Friday, April 18, 2014

Finance experts urge mobile money providers to re-strategise

Published:

Central Bank of Nigeria

The CBN is making efforts to make mobile money payments popular.

 

Finance experts have called for more commitments from mobile money operators and their regulator, if more investments, needed to drive the industry, would be achieved.

The Executive and Head, Payment and Mobility practice, Accenture Nigeria, Henrietta Bankole-Olusina said the mobile payment/mobile money sub-sector would have to put itself together strategically, in order to win investments over.

“Investment in mobile payment infrastructure would come when business people see a business opportunity in that industry. Capital would go to where there is an opportunity.

“Providers have to get themselves together, focus in very clear customer value proposition. Customer experience is key. The onus is on service providers to deliver,” she said.

Mrs. Bankole-Olusina said this at a mobile money event held in Lagos on Thursday. The event, with its theme: Mobile Technology and the future of cashless initiative in Nigeria, was channeled at highlighting the challenges and seeking possible solutions to the rather slow adoption of mobile payment.

She lamented the present approach of the operators, saying they are yet to do enough to convince people to get onboard the platform.

“I personally have not seen the real need to get on that platform. The providers have not shown me that I need mobile payment to survive. I hardly go to the bank. I pay my bills and do all transactions online.

I would need them to show me why I should change that way of life and turn on to mobile payment. We need the right business models and the right business products” she said.

According to her, investment would come when the business models are strategically planned, and customer value proposition is given
priority.

About 20 mobile payment providers have been licensed by the Central Bank.

“We are at the stage where people have invested, but they need returns before they can invest further in technology in mobile payment. We can’t keep throwing money at a problem, without creating strategic solutions to go with it.

The Deputy Governor, Operations, Central Bank of Nigeria, Tunde Lemo, said poverty alleviation has been a top agenda for the regulatory body with focus on the promotion of Microfinance and Financial inclusion. Mr. Lemo, who was represented by Eme Eleonu, said: “The main objective is the delivery of financial services at affordable cost to the disadvantaged, low income earners and indeed every member of society”.

He said the Central Bank of Nigeria and other stakeholders intend to implement the National Financial Inclusion Strategy to decrease the
number of Nigerians that are excluded from financial services from 46.3 per cent to 20.0 per cent by 2020 as committed to in the Maya
Declaration.

This goal will be pursued through a broad range of coordinated interventions, with high priority through “transformation of the existing uniform Know-Your-Customer (KYC) regulation into a simplified Risk-based Tiered Framework, articulation and implementation of a Regulatory Framework for Agent Banking to enable financial institutions to bring banking services to the currently unbanked, definition and implementation of a National Financial Literacy Framework to increase awareness, Implementation of a comprehensive Consumer Protection Framework to safeguard  the interest of consumers and sustain confidence in the financial sector.”

The regulatory body also wants the continued pursuance of Mobile-Payment System and other Cash-less Policy efforts to lessen the cost and enhance the ease of financial services and transactions and the implementation of Credit Enhancement  Schemes/Programmes to empower micro, small and medium enterprises.

In pursuing the stated targets, Mr.  Eleonu said efforts will be concentrated on the Agent banking – the delivery of banking services outside traditional bank branches; Mobile banking/ mobile payments – the access to financial services through mobile phones; Linkage models which dwell on enhancement of financial and business cooperation between conventional financial institutions, government and microfinance banks/institutions for wholesale funding and on-lending transactions; and client empowerment – Increase of bankability of population through coordinated national financial literacy initiative.

“The overarching goal is to ensure the successful roll-out of the policy nationwide by 2013. By successful, we mean evidence of increased usage of electronic payment channels, and a reduction of cash transactions by both urban and rural stakeholders,” he said.

Participants urged the Central Bank and providers not to lose focus on who the mobile money/mobile payment service is designed for.

They queried the focus and centralisation of these enlightenment and awareness campaigns in the cities instead of the rural areas where the target market, the unbanked, reside.

They urged the concerned parties to go back to the drawing board and re-strategise to have the service delivered to the defined target.

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