Payments - Adedeji Olowe

Contactless cards can revolutionize payments in Nigeria

Contactless payments could revolutionize Nigeria’s payment system with their speed and convenience, but adoption remains slow due to regulatory gaps, trust issues, and limited infrastructure. To overcome this, banks should partner with high-traffic merchants and launch campaigns to showcase the ease of tap-and-go payments. With the right push, contactless transactions could become mainstream, driving a significant boost in cashless payments across the country.

The ease and speed of a payment method are directly proportional to its adoption. Although payment with cards has been growing at about 100 per cent CAGR over the last three years, all you need to do is stand behind that smug, self-entitled millennial stamping her feet while waiting for a purchase to finish to know that paying with debit cards at POS terminals would never be mainstream for everyday payments.

The UK was at the same junction a few years ago although using your card for payments was significantly faster. Then things changed when banks allowed regular debit and credit cards to be used to tap-in and out on buses, trains, and trams. Contactless transactions exploded. You only need to see contactless payments in action for you to be smitten.

You will ask yourself just one question: why have we suffered this long?

When properly configured, contactless payments go through in less than 1 second, just the same time it takes to touch the card to the reader, and that’s it.

How do contactless cards work?

Not so simple. On a contactless card, the plastic has a small antenna that allows it to wirelessly transmit payments information from the chip on the card to the card reader. When you touch your card against the reader, they both talk to each other. Contactless can work in both online mode (where transactions are sent to the bank for authorization) and offline mode (where the bank gives some leeway to allow payments to be approved by the chip on the card).

For security reasons, banks, governed by national standards, set certain limits. For example, the bank will determine the number of times you can do touch-and-go before you can use your card for online payments (where you have to input your PIN). Also, there is also a maximum amount you can do at a time. You can read about the limits for different countries here.

Despite the benefits of contactless, this is yet to catch on in Nigeria. Nevertheless, this has not stopped banks from taking the bull by the horn. Over the last three years, Nigerian banks have been giving out contactless cards by default to all customers. Despite the N30,000 limit, but with no places to use them, it has been an exercise in futility.

The challenges to using contactless in Nigeria are not as many as I previously thought though they are not trivial.

There are no playbooks for contactless payments in Nigeria. In other countries, the regulators always specify the rules that govern payments, including contactless. We have a myriad of regulations for payments in Nigeria, but none is looking at how contactless should work.

Risk acceptance in Nigeria is also a challenge. Abroad, banks trust that transactions done in offline mode will always be paid by the customers. And when cards are stolen, the banks will refund the customer the amount the thieves have done for offline payments. In Nigeria, banks don’t trust the customers to pay back, and the customers don’t trust their banks to make good of money stolen when contactless cards are lost. An impasse ensues.

There are hardly any shops in which you can use contactless cards. It’s one thing to have a contactless card; it’s another thing to have places you can use them. The millions of cardholders taking their contactless cards around use them as decorations since they are no places to tap and go. This, however, creates a chicken and egg problem. Apart from card issuance, no other bank is serious with contactless cards, so the market is small, so this makes banks not to invest in contactless reader POS. Why buy POS that nobody would use.

Irrespective of the challenges of contactless cards acceptance and issuance, the immense benefits and its ability to transform payments and make cashless real means it makes sense to pursue its usage. And the pressure on every bank, there are more cardholders than users of USSD and mobile apps.

Product managers can deal with this by getting customers to activate their contactless cards. And they could work this way. Cardholders need to be shown the ATMs, insert their cards, and press in the PIN; an action will be displayed on the screen that will show them a pop-up message from CBN that puts a card on the line in their accounts. Each customer will be responsible for his settings, and if the card gets lost, well, it’s like your wallet getting lost with the cash you just got from the ATM. The benefits are apparent; banks reduce their liability while customers can see what they are comfortable with to get the benefits of faster checkouts.

