What has been the impact of mobile money on the cashless policy initiated by the Central Bank of Nigeria, CBN?
The emergence of mobile money in Nigeria has created another effective channel for the cashless policy by the CBN which is gradually gaining ground in the industry. Has the cashless policy impacted on the Nigerian economy? Managing Director, FETS Limited,
Mrs. Omotade Odunowo
In general, the adoption of cashless policy is meant to stimulate the economy with increase in employment, reduction of cash robbery, reduction of cash related fraud, theft and corruption. As the cashless economy in Nigeria continues to expand, there is growing reduction in the cost of banking services, banking security and safety risks and positive turnaround in banking related corruptions. All these have in turn boosted the modernisation of the Nigerian payment system. Currently, this policy has helped to reduce the notes and bills circulating in the economy, which then reduces handling operation cost and cash related crimes. How safe is the use of mobile money and what is the limit it can accommodate for the day? Mobile money is relatively safe as it has both first and second level security features and also requires a personal identification number (PIN) that we advise customers not to share with anybody. So, it is quite safe. Not many people know the difference between internet banking and mobile money. Are the two the same or are they related? They are similar in that they can both be used to transfer money electronically. While internet banking involves having a bank account and internet, Mobile money requires just a mobile phone and an active phone number, thus expanding financial services to areas where the conventional banking infrastructure is lacking. A lot has been said about using the mobile money platform to get to the unbanked population of the country. How effective has this been? Mobile money works with the aid of a robust agent network. This has been an effective way of closing the financial inclusion gap in Nigeria, in the sense that the mobile money platform has opened opportunities for all individuals to access financial services and closed the usual limitations such as inaccessibility, illiteracy to mention a few. Mobile money will bring many unbanked to the financial sector and thus boost the economy. It has been a slow and steady progress based on the huge investment needed to penetrate the rural areas, but we have leveraged on relationship with organisations with deep rural penetration and our target is to get at least 25 percent of the unbanked on our platform by 2018 because we believe that the Nigerian economy can only grow when all these people are included in the Nigerian financial system. Can you tell us a bit how the mobile money really works? How would customers receive money on their phone? Customers can either register using our USSD code (*610#) or download the app on their smartphone devices, register and get a unique pin. This creates an electronic wallet system that enables customers to make transactions such as airtime top up, bank transfer, cardless transactions, pay utility bills from their wallet. Customers can fund their wallets (pay money on their phone) using their debit cards or by visiting our agents. Let’s talk about your flagship product, the fetswallet. How does it work, do I need a bank account to open the fetswallet account? No, you don’t need a bank account. All you need is a mobile phone and an active phone number. To be able to use the mobile money platform.It suggests one must be connected to a network. What happens when one ports from one network to another? Will that affect one’s fetswallet account? The phone number serves as the unique identifier. As long as this number remains the same it doesn’t affect the fetswallet account. Do all mobile phones support the fetswallet or must one have a smartphone? Yes – All mobile phones can access/support fetswallet and it is not limited to smartphones. Smartphones can access fetswallet either through the fets application or by direct browsing on the internet while non smart phones can access this via USSD CODE i.e. *610#. How do you keep your mobile money account secure? The pin given when you register is not to be shared with anyone and if you forget your pin, you can call our customer service center for a pin reset. Why is NCC involved in the mobile money? The Nigerian Communications Commission (NCC) as the independent national regulatory authority for the telecommunications industry in Nigeria is responsible for creating an enabling environment for competition among operators in the industry. Since Mobile money is a form of electronic financial service platform, the NCC is involved to ensure that the challenges in the digital financial services sector are resolved as well as guarantee the integrity of the services they provide. Do you have plans to open fets outlets across the country, especially in the rural areas where the unbanked Nigerians live? Yes, fets coverage and agency network is pan-Nigerian and we are constantly extending our reach across the various territories. Apart from the fetswallet, what other products and services do you offer your customers? Our other products include ‘fetspoint,’ which is a payment aggregation solution, ‘fetstraq’ which is a payment and goods monitoring system, ‘fetsremit’ which is a platform for disbursement and fund remittance, and we are constantly trying to develop new products to meet the needs of our customers. How will fets benefit a user, be it clients or customer, agent or merchant? Fets brings financial services to Nigerians who were either under-banked or unbanked. It provides a seamless and convenient channel of payment for the customer, instant value for goods and service for merchants, a source of revenue and employment for agents, and a bespoke payment solution for our corporate clients. If we may ask, how do you get paid for the services you offer? We charge a small percentage on each transaction. With the current uncertainty in the forex market, how do you settle your international transactions for your clients, or are transactions on the fets platform limited to Nigeria? Transactions on fets platform are limited to Nigeria as we are a mobile and electronic payment company regulated by the CBN to transact in Nigeria. How has the current state of the economy affected fets? Well, we have had to continuously modify our commission structure to meet the changes in the business of our clients. The current level of inflation has also led to a corresponding rise in cost of agent acquisition. Mobile money services that allow customers to transfer funds using their phones have proved hugely popular in some other parts of Africa like Kenya. How do you plan on making it more effective in Nigeria? The success factor of mobile money business is agent network. As such we plan to leverage this across the country and develop more customer-friendly services like easy access to loans, micro insurance and healthcare Mobile money has been terminated in some countries recently; do you think fets and other mobile money operators can keep mobile money running in Nigeria? Yes – there is a huge potential for mobile money in the downstream market of the economy. Our duty is to enlighten people in the retail space on the benefits of using mobile money. As a mobile money company, fets has the responsibility to continue to support government policies that facilitate mobile money operations in the downstream sector. What has changed for your potential clients? The current economic situation has affected everyone. This has made most companies to look for an indigenous solution that can provide an effective payment processing system at a reasonable cost, which we have tried to provide in the FMCG, Utility and retail space. Why would fets be considered at all as a prime platform for financial transactions? For us at fets, it’s all about security, ease of use, robust technology, valued added services, no downtime, seasoned IT professionals, user friendly app. What are the current challenges in the industry? Same as has been said. High cost of agent development, lack of proper awareness/information about mobile money and a low percentage of government to people business channeled through mobile money companies.