Month: November 2016

Who shall tell our stories?

I have spent the last few months reading, researching, and discussing with many payments industry experts about what the new wave of FinTech and payment innovations mean for the world, Africa, you, and most importantly me.

I’m sorry that I have to use the FinTech jargon. Just like big data, cloud, etc. FinTech as a buzzword is already annoying the heck out of me!

Opinions, just like the sands of the Eleko beach, are many, cheap, and quickly forgettable. However, what is not disputable, is that a lot of innovative things are happening all over the world and it is likely that the financial world as we know it may be gone soon.

Meanwhile, if I ask the average Joe or Jane, as the case may be, about the companies leading these packs, you get fancy names like Atom, WeBank, Ant Financials, Stripe, N26, Monzo, etc. Everyone is talking about BlockChain, Open Banking, PSD2, Trump, etc. So where is Africa?

Before anything else, I need to say that Africa is not a country!

I’ve had the opportunity to talk to many companies doing fantastic things in different countries in Africa, but the average African doesn’t know about them. Yeah, you want to mention M-Pesa? Vodafone invented M-Pesa for Safaricom in Kenya and Vodacom in Tanzania and partly funded by DFID.
While the world is begging the USA to start doing instant interbank transfers, Nigeria and other countries like Zimbabwe have been doing it for centuries, but who knows? Outside of Africa, more people know about UK’s faster payments than Zimbabwe’s ZIPIT. Does ZIPIT means “to keep quiet”?
Tax collection is a mess in Nigeria, but the TSA platform from Remita is sufficiently more advanced than what can found in other countries, but who knows?

mCash, recently launched in Nigeria, promises to upend merchant payments but hardly did the story get beyond the border before it was rudely sent back home.

MyCash is a pure-play digital bank in Zimbabwe running out of a tiny office on a shared infrastructure, but I can bet that you are reading about it here for the first time.

Africans may not have achieved the level of development seen in western countries and Asia, but not everyone has been sitting around climbing iroko trees. However, while we may be furiously developing payment and other technology solutions, hardly do we get the word out.

If we think others will tell our stories, we may have to wait until chickens grow teeth. Letting the world know isn’t just about the beautiful 15 minutes of fame that everyone craves, but more importantly, to encourage our youth that good things are also possible in Africa.

Even though the technology behind M-Pesa may have come from Vodafone, the airtime it got spurred the rapid development of mobile money across Africa, and it is one of the good things exported by Africa to the world.

We need more beautiful stories to be told. But much more, we need storytellers.

mCash would change the future of payments in Nigeria

mCash, leveraging USSD, revolutionizes payments in Nigeria. Available to 28 million users, it bypasses POS challenges with instant settlements and broad accessibility, potentially transforming electronic payments nationwide.

The Nigeria Inter-Bank Settlement System (NIBSS), along with numerous banks, have launched mCash as an alternative payment system in the populous country in Africa.
mCash rides on USSD and anyone can easily use the code to make payments at large stores, corner shops, etc. The mCash payment system, which is automatically available to over 28 million account holders in Nigeria, can be used with any smart or feature phone.
The Central Bank of Nigeria has been pushing electronic payments in Nigeria for years. The elaborate program, dubbed Cash-less Nigeria, was driven massively in partnership with banks, switches, schemes and other stakeholders. The results have been fantastic as electronic payments in Nigeria is on a tear.

Despite the massive success of the Cash-less Nigeria program, merchant payments using Point of Sales (POS) terminals have not been as successful. Payments at POS terminals have been bedeviled with a lot of issues: High cost of terminals, which has been exacerbated by the devalued Naira. Poor telco data/GPRS infrastructure. Overregulation of participation and fees, which has made the business to be highly unprofitable. The list of issues goes on.
It was no surprise that banks started pulling back. Many at times, merchants desirous of having terminals are not given because they may not have enough transactions to allow the banks breakeven.
Not deterred by these, NIBSS and some banks rallied around to design a new payment system which would latch on to the recent success of the USSD banking in Nigeria.

Rising from the ashes of mobile money in Nigeria, another failed experiment in the quest for a cashless society, banks quickly repurposed their USSD codes to connect directly to bank accounts instead of mobile wallets. As the average Nigerian is already used to using USSD codes to load airtime or select call back tunes, there was an immediate affinity. USSD banking in Nigeria now has more users than all other channels apart from payment cards.

The mCash payment system allows account holders to dial their bank codes or a special general purpose code and then pay any merchant. The paying customers and merchants do not need to be with the same bank. The transactions ride on the existing NIBSS Instant Payment infrastructure. Merchants get settled instantly instead of waiting until the next day as it would be for POS transactions. Banks do not need to create additional back office processes as the payment transactions are treated like regular NIP transfer payments.

Even the merchants love the new system as they would not need to pay interchange or MSC.
This is a new payment system and the jury is still out on how transformational it could be. It has all the potentials of a successful platform: reach, ease of use and cost to merchants.

Understanding the MMM Absurdity

My recent post on MMM Ponzi drew mixed reactions. On Bella Naija, I was roasted with vitriolic comments. On LinkedIn, most agreed MMM is a scam. Simulation shows a 2,230% return is absurd. Let’s see how it goes.

My recent post on MMM Ponzi drew divergent responses. On Bella Naija, my backside was practically roasted with the vitriolic comments from those who feel that MMM is a divine intervention. After all, why is it my problem if someone wants to start a bonfire with his money?

On LinkedIn, the responses are direct opposite. Almost everyone agreed that MMM is a scam and only a stupid person would do it. Of course, there are few guys on LinkedIn who share the opinion that it isn’t my problem.
Truth be told, it is really not my problem.

But then, the troublemaker in me wouldn’t just roll over and die. How else can I describe the absurdity of MMM but to do a simulation of the investment with hyper-return?

So, let’s say James, a friend of mine, decides to “invest” N1,000,000 in MMM by January 2017. If he doesn’t touch the money and keeps re-investing capital and interest, this is what he gets by January 1, 2018. A stratospheric 2,230% return!

Initial Seed1,000,000
January1,300,000
February1,690,000
March2,197,000
April2,856,100
May3,712,930
June4,826,809
July6,274,852
August8,157,307
September10,604,499
October13,785,849
November17,921,604
December23,298,085
 2,230%

My birthday is January, and considering I would be hitting a major milestone in 2018, I should expect a fantastic gift from James, right? Wrong! I can bet that James would be dead-ass broke by then.

Trust me, if such a guarantee return exists, all we need Buhari to do is ask Aunty Kemi, the Minister of Finance, to put in about N100B and he can use the N2.3 trillion Nigeria would get by January 2018 to fix Lagos-Ibadan Express road, fund the outstanding salaries of the APC governors’ states, build 3 more refineries and drop in about N200B for 2018 investment. Come 2019, we will have N4.6B to spend. It’s election year and we will return Buhari with all happiness.

For me, I can put in N10M and just chill for a year; a year’s wait doesn’t kill anyone. With N232M, I can make a foray into real estate and live the rest of my pipe dream life in luxury.

It doesn’t make sense right? Yes, it doesn’t!