Adedeji Olowe

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 Seed	1,000,000
January	1,300,000
February	1,690,000
March	2,197,000
April	2,856,100
May	3,712,930
June	4,826,809
July	6,274,852
August	8,157,307
September	10,604,499
October	13,785,849
November	17,921,604
December	23,298,085
	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!

MMM Ponzi – There is always a Mugu in Lagos!

I found that MMM, a Ponzi scheme, is now one of Nigeria’s top websites. Despite past scams like Nospecto, people still fall for these. MMM will inevitably collapse.

I was doing a random research of recent and stumbled on the current list of top websites in Nigeria (October 2016). The list is dominated by the usual names – Google, Yahoo, Facebook, Nairaland, Linda Ikeji and MMM Office. Wait, what’s MMM Office?

It’s a Ponzi scheme and it has its own Wikipedia page. It has taken Nigeria by storm, so much some people are almost selling their cousins just to invest money there. The relevant authorities have however turned a blind eye, for now. The Guardian Newspaper recently wrote about it; the comments from Nigerians would make you weep!

It’s amazing that 10 years after I wrote about Ponzi schemes in Nigeria, and that it would come back again, it actually did. Wait, does that make me a prophet? Of course, I’m not. If I was, I wouldn’t be blogging but flying my own private A380 around the world.

Deji, can you just concentrate? Focus!

10 years ago Nospecto ravaged Nigeria with promises of 106% return per annum. I remember quite a number of friends and colleagues (luckily no family members) piled in their salaries into the deal expecting a big payout because they knew someone who knew the cousin of the uncle of someone who got a payout. I’m lost!

It got so bad that many account officers of a certain bank used their customers’ money to do kalokalo. The bank later perished but it wasn’t because of this. I mean, who knows?

But that wasn’t even bad enough. Penny Wise came out with a scheme that blew my hat off! This is how it worked. You give them a paltry N2,500 for a slot and over a period of 9 weeks, the scheme will pay out a cumulative of N251,390. Effectively, you multiply any amount you put inside by 100 in 9 weeks. Interesting!

I blogged about it and someone even said I would die of poverty! The vitriol was so caustic! I didn’t die, I’m not poor either but he got scammed.
Anyway, like all pyramids go, the bubble burst and the schemes went tits up.

It’s 2016 and MMM is the new King of Ponzi. Everyone is on it.
Everybody knows my stand on Ponzi schemes – if you do it, I cut off all ties with you. I have absolutely no apologies. Before you get your guns and take potshots, two reasons for my stance:

You sincerely believe that the MMM Ponzi Scheme is real
It means you lack an analytical brain and would walk right into an oncoming truck believing it’s Lego. I know some Ponzi schemes may appear legit and you need investment banking grade knowledge to unravel it. That’s understandable and if the illegality is explained to you, at least, you can comprehend and run for dear life. However, if you earnestly believe that MMM stands for something legit and logical, then you are probably not smart enough to be trusted with anything important.

You know that MMM is a Ponzi but want to take advantage
Ponzi schemes are as illegal as they come. Well, not as illegal as shooting someone or doing some of the things Donald Trump joked about. To take advantage of illegality just for the money means you are greedy, desperate and can do anything for money.

You are probably not someone I can trust with anything important.
I don’t run a business but I know that if a staff of mine does MMM, he’s on his way out.

I can bet my next month salary that the MMM Ponzi will collapse soon – either from its own weight or when the Central Bank moves in like they did 10 years ago.

See you in 2026
Well, I would be back in 10 years’ time to talk about the next Ponzi scheme. There will always be a Mugu in Lagos.

Addendum
I wrote the following articles 10 years ago. I didn’t have anyone to help proof-read then so be careful of the grammatical errors – don’t read aloud as you could choke.
NOSPETCO: A Classic Ponzi Scheme
Pennywise HYIB: The king of Absurdity
Original article on BellaNaija.com

Is Nigeria ready for digital banks?

Digital banks operate entirely online without physical branches, targeting tech-savvy customers. They face challenges in regulation, trust, customer support, transaction costs, and technology in Nigeria. However, with efficient execution, digital banks can revolutionize banking by offering simple, modern services.

There is so much confusion out there about what digital banks are. Bring a thousand self-proclaimed experts and you will probably get two thousand different definitions.
I am confused too, but for today, let’s pretend that I know what I want to say.
A digital bank, sometimes called a direct bank or online-only bank, is a type of bank where there are no branches and interactions with customers are through the internet, and of recent, mobile apps.
There is a distinction between mobile money and digital banks. Mobile money is usually a wallet accessible from mobile phones using SIM Tool Kits (M-Pesa by Safaricom in Kenya) or USSD (M-Pesa by Vodacom in Tanzania). Mobile money is primarily driven towards financial inclusion and the most successful examples are mobile telco led.

