Loy Okezie
With the success of M-PESA in Kenya, Tanzania, South Africa, mobile payments have become an alternative to retail banking and other banking transactions in Africa.
Infact, M-PESA attracted 9.4 million Kenyan users in just under three years and has recently partnered with Kenya’s Equity Bank to offer subscribers a savings account, called M-Kesho.
Interestingly, Nigeria’s mobile payment space is heating up with several licences granted to operators by the Central Bank of Nigeria (CBN).
Here are 7 mobile payment solutions for Nigeria to watch in 2011.
MyPesa
MyPesa is a mobile payment product of Kuiper Systems Ltd that enables businesses accept payments from users with their mobile phones.
Paga
Pagatech’s mobile payment service, Paga has been in pilot testing mode since late September 2010 and has allowed participants to use their cash to pay bills, purchase recharge cards, transfer money, etc via their mobile phones.
With only about 70 participants in the Pilot of Paga since September, there has been over N2.2 million in transaction volumes.
At launch this January, Paga aims to have at least 5,000 qualified merchants.
M-Teller
M-Teller is eTranzact’s solution to mobile money in Nigeria. M-Teller is built to be network independent and bank independent, which means that you don’t have to be subscribed to a specific mobile network or have an account at a specific bank to use the service.
With eTranzact’s M-Teller, agents can open new accounts for customers, using the mobile application on their phones. Upon registration, an eTranzact Genesis Card will be issued to all customers.
eTranzact already claims over 50,000 agents across Nigeria where users can register and transact.
M-NAIRA
M-NAIRA is a solution offered by E-Soft, a web and mobile company based in Abuja. While much hasn’t been heard about this service, what we know is that it is based on an agent model that allows a user open an account for free and make transactions.
VTN
Virtual Terminal Network (VTN) was launched in 2009 as a revolutionary hybrid virtual/mobile payment network designed solely for developing economies that allows merchants and retailers to process transactions safely and securely from the Internet and mobile phones.
At the time, the VTNetwork had about 3000 merchants which has grown over time and currently boasts over 1000 agents.
I received some cash via VTN last year and the transfer fees were moderate.
M-Wallet
M-Wallet is a 2-in-1 mobile payment application by Mobile Media Info Tech (MMIT) that caters to people with functional bank accounts and ATM cards-classified as the Banked and those financially active majority who remain Unbanked.
In October 2010, MMIT became the first company ever to do a cross-border mobile money transfer from the UK to Nigeria and from Sierre Leone to Nigeria.
Monitise
Monitise is a global leader in Mobile Money and was granted a provisional licence by the CBN and its local partners to introduce payments via mobile phones across Nigeria.
Monitise’s technology would allow users to securely make the following mobile payments:
1. Add money to their mobile wallet or make withdrawals at a countrywide network of processing agents
2. Transfer money to other people or organisations via their mobile phones
3. Obtain their balances via SMS text alerts
Monitise’s future mobile money services may include savings, insurance and pensions.
Thoughts
While it is too early to say which of these mobile payment solutions would offer the best services and support, there are indications that the success of any solution would depend on key factors.
Afrinnovator points out that, “part of the reason why Safaricom has a strong following on M-PESA…is the fact that they managed to quickly roll out a strong agent network covering the entire country.”
I think this is the major determinant for success in this space as it increases the entry and market penetration barrier for other players.
If eTranzact’s claim of over 50,000 agents is true, the M-Teller would have won the war by end of 2011.
Other factors could be adequate education of users on the benefits of mobile payments as well as training of mobile payment agents accross the country.
Since the success of any mobile payment service greatly lies on the efficiency of the mobile networks, this too can make or mar the reputation of a mobile money operator.
One of the biggest challenges though is ensuring that agents can provide cash when customers need it. Liquidity problems may arise if agents don’t have enough cash to give customers.
Final Thoughts
My guess is that mobile payments will take off gradually this year, but with low entry penetration as users build confidence and trust in the system.
As more and more people use the system, there’ll be huge transactions done via the system as from 2012.
