Explainer: Speed, ease, convenience are why many Nigerians are turning to mobile money

High investments in the technology mobile space, convenience, alongside confidence from mobile consumers are the reasons why mobile inter-scheme transfers increased 57 percent in nine month analysts have told BusinessDay.

An analysis of the mobile transfer data obtained from the Nigeria Interbank Settlement System (NIBSS) show that the value of transactions (transfers) via mobile devices rose by 57 per cent to N216.3 billion in the first nine months of 2018 as against N138.0 billion in the same period last year.

Similarly, the volume of transactions of mobile transfers also increased by 47 per cent from 3.6 million in 2017 to 5.4 million as at September 2018. These data illustrate just how much Nigerians have become dependent on mobile money transfers.

Ayo Akinwunmi, Head of Research, FSDH Merchant Bank said the investment that has been going in the tech mobile banking space and people’s confidence in it has led to the growth. A lot of banks and fintech companies are investing in the tech mobile space.

Seeing a business opportunity mobile money presents, the banks have buffed up their security system and are making investments in cyber security to make transactions over the channel more secure. This is building confidence in the system as can be seen by the large volumes of transactions.

In addition, the volume of transactions on NIBSS instant payment (NIP) platform rose by 102 percent to 501.1 million in the period under review in 2018 from 248.1 million in the same period of 2017 and its value from January to September increased by 40.2 percent from N40.5 trillion in 2017 to N56.8 trillion within the same period this year.

As regards Point of Sales (POS) activities, transactions worth N1.6trillion were carried out all over the country from January to September 2018, recording a 65 per cent increase as against N974.7 billion in 2017.

The volume of POS transactions also rose by 99.5 per cent from 98.73 million in the first nine months of last year to 196.83 million in the same period of this year.

Bismark Rewane, MD, Financial Derivatives Company said mobile money systems are convenient and people are finding it more efficient. Also, there is more marketing and there are more intermediaries in the financial payments providers system making the growth seem natural.

The increased penetration or use of mobile banking is already having an impact in the volume of bank cheques. In the first nine months of 2018, the volume of bank cheques transactions reduced by 16.5 percent to 6.8 million from 8.1 million last year.

Rewane said mobile transfers is reducing the volume of transactions by cheques. First, there is a limit to the amount that can be withdrawn by cheques. For example, cheques have a limit of about N10 million and secondly people are finding it more convenient to do their financial transactions by phone because of the speed it offers.

Ayodele Teriba ,CEO, Economic Associates said that more people are catching up with mobile transfers than before. In the past, before you can do any transfer, you would have to go to the bank but now you can use a token at home to do your mobile transfer anywhere.

BUNMI BAILEY