The arrival of the internet has ushered in unfathomable wealth of value creation, the most important being the ability to successfully transmit real-time information. In Africa, The successful adoption of mobile technology means we skipped the desktop era and went mobile first. According to NCC, there’s an estimate of 97 million mobile internet users across the four major network operators in Nigeria. This confirms that a vast majority of Nigerians access the internet through mobile devices making us a predominantly mobile driven economy. As with every product, there is a need to monetize for value. Mobile payment hit the ground running on arrival as its adoption kicked off with the intention to displace traditional payment options.
When Apple Pay went live in 2014, over 1 million shoppers registered in the first 72 hours alone. Smart local content developers and curators saw a money making tool and latched onto it. The reason behind this isn’t far fetched. The volume of available mobile users made it an easy sell to concerned parties. Research showed that nearly 30% of shoppers will choose to pay with their phones than their wallets. Mobile payments has been adopted globally and is becoming mainstream.The mobile payment revolution in Nigeria is only just beginning. Local companies like Interswitch, Cash Envoy, Vogue Pay, Simple Pay etc. who have been in the game offer merchants a viable means to monetize online in the mold of foreign giants such as PayPal, Braintree (now a part of PayPal), & Stripe. But the pace at which Nigerians have adopted the internet has not been in tandem with our willingness to pay for things online. The market here is still at the “Early Majority” phase where besides the tech enthusiasts and adventurous ones, everyone else hits the “Pay on Delivery” button. I recently stumbled on an article by Interswitch’s Ope Adeoye with startling numbers on our online payments ecosystem. Of the 30 Million cardholders in Nigeria, only 200 Thousand people cardholders use it online. Now, that’s a huge gap.
It’s very clear from these numbers that the vast majority of the 97 million of Nigerians who interact online only do so to access social media, messaging & other free to access content platforms that have found other indirect means to monetize – Ads, Sponsored Content etc.
Issues surrounding the low financial inclusion level in Nigeria has been a cause for worry. That just 30 Million Nigerians are cardholders is an indication of this. There are millions of Nigerians who are under-banked and are without Bank accounts & ATM cards. Some are online yet do not have a means with which to pay online, There is a need to cater for this group. A possible solution to this is Direct Carrier Billing. We recently introduced “tmoni”, a mobile billing platform that enables merchants seamlessly monetize digital content across Africa. It’s frictionless and easy to use as a one-click payment process is all that’s required. This means that barriers like keying in lengthy credit card numbers, do not exist. It also means dramatically improving the probability that a potential lead will turn into a client. Conversion rates for cards generally average 20% while those of mobile operator billing average 50-60%. tmoni expands the reach of content providers to a much larger audience while delivering better conversion rates and higher transaction volumes.
Going by the successes of mobile VAS & digital connections (as seen by the high growth /adoption of internet technologies), the premise of Direct Carrier Billing puts it in position to offer a viable alternative to cards in the future. Operator billing serves a viable option to the over 67 million Nigerians online who are financially excluded and without any viable means to pay online.
Smart businesses understand the need to integrate mobile payment options into their business as it makes it easier for customers especially the underbanked to pay for products and services purchased. Turning a blind eye to this payment method strengthens your competition profit as they plug into using solutions that enables them access funds from people with low financial inclusion