In 2018, the financial technology (fintech) space was one of the trending sectors in Nigeria. And according to Open Banking Nigeria Trustee, Adedeji Olowe, the payment sector would be interesting in 2019 as well.
Olowe in a Twitter trend listed what will likely happen to payment in the year.
— Adédèjì Olówè (@dejiolowe) December 24, 2018
First is that interbank transfer would overtake ATM cash transaction, but this is already the case. Figures from (PDF) the Nigeria Inter-Bank Settlement System (NIBSS) stated that the value of interbank transfer was ₦65.13 trillion compared to ATM transactions at ₦4.76 Trillion as at September 2018.
It’s also predicted that the recently introduced Payment Service Bank will fail, this is in line with our earlier view that the bank might not impact the financial inclusion drive in Nigeria.
The 500,000 payment agents initiative introduced in 2018, the Shared Agent Network Expansion Program is expected to be a success. At the last POS Innovation Summit of 2018 organised by Global Accelerex Limited, it was revealed that the program is already having the expected result.
Also predicted is a massive data breach or fraud hitting the fintech space with a reaction from the Central Bank of Nigeria (CBN) which will not go well for fintech companies. It’s interesting to know that there have been a couple of cases of fraud in the fintech space in the country.
Towards the end of 2018, CBN published an exposure draft of a licensing regime for payment system providers which fintech players have since kicked against. It’s expected that there will be a reconsideration on the capitalisation requirement on the ground that no fintech company has ₦5 billion to play with. While this is going to be a piece of good news for the sector, it’s predicted that the apex bank will clamp down on companies that are not playing by the rules.
On the part of the bank customers, it’s interesting that Olowe predicted a reduction in the interbank transfer charge from its current ₦52.50 (VAT inclusive) to ₦20 (₦21, VAT inclusive). Furthermore, the Open Banking advocate is expecting the CBN to instruct banks to make the transfer of ₦1,000 and below charge-free; more wins for bank customers.
In 2018, some Nigerian banks introduced banking services on instant messaging (IM) platforms. Olowe predicted that someone will come to the term that the WhatsApp banking is not delivering what’s expected and that this will prompt a better one with proper artificial Intelligence capabilities.
Are you currently making use of IM for banking transaction in Nigeria and do you agree that these platforms, especially WhatsApp banking, are not delivering the expected experience?
Last year, Opera acquired a controlling stack in PayCom — a Nigerian mobile money platform. More International players are expected to venture into financial services. This is definitely a call for Nigerian commercial banks to meet up with customers’ expectations.
In December 2018, Access Bank acquired Diamond Bank. And one of the Tweeps that replied to Olowe’s Twitter predicted a major merger/acquisition in the mobile money and agency banking space. While merger/acquisition might not be feasible in the agency banking space, it’s possible among mobile money players and it’s probably going to be Paga acquiring other operators or other operators merging to have a bigger share of the market.
From these predictions, it appears the fintech space would still be an exciting sector this year as with the previous year.
Aside from the above, what other trends are you looking forward to in payment this year?