Recharge card business threatened by mobile payments
Nigeria’s vibrant recharge card
business which generates an estimated N1 billion daily is been
threatened by the emergence of mobile payments.
The Central Bank of Nigeria (CBN) had
licensed 16 mobile money operators to render mobile banking and payment
using agent networks, and using the mobile phone as a means of
delivering financial services.
Mobile money, according to industry
analysts is expected to play an integral role in the apex bank’s drive
to capture the unbanked population in Nigeria. But more importantly,
mobile payments would enable Nigerians perform basic financial
transactions such as air-time top up efficiently without having to
purchase physical recharge cards.
“Currently, the airtime retail business
will experience a steady growth as recharge card sales increases.
However, the future of this platform may change significantly as the
drive towards e-payment and mobility is being attained. In the nearest
future, the channels of distributing airtime will change to mostly
e-transfers and payments. This may eliminate long chains and channels
previously being used.” Femi Adeagbo, chief executive officer, Comnavig
Information Communication Technology (ICT) Consultants, said.
According to him, “If a chunk of this
income is moved to admittedly more efficient mobile money channels,
significant income and job displacement may occur.”
To address this income displacement
challenge, Adeagbo said specific programmes aimed at tooling recharge
card sellers with skills and resources to enable them offer agent
services under a retail principle or as stand-alone businesses should be
developed.
Statistics from the United Nations
Conference on Trade and Development (UNCTAD) show that 40 million mobile
money user currently exist in Africa. Industry analysts estimate that
about 20 million Nigerians are expected to be embraced into the formal
banking system via mobile money over the next three years.
According to them, m-payments will
change the way consumers interact with financial services and make
payments. A research by eShekels shows that recharge card is one of the
fastest selling products by telcos in the country, recording daily sales
of over N1billion worth of recharge cards.
The report further says 100 naira
denomination of recharge cards is most patronized among subscribers of
various operators as subscribers patronize the lowest denominations
available.
This indicates that lower denominations
(500 naira and below) control a larger share of the market. According to
the research, different channels of distributing recharge cards will
change to mostly e-transfers and e-payments, thereby eliminating the
airtime distribution chain.
On the other hand, over 49 million adult
in Nigerians do not have mobile phones and, as such, cannot
instantaneously benefit from the mobile money scheme aimed at providing
financial inclusion for the un-banked population in the country.
Latest figure on the website of the
National Population Commission (NPC) revealed that Nigeria’s population
now stands at 167 million people.
Enhancing Financial Innovation &
Access (ELFINA), a World Bank-backed body that aims to deepen financial
inclusion in the country, in its Access to Financial Services in Nigeria
2010 Survey, found out that the country’s population comprised 82.3 per
cent of adults or over 137 million Nigerians.
In addition, the apex bank, in
collaboration with the National Bureau of Statistics (NBS), carried out
an ICT access survey in 2011 among adult Nigerians between the ages of
15 and 60 years.
The survey, among other things, revealed
that 63.9 per cent (representing 88 million) of the country’s 137
million adults already had mobile phones.
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