Last month, yet another payment company began operations in Nigeria, it is called Amplify and it is the first Nigerian payment company to focus on recurrent payments. In this interview with Innovation Village, Segun Adeyemi, co-founder of the MEST-incubated company attempted to explain why 2016 is fast becoming the year of payment companies in Nigeria.
Why is 2016 fast becoming a payment year in Nigeria’s tech ecosystem?
There are a number of factors that have come together to make 2016 a great year for payments. As at December 2015, the value of electronic transactions rose to N48.93 trillion up from N43.85 trillion in 2014, which represents an increase of 11.6 percent. Transaction volume also rose by 43.4 per cent to 162.59 million from 113.42 million in 2014. The Central Bank of Nigeria has also been paying impressive attention to electronic payments and actively promoting policies to stimulate a cashless economy by 2020 because of it obvious benefits.
The recent introduction of Bank Verification Number (BVN) is one example that has brought about an increased level of security and harmony to online transactions and financial data that enables payment players to innovate with reduced worry about fraud. It is in driving this cashless economy in Nigeria that we have been able to carve a niche in the market to automate recurring type payments and champion the subscription economy.
There are several payment solutions already available in Nigeria even though the banks are also releasing new payment products. What does this suggest or imply about the payment landscape in Nigeria?
The introduction of different payment solutions in Nigeria demonstrates the attractiveness of the landscape and the increasing consumer demand for simple, secure and affordable payment options. As the market continues to mature, different stakeholders are making strategic moves and positioning themselves to gain and/or maintain market share and significance. As more transactions move from cash to digital in Nigeria, the value and volume of such transactions will continue to grow significantly in the coming years.
The consumers and businesses are – and will continue to be the biggest benefactors of this trend as it ensures that they have access to innovative and affordable payment solutions that foster smooth and successful transactions.
What is your view on the future of payment in Nigeria?
The future of payments will see Nigerians moving more towards convenience and value. Truly innovative payment solutions will continue to gain prominence in the market. A growing majority of the population will shift from cash based to electronic payments. In a few years, payment in itself will become ubiquitous and a layer on top of which other innovative solutions will be built. This is also in line with the Federal Government’s quest to evolve a change from the traditional payment system into a new electronic payment system by 2020. However, for this to happen and for the vision to be realised, there is a need for increased investment in basic infrastructures needed to facilitate such systemic transition. Also, there need to exist solid political will, trust, security, consumer education, improved legal framework, improved literacy rate, improved power supply and other socio-cultural factors that creates the enabling environment that supports a cashless economy.
How can Nigeria maximally benefit from the attractiveness of its payment industry?
Nigeria can use the attractiveness of this industry to drive financial inclusion. Also, a truly efficient payment system enables trade within a country. Another way to harness the attractiveness of the industry is to basically create an enabling environment for business and commerce to thrive.
