with each other and with your mobile phone, which then goes ahead to deliver messages to you, such as: “We are low on washing detergent and milk, we should buy some”. As creepy as this sounds, it is safe to say that it will emerge sooner than anyone thinks.
As the father of electronic payments in Nigeria, Interswitch has also gained global recognition, with international venture capitalists like Helios Investment Partners and Adlevo Capital investing substantially in it. The CEO also confirmed on a phone interview with TechCrunch, the possibility of a dual listing of Interswitch on the Lagos and London stock exchanges.
Nigeria’s Interswitch is also prepping to be Africa’s first unicorn, a company worth $1 billion in valuation – a day we proudly await impatiently but in calm confidence, knowing it is only a matter of time. To Interswitch and all the other businesses facilitating electronic payments for Nigerian businesses, we, the Nigerian businesses doff our hats.