Over the last decade Africa has gained a reputation for global leadership in mobile money, with Kenya at the forefront, but up to now financial services via mobile phones have not taken deep root in the continent’s most populace country — Nigeria. That may change as telecommunications companies such as Airtel and MTN jump into the mobile money market, after recently receiving licenses to do so.
Mobile money is not entirely new to Nigeria. Nigeria’s mobile money landscape, however, has been dominated by banks and other financial services companies. It was only late last year that Nigeria’s Central Bank (CBN), gave the green light for telcos to acquire mobile money licenses.
Telcos eye mobile money success in East Africa
Telecom operators would like to replicate the successes they have seen in East Africa for products such as M-Pesa, launched by Vodafone and Safaricom, the biggest operator in Kenya.
Aside from the late-in-the-game approval of mobile money licenses for telecom operators, Nigeria has had generally favourable legislation regarding new financial services. Nigeria’s API-based open banking initiatives, for example, have enabled fintech start-ups to introduce their own mobile-based financial services, working in conjunction with the banking industry.
This resulting explosion in payment services has seen the birth of start-up unicorns in the country, including Paystack and Flutterwave — which have more than US$1 billion in valuation — and Kudabank, valued at $500 million.
Yet there is still a need to extend financial tools to those in underserved regions, and many industry insiders believe the best bet yet is mobile money services.