Mobile money is limited in features, have less than required interoperability with existing financial payment systems and for these reasons have failed in countries with a sizable chunk of middle-class population. MTN and Vodacom just shuttered their mobile money services in South Africa.
Digital banking is also different from mobile banking in the sense that mobile banking is banking on the mobile phone for accounts which are already opened in a traditional bank. So if you decide to smash your phone in the latest craze of clapping while taking a selfie, you can visit your nearest bank branch to wink at the new teller while taking cash over the counter.
Is Nigeria ready for a digital bank? Let’s analyze this from a simple point of view – what would it take to have a digital bank in Nigeria.

Regulation
Forget about the story of enabling technologies and a shift in demographics: Banking is a highly regulated business which the government has 150% interest in. There is a financial and documentary barrier to having a bank. N25B anyone? That aside, the Central Bank of Nigeria has different classes of banking licenses for which a digital bank type is conspicuously absent. Not to be deterred, some brave individuals are bootstrapping digital with minimal microfinance bank licenses. But having MFB as part of your brand is so meh.

Prospective Customers
Digital banking isn’t financial inclusion. One is driven by capitalism and the other by altruism. Digital banking is narrowly focused on middle-class customers who are tech savvy or comfortable enough to do their transactions away from the banking halls. Trust me, I’m one of them and our Nigerian local association is large enough.
Going to a bank branch in Nigeria is an exercise in self-flagellation. Sending someone else to a branch on your behalf is worse than water boarding. You endure endless traffic, you could get robbed coming back, the tellers don’t smile anymore (they were never smiling), you could age literarily standing in the queues for hours and when you get to the front of the queue, the system is down.
While mobile banking hasn’t been successful in Nigeria, it has been more of the poor back-end of the different banks. In fact, banks have been more inclined to open new branches and chase around for deposits than providing an awesome mobile or web experience.
Trust me, many of us would not miss going to a bank branch!

Trust
At no time in my life has my salary been good enough, so I don’t play with it at all. To hand over my hard-earned money to a digital bank without a branch where I can go make a scene or head-office where I can join others to picket is asking for too much.
I’m not so sure if the average Nigerian trusts an average Nigerian. Trust comes from ubiquity and longevity; a digital bank would need to be in the face of Nigerians for a while before it can be trusted. That would cost a lot of money in marketing – radio jingles, TV adverts, billboards, social media, tie-ins, etc.
During this love session, the digital bank must never ever, ever, ever, ever, make any mistake, if not the trust will deflate like a pricked balloon.

Customer Support
Things would go wrong, not once, not twice but as many times as it could go wrong. When this happens who will provide support? The contact centers of Nigerian companies are notorious for adding to problems and not solving them. Complaining about an emergency is an exercise in futility and even floor managers are impotent and wouldn’t help you.
A digital bank must build customer service into its core. It would be difficult but not impossible. Floor managers must also be able to make decisions.

Cost of transactions
Banking in Nigeria is very regulated much more than a C Compiler (if you get the joke). As Nigeria is still a cash-based economy, a digital bank with no debit card offering is DOD (Dead on Departure). However, giving cards would also be a DOA (Dead on Arrival) as the Central Bank mandates that the first 3 transactions are free for the customers (not the banks). A digital bank can probably never have its own ATM network. How would it fund it when it would cost at least N20M per ATM gallery?
I’m not a pessimist but I can’t figure out how it could be done at this time. Maybe an alliance with large banks? I don’t know any philanthropic bank in Nigeria who is ready for free ATM withdrawals for customers of digital banks.

Technology
Traditional banks are a mishmash of disparate systems held together by badly implemented integrations: Nothing works. Data are held in silos and never talk to each other. It’s a technological hell-fire where badly behaved bits and bytes are sent by the god of science.
These technologies are also insanely expensive and with USD beyond the reach of everyone, building a digital bank on available technologies is a business suicide.
The good news is that digital banks are mostly building their own technology stack (Atom, Starling, Simple, Monzo, Fidor, N26, etc.) and Nigerians have the intellectual chops to build better platforms than even these guys.
Established networks, especially MasterCard, are also lending their weight behind these initiatives to allow digital banks enter into mainstream interoperability.

