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Operators identify drawbacks for Fintech, ePayment business adoption



For the electronic payment business, the hydra-headed challenges of persistent network failures, culture norms, insecurity, among others have been identified as limitations confronting its expansion in Nigeria.

Operators, who spoke with The Guardian, said these challenges, among others, must be tackled adequately if the country must deepen financial inclusion.

According to the Managing Director/CEO of Xpress Payment Solutions Limited, a financial technology company, Oluwadare Owolabi, Fintech operators face poor Internet connectivity, stressing that this was affecting the quality of services being rendered.


Owolabi said several parts of the country are still very much without Internet facilities. He stressed that even areas that have the facility, the services wobble when it matters most.

“Although, the porosity of Internet networks in Nigeria is hampering the quality of services being provided, some of our products are also to be downloaded. However, when the services are bad, customers grew and revenues are lost. This is not peculiar to us, it cuts across the industry. Beyond this, we are dealing with cultural conviction in different locales as customers will be naturally more trusting of people who are known to them than those who are not.”

Furthermore, he stressed the need for education and sensitisations, saying the lack of these are also issues hindering efficient payment systems in the country.

Owolabi, who said that the firm, in the last three years, acquired over 11,426 clients nationwide with more than N411.4 billion in the value of collection and funds disbursed and N1.3 trillion in the value of transaction via its switch and payment gateway, called on government and other relevant agencies to give more freedom to local agents by empowering them with more products and services to enable more patronage. He said the CBN and other stakeholders would be discussing some of the challenges when the firm organises its conference in September.

From his perspective, an official of MonoPay, Ejike Abisu, aligned with Owolabi on the challenges confronting the business but pointed out that inadequate agent network is also another limitation.

While appreciating the CBN on the Agent Network drive thus far, Abisu urged the apex bank to expand the net for more players to come in.


He stressed that the issue of insecurity, especially in some parts of the country would also serve as a hindrance to deepen financial inclusion, ‘‘no operator wants to deploy service in volatile areas, coupled with the fact that one is not sure of the return on investment.’’

Meanwhile, the sub-Saharan Africa (SSA), region, according to Mckinsey & Company, presents a number of opportunities for the bank and nonbank financial service providers, mobile operators, and others seeking new markets.

According to it, an important first step in considering these markets is understanding the common financial flows in a typical household in SSA—flows that differ significantly from those seen in more developed markets.

‘‘Here, fund sources tend to be as diverse as wages, crop income, remittance payments from family members, government payments, and even public donations. Typical expenses include food, utilities, school fees, health needs, basic retail purchases, and purchases associated with various life-stage ceremonies, such as weddings, funerals, and holidays,’’ it stated.

Mckinsey said understanding where these flows are concentrated will aid the development of more effective market-entry strategies. For instance, it disclosed that a bank’s relationships with employers, government agencies, and agricultural entities might best position it to digitize private and government wages or farm payments. And mobile operators with far-reaching airtime networks might do best in the P2P-payment arena.

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