Driving mobile payment adoption in Nigeria

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GO DIGITALBI-MONTHLY REVIEW OF THE DIGITAL/TECHNOLOGY WORLD

Driving mobile payment adoption in NigeriaFola AkinmolayanTech Evangelist Neo-2 Limited@folababa

Insight

4Shopping experience with mobile paymentSmart phone adoption is a major catalyst for mobile payment usage. In Nigeria, 39 percent of all mobile payment users with smartphones have made a point-of-sale payment, according to MasterCard. This demonstrates increased demand for simple secure ways to make device based payments. Globally, the following are the ways, PayPal survey respondents felt technology could improve payments:

Simpler & Faster

70%

Avoid queue at shopping malls

65%

Wasting time(Poor internet or Technical Issue)

56%

5What bank customers wantAs they become more tech-savvy, Nigerias retail bank customers will demand speed in processing transactions and convenience when performing routine activities. They will demand flexible products customized to their needs, access real-time summaries of their transactions and expect more personalized financial advisory services as value added. All these will have to be provided at the best possible cost and with utmost customer care.

ConvenientValueSpeedFlexible

6Channel usage trends in Nigeria

Branch

ATM

POS

Internet Banking

Bank branches and ATMs are the most popular channels amongst bank customers. Majority of everyday transactions are still cash based; cash availability at the ATM remains the most important service measure for retail customers. Cash remains king but acceptance level for e-commerce and digitized products is rising. Internet Banking has witnessed fast adoption rate from 7% in 2012 to 18% in 2014 while mobile payments adoption increased faster from 2% in 2012 to 8% in 2014.96%91%18%27%

7Advantages of using mobile payment

SpeedSaving TimeEase of use

66%60%41%

Consumers are ready for mobile paymentsThe challenge is attracting them to use mobile payments frequently

9Attracting Nigerians to adopt mobile paymentDayo Works in a hair dressing salon. GraduateAffordableFlexibilityConvenience in making transactionsEasy to useDayos prioritiesSomething about Dayo that you must considerMeet DayoDayo, 23, just finished school. She remains positive about her future as a musician and spends the evening attending music classes. Dayo belongs to the age group 15-49 which represents 46.05% of Nigerias population (2014 data, AfDb). Trends in consumer behaviour of this group shows a high preference for value packaged products, easy to use high quality goods with numerous access channels. Dayo is conscious of her environment and well informed. Majority of her transactions is cash based but she would not mind using mobile payments if she earns N50 for every 5 transactions. Mobile payment solutions that would work for Dayo are flexible products with visible cash dispensing channels cheaper than the ATM and payment methods that do not require compulsory internet connection like the USSD dialing service.

98%

80%

85%

70%

10Telcos are the new banks

Rewards as an incentive to using mobile paymentTo attract frequent use of mobile payments, telcos need to give rewards in form of money back guarantee, seasonal discounts, spend more earn more plans. For instance a customer earns N50 or 50mb for every 10times he/she uses the channel.Pushing through digitizing productsConsumers are seen to increase adoption of mobile payments as more products get digitized and become available on e-commerce stores. Telcos can provide easy payment options such as buying items online with airtime credit. This is why telcos should push against music and movie piracy.Cash Withdrawal KiosksTelcos need to partner with mobile money agents and possibly retail agents to serve as cash withdrawal kiosks where petty cash as low as N100 can be withdrawn with lower transaction charge.AdvertismentAlthough consumers are ready, past advertising efforts may not be reaching the right targets. Marketing and advertising campaigns must be focused on the middle class, the informed age group willing to try new things and concentrated in urban areas.

14 Henry Ojogho Crescent, Of Freedom Way, Lekki Phase 1, Lagos, Nigeria.insights@neo-2.com+234 814 329 3370A Neo-2 Analytics InitiativeGoDigital