Mobile Payment: Overcoming Connectivity Hitches


Mobile payment is where the world is heading and Nigeria cannot afford to be left behind. Banks, telecoms and start-up technology firms are all strategic partners in the payment ecosystem. New technology firms and other operators are navigating the connectivity challenges to give customers the seamless services they need, writes COLLINS NWEZE.

As 30-year-old lawyer Stephens Michael waited outside the courtroom for his colleagues, his smartphone beeped with a familiar SMS message alert. It was another reminder for him to pay his electricity supply bills.

In three minutes, he opened his mobile money platform and the payment was made. A few years ago, he could only have imagined how he would be able to make such payment with such ease without going to the bank.

Step aside cash, cheque and credit cards; a consumer can use his mobile phone to pay for a wide range of goods and services. Mobile money has come to represent the new face of banking– but not without some hitches.

Expectedly, mobile money is yet to be fully embraced by the banking populace because of poor connectivity provided by telecom operators (Telcos).

The era of brick and wall banking is fast fading away. It is now being replaced by mobile banking. In a world where companies think first of cost, and then profit, the need to get things done fast, and cheaply cannot be overemphasised.

But the biggest challenge facing both the internet and mobile banking, has been connectivity hitches. Stakeholders, especially banks and start-up technology firms, are abandoning telecommunication networks to create alternative channels needed to support mobile money services.

In many cases, poor connectivity provided by telcos hinder seamless completion of transactions. Some customers explained that the fear of getting transactions completed at record time without hitches has prevented them from doing banking the mobile way.

For instance, Adanna Obi, a Lagos sales girl, lamented her experience in using mobile money platforms. “I tried to send money to my brother in Aba, using mobile platform, but the transaction was stalled because of poor network. I went to my bank’s banking hall to make the deposit.Until banks solve connectivity challenges and build confidence in the network, I will not try it again,” she said.

Cases like this have prompted banks to rethink their mobile money strategies. Hence, to achieve a seamless mobile money services, a consortium of six banks and Unified Payments has inaugurated PayAttitude, an electronic payment scheme that allows transactions in both online and offline platforms.

There are also technology payment firms, such as Paga, which is fast making mobile payment ad pleasure and necessity. Paga Co-founder Jay Alabraba said infrastructure challenge is a subject of concern to businesses. “Recently, we were at an event hosted by one of the large international organisations and infrastructure was the subject and how it affects small and large size businesses, from the stand point of power, cost of connecting telecoms and the reliability of such connection.

“We built Paga to work in inadequate infrastructure environment; this is not importing software and assumes it is going to work. We have taken into account the fluctuations we will have in power, or telecommunication networks, or other types of infrastructure challenges. The technology is built to work in emerging markets where technology challenge exists, we use an appropriate technology,” he said.

Chairman, PayAttitude, Victor Etuoku, who announced the participating banks as FirstBank of Nigeria Ltd, Zenith Bank Plc, Access Bank Plc, Diamond Bank, Skye Bank Plc and United Bank for Africa Plc said the lenders are commitment to making the project succeed.

He said the collaboration with Unified Payments on PayAttitude is expected to drive innovation in service delivery, convenient mobile payment system and making Nigeria’s financial system the “safest and fastest growing amongst emerging markets.

“PayAttitude guarantees subscribers the confidence and comfort of successful mobile payment for goods and services at merchant locations at all times, notwithstanding the challenges of telecommunication or unavailability of network in the merchant’s bank or the customer’s bank,” he said.

Managing Director/CEO, PayAttitude, Agada Akpochi, said the challenges of telecommunication, or unavailability of network in the merchant’s bank or the customer’s bank, will no longer delay transactions.

FirstBank, in a statement, affirmed that no doubt Unified Payments and PayAttitude would redefine the domestic payments ecosystem that had been plagued with numerous challenges.

The bank said the lender is working to constantly provide dynamic and relevant solutions that will improve the lifestyle of its customers while ensuring the safety and security of their funds.

