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 is a mobile payment product of Kuiper Systems Ltd that enables businesses accept payments from users with their mobile phones.
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 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 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.
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 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 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.
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.
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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