If you plan using the system, get to know the transaction fees of different mobile payment solutions and choose the one that suits your needs.
Have you used any of the mobile payment solutions? Share your experiences…
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I have been in search of a detailed article that would distil the Information about Mobile Money, so that I can peer into the future and see how the current culture of sharing can Impact us.
Thanks for the brief insight. I am sure if informations like this are made available in press releases, it should be passed to key players in the Blogosphere who would gladly share it.
Thanks for the insight Loy.
[...] Okezie summarised 7 Nigerian mobile payment solutions to watch in 2011, he also took a look at three ideas at the Social Innovation Camp that might get [...]
Today I spent the most picturesque and undefeated tract, thanks admin
Thanks for the tip on the 7 mobile payment solutions to watch out for. Also heard from the grape vine that there is another, by Eartholeum Networks that is set to take the market by storm. Cant wait for their arrival!
Your list conspicuoisly missed one fantastic online payment solution by http://www.naijamart.com. I was recently introduced to NaijamartPay by a dfriend – https://pay.naijamart.com/.
The service was extremely fantastic and cost almost nothing.
Athe merchant api is completely free. Surely this one ranks highest among the rest.
I believe we are in a transformative Stage in d banking industry.all and more systems such as recharge my account(based on sms strictly) will spring up and customer would choose d package that suites them the most.what is d criteria for been certified by cbn.
it would be a highly competitive market.
Louis, Nice analysis however it would be good to note that the CBN has already given approval in principle to some organisations to roll out mobile money services, as at December 2011, most of the companies you listed are not on that list, the ones missing would be
Parkway – ReadyCash
PayCom
mKudi
Eartholeum
UMo
FETS
I have used the ff and these are my experiences
UMo; seems to be on track, their application is readily availble for pilot purposes from http://www.u-mo.net/
Parkway-ReadyCash; have a great application, with an awesome user experience works for java enabled phones and has excellent support for BlackBerry its available on http://bit.ly/ready-cash
eTranzact-mTeller; with so much media, i am yet to find where to download the application or how it works, most of the information is for would be agents http://mobileteller.etranzact.com/mteller
mKudi; application is available on http://www.mkudi.com however i couldnt get any transaction done
Paga; registered online at http://www.pagatech.com was able to log into the online version and did some trancations, however i couldnt find any information on the mobile version
Eartholeum- QikQik ; no information on how to download or use on their website
As always Loy, great work
I’ve used Paga – very easy to use the online version and the SMS commands. The interface for the online version is clean & uncluttered, and the words are easy to understand. However, I was led to believe that there was a mobile app, but I couldn’t find this on the website ….
I wonder why eTranzact is yet to come up with something encouraging. I have been waiting for them to launch just like UBA U-Mo. eTranzact, come on. You have been on the scene for quite a while. This business is highly competitive. I mean you have no mobile app on your site, little info for intending agents and you response time when inquiries are made is too long.
If one emails UBA Umo, he gets fast response specific to your complaint or inquiry in a satisfactory short time but what you get from eTransact is a machine response acknowledging your mail. This is money issue. It makes one wonder if this is how they intend handling their mobile money transfer complaints from agent/customers, because that would bad for business. The agents waiting for you to roll out your drums might join the other operators because of etranzact long silence and at the end of the day, what they get would be the leftovers. eTranzact, keep in touch with your agents – very important for business.
With over 10milion transaction process, user friendly java/jar application for Phones(VTN Mobile Pro) and easy to use online platform, VTN is on the move to become the best mobile money operator in Nigeria.
You can register here (copy and paste pls) : http://www.virtualterminalnetwork.com/Invite.asp?...
Please i am working in securing a mobile money licence from the Central Bank of Nigeria. I have been to the website and got no vital information on this.
Can i get a help here? what are the requirements, i have a russian company that has been a leader in Mobile money in Russian working in partnership with my company for mobile money operation. We are trying to roll out a more secure, more convenient , a futuristic mobile money services to Nigerians and Africa in general. Please can somebody help me with the necessary details on this, while i plan my way to Nigeria.