It noted that with the developments in the electronic money industry, it became imperative for the payments industry to look inward for a solution that will guarantee successful retail payments of Point of Sale (PoS) terminals without depending where online real-time communication is not required between the acceptance device and the customers’ accounts in the bank.

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Beside being part of the PayAttitude platform, Access Bank Plc went a step further by inaugurating a new multi-banking payment solution, PayWithCapture.

The platform, a mobile payment solution allows customers to make payments by scanning a merchant’s pre-generated code using the camera of their mobile device.

The product, the lender explained, can be linked with different payment cards, giving users options on payment instrument of their choice.

The bank’s Group Managing Director, Herbert Wigwe said: “Forging growth in mobile payment solutions requires inclusiveness. For the potential of mobile payment technologies to truly explode, it is important that we begin to see it as more than a bank initiative but more of a consumer initiative. That is where inclusiveness comes in”.

Alabraba said the mobile payments service firm, has announced the launch of its new business focused service line – Paga for Business.

Suitable for large-to-small businesses, the product is a one-stop-shop solution for any business looking for a smart way to collect payments from its customers in person, online, or remotely, anywhere in the world. The solution, he added, also allows businesses to disburse cash, airtime to any bank account or phone number in real-time.

Alabraba said Paga does not compete with the banks since its funds are saved with the banks. He, however, admitted that there are places where it clearly competes with banks and there are more places where it collaborates with banks to do what it is doing.

“Certain banks have licences to do mobile payments. There are places you can extend what we are doing beyond where people do it today. For example, you don’t find many banks pursuing collections of payment by small or medium businesses the way we do”.

He said people who do business may not necessarily be in the rural areas, adding that because they are not banked, they are not finding the efficient ways to make payments. But somehow, he explained, “there is a gap and that is the place we play as well. Half of our customers are banked, just that they find Paga to be a lot efficient, creating more options for them to access their services.”

Managing Director of Airtel Nigeria, Segun Ogunsanya, has called for a review of the current mobile money model, saying a telco-led model will help expand retail banking, thereby driving financial inclusion in the unbanked segment.

Telecoms companies are not permitted to provide their own mobile money services as the current model approved by the financial regulator, Central Bank of Nigeria (CBN), empowers banks to provide mobile money services while telecoms companies play only a supporting role.

Speaking at the yearly lecture of the Chartered Institute of Bankers in Nigeria (CIBN) in Lagos, Mr. Ogunsanya said for the mobile money market to reach its full potential, it is important that restrictions on telcos activity in mobile money are lifted.

The CBN has also admitted that its mobile money expectations are not met, despite N5 billion annual turnover recorded by operators. CBN Director, Banking Supervision, and Chairman, Nigeria Electronic Fraud Forum (NeFF), ‘Dipo Fatokun defended the bank-led model, saying the CBN does not regulate telcos and will not give them total control of the project. He said the CBN will continue to monitor progress being made in the mobile money space.

He said: “It is not correct that we have not made progress in mobile money. It is right that our expectations on mobile money has not fully been met and probably because we were very ambitious in setting the target”.

He regretted that most of the mobile money transactions are for subscription payment, and remittances, like mobile wallet sending money to account in the bank, or account in the bank sending money to mobile wallet.

Fatokun said apex bank believes that mobile money and agent framework is the frontier of cashless boom.

“Mobile money is the next thing expected to transform CBN’s cash-less policy. The apex bank believes that such initiative will aid both telecommunications and banking industries to further serve Nigerians better,” he said. Nigeria’s telecoms subscriber base, put at 131 million as of September, last year by the Nigerian Communications Commission (NCC), should play a major role in bringing the unbanked into the formal banking system.

With over 50 per cent of Nigeria’s adult population unbanked, mobile banking could be the catalyst that will help quicken the adoption of banking services by this critical segment of the population. Offshore portfolio managers appear to be similarly persuaded and they are already positioning to take advantage of the expected growth in mobile money.


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