The size of the Nigerian market has major potential for the growth of mobile money services in Africa but it faces major challenges before it can be successful. The country’s central bank last month issued 11 mobile banking licences but as the winners start to rollout their services, a report in The Punch highlights the hurdles they must overcome. Establishing a sufficient network of agents to handle payments, as well as cash float problems, security concerns, coverage issues, money laundering and poor quality of customer service are all listed as potential barriers to success.
The newspaper found that the country’s agency network, which is needed as the backbone for mobile money services, was “grossly inadequate with less than 1,000 verifiable agency points in the country”. The newspaper quoted an expert as saying 10,000 agents were needed for a successful network. Another challenge cited was cash float problems for customers as well as agents, particularly in rural areas. Other obstacles included security concerns, poor quality of service, worries about money laundering and inadequate customer service and complaint handling.
Separately, Nigerian mobile operator Globacom has signed an MoU with Afripay, a subsidiary of United Bank of Africa (UBA) and one of the 11 mobile money licensees. The bank will be able to reach users on the mobile operator’s payment platform which is called Glo Text Cash.