Features
Traditional Nigerian banks offer everything and probably nothing. However, the average Joe like you and me just want a simple current or savings account, a debit card to go with it. You can throw us some overdraft or personal loan when we go broke. Let’s be able to send and receive money to/from other banks. Let’s be able to take cash from the ATM and when the dollar is available, let’s use our cards abroad.
We want an awesome mobile app. USSD banking is a must else don’t even bother talking to us. The internet app must be great and we don’t want to click until our fingers break just to do anything.
SMS and email alerts are compulsory and should get to us instantly. Don’t also lose our money to fraudsters. When we have transactions to dispute, don’t try to mock our intelligence or stretch our patience beyond limits. Let someone answer our calls and proffer intelligent analysis/solutions to our issues when we dial the Contact Center number.
These are not too much to ask for and I believe any digital bank worth its salt should be able to deliver them.

Conclusion
It has been a rambling long post but barring cost of transactions and technologies, digital banks can dip their toes into the storming river of Nigerian banking.
I think the country is ready now – there would be many casualties at first but over time, these digital natives could become behemoths, and you never know, appear in the top 10 of largest Nigeria banks.

5 mistakes I made mentoring

Everyone needs a mentor, but being one isn’t always easy. I’ve made my fair share of mistakes along the way, and here are five that have taught me invaluable lessons.

There is no greater joy, for me, than helping others achieve their career potentials. I’ve few things that really make me happy; mentoring is right there at the top. Followed by beans cooked in red oil. And then èbà with èfó rirò.

Just like my mentees, the mentoring journey has taught me quite a number of interesting things which I think would be nice to share with others who may want to annoy their younger friends and colleagues in the name of mentoring.

The joy of coaching others doesn’t mean it comes easy to me and those I mentor. In fact, I could be very exasperating while trying to help others: I’ve heard phrases like “Na by force?”, “Na fight?”, “E don do!”

I’ve made a gazillion mistakes helping others achieve their dreams but the following 5 stand out remarkably.

My aspiration is not yours
When I was younger I wanted to be everything – from piloting a plane, to going to the moon and every random career in between. I finally found myself studying engineering in the university, which I barely excelled at, and eventually ended up a banker.

Guess what? I wanted all my mentees to work in banks. I extolled how banking is a nice career, how you could move up and own half of Banana Island.
Utter rubbish!

Luckily, I learned quickly that as a mentor, my job is to help my mentees achieve or exceed their life’s goals and aspirations. Instead of shoehorning my own myopic career ideas into their already jaded brains, I started listening to them, discussing their ambitions and helping them move towards that.

Professional career is everything
I used to look down on people who wanted to do things that don’t fit into my narrow view of professional careers. How stupid I was!

Luckily nobody has been hurt yet as I never had the chance to force people talented in non-professional inclination into suits and ties. Imagine the damage I could have done to Usain Bolt if his mum was my cousin? He would probably be slaving his backside at some law firm now.

I’ve since understood that success comes in different flavors and at the beginning those who don’t want to be professionals may look different from me but it doesn’t mean they don’t know what they want to do.

Careers and family are zero sum
A colleague told a friend of mine that she thought I was cold to her because she wanted to get married. That wasn’t the reason but it showed how bad my view about family and career used to be.

To have an outstanding career, something has to give, but mine was on the extreme side.

It took a long time for me to come around to the fact that you can have a good family life and an outstanding career. It is going to be tough but tough things are what successful people do.

Competing with mentees
Sometimes I set goals for my mentees and I to achieve and most times I beat them hands down. It never had the right effect.

Mentees look up to me for strength not as competition and when they lose it had demoralizing effect on them.

I’ve since learned to coach, support, encourage and sometimes give a little kick to the back side but I would never again compete with my mentees. Next time I should take on competition of my own size.

Giving up easily
There is nothing as annoying as giving your time and effort to move a mentee ahead and he’s not measuring up: He’s taking time to slack off or doesn’t appreciate the effort. The natural thing for me was to think they weren’t serious or deserving of my time so I promptly bumped them off.

How wrong of me! Yes, it is still annoying, but I’ve since learned that Rome wasn’t built in a day. No kid growing up has ever stopped walking just because of occasional tumbles. So, I’ve learned to chill a bit and give as many second chances as I can muster. After all I used to be annoying too and others took second bets on me.

The upside to mistakes
Knowing nobody is perfect is the biggest step towards Nirvana and this has helped me more in life than anything else. Instead of killing myself from doing the wrong thing, I simply learned from it and moved on.

Making the same mistakes over and over again is a different story entirely – you may need a trip to Yaba Left to find out why your gear is stuck at 2. Like my old boss, Joshy, would say – mistakes are allowed, errors are unforgivable – whatever that means!