By Chinwendu Obienyi
Economy experts have interpreted the recent spike in volume of mobile transactions, as an indication of Nigeria’s preparedness for cashless-economy.
According to the Group Managing Director/Co-Founder of Routelink Group, Femi Adeoti, the Nigerian populace appears quite ready to adopt financial solutions, although the appropriate term and realistic expectation at this time should be “cash lite”.
This is coming after the Nigeria Inter-Banking Settlement Systems (NIBSS) in January 2023, noted a 125 per cent increase in the volume of mobile transactions in the country compared to the same period last year.
Adeoti, who was the immediate past Managing Director and CEO, African Operations, Inlaks, said that there are immense opportunities for investment as Nigeria’s current banking and digital payment infrastructure is inadequate to cater to the expected growth in the volume of digital/electronic-based transactions.
“While we are right to celebrate an increase as significant as 125 per cent, the failures recorded show that we could have achieved more. So, the major implications are that we are ready to adopt cashless initiatives, but all the needed infrastructure must be in place. It is also important that all the necessary stakeholders are well-represented, informed, and involved in all the processes leading to any new policy on the cashless drive,” he said.
He explained that the cashless policy by the Central Bank of Nigeria (CBN) has numerous benefits as it will provide faster economic growth.
He, however, harped on the need for the policies to be right, and the implementations properly executed.
His words, “To achieve a smooth transition into a cashless payment system, all stakeholders must be involved – there must be representations from different stake-holding concerns – banks, digital payment companies, telecommunication companies, government sectors/parastatals, manufacturing sector, retail business sector, representatives from rural areas.
There has to be an assessment of the needs of each of the pressure groups – for example, the needs in the rural areas will be different from the urban, and the needs in the eastern part of the country might be different from that of the North. The needs for infrastructure on the bank side might be different from that of the digital payment companies etc.
“There is need for collaboration and partnerships – The policies must be jointly reviewed and drafted by the critical stakeholders bearing in mind the needs and resource requirements of various interest groups. The plan should involve a process of ensuring proper education and awareness of the policies across different regions in the country depending on the identified needs. There is also the need to conduct a review of existing infrastructure to ensure adequacy before the policies take effect”.
Adeoti added that it is also important that the stakeholders have enough time to ensure that adequate resources are provided in terms of infrastructure and human support. Then there should be a continuous process of reviewing the impact of the policies and improvements where necessary.
Applauding the Telco-led mobile money approach which has kicked off in Nigeria, Adeoti said that this would have a huge impact on the mobile money aspect as well as digital payment services as a whole. Recently the CBN licensed some Telcos under a license category called Payment Service Banks (PSB). These licensed PSBs are to set up similar structures as that of MPESA in Kenya.
Routelink has three subsidiaries – Routelink Telecom, Routepay and Routelink Enterprise. The three companies play at major intersections between payment, telecoms, and enterprise IT. The tech firm has a payment license from the Central Bank of Nigeria (CBN). In addition, it has four different licenses from the Nigerian Communications Commission (NCC) among which is the Mobile Virtual Network Operators’ License (MVNO).
MVNO is a new mobile license in the country, and Routelink Group is one of the companies that have the license based on the perception of what it is set to do in the market.
On licensing, the Routelink boss said, “We are excited about the opportunities that abound in the Nigerian marketplace, and we are determined to make a major difference on quality of service and innovation.
There were some gaps we identified in these areas, and we were sure we could make a major difference as regards key areas of innovation and customer service. We have enjoyed some tremendous goodwill since we started”.