Mobile transfers allow people to send money instantaneously via text messages and it is one form of mobile money. Mobile Money is a payment solution that enables users pay for goods and services with their mobile phones. Mobile Money is one of the e- payment solutions available to Nigerians in a cashless Nigeria. It is at the core of the CBN’s cashless or cashlite Nigeria policy. Mobile Money transforms your mobile phone into an electronic wallet (e-wallet). You can store funds in your mobile e-wallet for making electronic payment for goods and services, to transfer funds to family and friends. This reduces your need for cash when shopping and might help you handle cash with the daily limits of the CBN. You can also receive money on your mobile money e-wallet.
Based on the GSMA 2014 economic report , Mobile money is now available in most developing and emerging markets. At the end of 2013, there were 219 mobile money services in 84 countries. While the majority of services remain in SubSaharan Africa, mobile money has significantly expanded outside of the region in 2013. With 19 planned mobile money launches, Latin America has the second largest number of planned services after Sub-Saharan Africa. The question is no longer whether mobile money services are available, but how to ensure that the continues to grow sustainably.
Kenyan telecom company Safaricom in 2007, launched M-Pesa -- the M is for "mobile"; pesa is Swahili for "money" -- one of the first mobile money transfer services in the region. Today, it has more than 17 million customers, about two-thirds of the adult population, and roughly a quarter of Kenya’s gross domestic product flowed through it in 2013. The company's success inspired providers around the African region to try and replicate the service, but it’s still a work in progress.
In Nigeria, the largest economy and the most populous country in Africa, the economic potentials of mobile money is limitless and still untapped. And according to Mike Ogbalu (MD Firstmonie) in an interview with punch newspaper in 2014 when he said
"If you look at a recent study where it says that about 40 per cent of the total population has financial services within reach (that is within five kilometers radius) you find out that that 40 per cent is such a low number and it considers factors like post offices, motor parks, microfinance institutions and banks, credit unions, and everything that one can consider as financial services. Now, with all of that, we have only been able to achieve a 40 per cent penetration and what this also means is that there is still a lot of room to cover. Now, if you look at the mobile, that is the GSM network, they have been able to achieve much higher coverage, and the good thing about the mobile is that it doesn’t require so much infrastructure on the consumer side in order to be able to sell that financial service. Also from the point of view of the literacy level, the literacy level in Nigeria is about the same or slightly higher than what you have in Kenya, and Kenya has had a very successful mobile money roll-out, and if you also look at the fact that a lot of the adult population in Nigeria are currently unbanked, then you find out that all of the odds are in favour of a successful mobile money rollout in Nigeria."
Talking about telephony penetration which is a prerequisite for a successful and wider reach of mobile banking ,it is evident that people have access to cell network more than they have to electricity and portable water. According to GSMA’s 2014 Mobile Economy report , in Nigeria 56 million people live without access to electricity, and 38 million live without access to clean water. But roughly 90 percent of the population has access to cell network coverage, which connects them to health, banking and other services through their cell phones.
Therefore, with a supportive regulatory framework that allows over-the- counter mobile money transactions and the efforts of some licensed companies, Nigerians will now be able to use their phones like a bank account— depositing, withdrawing and transferring money with their handset. They can also pay utility bills and in a limited way, pay for goods and services. And local businesses can use their phones to provide these services for customers without accounts or phones.
In view of these, the Central Bank of Nigeria (CBN) has approved two models for the implementation of mobile money services in the country. The Regulatory Framework and Guidelines on Mobile Money Services in Nigeria issued by CBN on its website, classified the services as bank led, which is a bank and/or its consortium as lead initiator and non- bank led, which is a corporate organisation duly licensed by CBN as lead initiator.
The apex bank explained that the introduction of mobile telephony in the country, and the identification of person to person payments as a practical strategy for financial inclusion, has made it imperative to adopt the mobile channel as a means of driving financial inclusion of the unbanked. The whole issue of financial inclusion adds a lot of value in that by bringing people into the financial system, it gives them access to financial services. This means they are now able to save and access micro schemes that will help and empower them.
The bank-led model allows a bank either alone or a consortium of banks, whether or not partnering with other approved organisations, seek to deliver banking services, leveraging on the mobile payments system. This model would be applicable in a scenario where the bank operates on stand-alone basis or in collaboration with other bank(s) and any other approved organisation.
The bank-led model allows a bank either alone or a consortium of banks, whether or not partnering with other approved organisations, seek to deliver banking services, leveraging on the mobile payments system. This model would be applicable in a scenario where the bank operates on stand-alone basis or in collaboration with other bank(s) and any other approved organisation.
The apex bank’s guidelines noted that the lead initiator should be a bank or a consortium of banks, stating that the non-bank led model allows a corporate organisation that has been duly licensed by CBN to deliver mobile money services to customers.
According to CBN, the lead initiator shall be a corporate organisation (other than a deposit money bank or a telecommunication company) specifically licensed by CBN to provide mobile money services in Nigeria. Under this arrangement, the participants are grouped into six categories: regulators (CBN), Nigerian Communications Commission (NCC), mobile money operators, infrastructure providers, other service providers, consumers and mobile money agents.
The introduction and full operation of mobile money in the country will bodes well for the economy as it enhance cashless society, brings about financial inclusion of the unbanked populace, facilitate economic growth through its effective payment system. Apart from these, it is convenient, accessible, much more secured than carrying physical cash, encourage savings and cost effective compared to banks having presence in every rural areas.
For all these benefits to be enjoyed the apex bank should work with all the stakeholders in the industry on surmounting challenges of epileptic power supply, poor telecommunication connectivity, lack of synergy between mobile payment operators and telecommunication companies and the need for enhanced customer awareness..
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