Banks should have a strategic partnership with high-traffic merchants such as tolls and major supermarkets. These would be anchor merchants that can help drive the adoption of the usage. After all, a picture is worth a thousand words – nothing will convince anyone to adopt contactless faster than seeing it in action. And by the way, the merchants also enjoy contactless as they can handle customers more quickly during peak shopping periods.

With those two things in place, the last logical piece of the tripod legs would be a massive campaign to let customers know about contactless. Nigerians are very aspirational so getting a few A-listers and Nollywood stars to be the face of this would quickly turn tap-and-go into a must do for everyone.

When the ease of payment with cards is not due to an actual counting of dirty Naira notes to make payments, we should be looking at annual transactions at least ten times more than the 2023 POS payments.

10 predictions for digital payments in 2024

A lot is going to happen in 2024, but do you want to know what they would be?

I have been making annual fintech predictions for so long that I should be a certified babalawo by now. Unfortunately, most of these predictions never come to pass.

Interestingly, some of these predictions have been on point such as a major player getting acquired; Payments Services banks flopping; CBN cashless policy failing; rise of agency banking; eNaira eating dust; etc.

Many have also stubbornly refused to come true; rendering me a digital Nostradamus. Visa refused to buy Interswitch and Mastercard refused to buy Etranzact; transfers never became free;

But then missing the point is what predictions are all about; getting excited about things we don’t know and probably won’t happen.

In the grand scheme of things, to err is human and to predict, is human as well. Let’s see what 2024 has got in stock.

The Central Bank of Nigeria recently unbanned crypto and everyone threw a party. But we keep forgetting why they got banned in the first place. Truth is crypto doesn’t offer much value beyond the ability to move tons of money around without governance which tends to attract the wrong sort of crowd.

Once this gets abused again, and it will definitely be; a new ban would land and this could be permanent or the requirements so stringent that it’s a technical ban.

#2 Nigerian banks screws up cNGN stablecoin

In unbanning crypto, the Central Bank of Nigeria also said that banks could have stablecoins. I laughed in Ijesha. Is it the same banks that can’t handle simple fraud issues; get QR to work on their apps; and keep their best hands; that would build and run stable coins?

Sure, CEOs would drag their helpless CTOs to try something out but they will all fail spectacularly.💣

Nigeria banking and crypto are like oil and water; everyone should just stay in their lanes.

#3 Direct debit comes of age

Cards ruled the payments world for decades. Then faster payments came along. In Nigeria, interbank transfers beat the hell out of cards. But cards still rule the internet and subscription payments like an aging African dictator.

Maybe not for long; NIBSS, Paystack, OnePipe, Mono, and Lendsqr (yes, let me throw that in) have been hard at work making direct debit sexy and it’s probably going to explode.

Direct debit is going to be the fastest growing payment method since virtual accounts.

#4 Interbank crosses 20 billion transfers in a year

When you do a transfer and the money appears in your recipient’s bank account in seconds, it’s probably the guys at NIBSS doing magic. Transferring money has been growing faster and faster each year since 2011.

In 2023, Nigerians sent more money through NIBSS in a day than they did in the whole of 2015. That’s over 365x.

The ease of transfer is so unprecedented that maybe this is the year that 20 billion alerts will ring across the network.

#5 Open Banking goes live

We have been at this for too long. By June 1, it would be 7 years since I have been shilling open banking across Nigeria and Africa like a snake oil salesman. This time around, I am not predicting, I’m begging the gods of whatever to just let this go live so I can focus on other things. I’m not young again.

#6 Banks and Fintech crack on fraud

The Nigerian payments space is now synonymous with fraud. In 2023, over N14b was tracked to have been lost with many pundits privately saying this was grossly underreported. However, different stakeholders from FintechNGR CEO Committee (I’m a member), to the Central Bank of Nigeria, and even NIBSS, are all planning an all-out offensive against fraud.

You can’t understand how painful fraud is until you have lost money or your entire career upended because of fraud. The worst that can happen isn’t just to lose money, but to spend months in detention for a fraud you don’t know anything about.

#7 Agency banking evolves

Agency banking was one of the fastest growing fintech segments for about 4 years and that led to the rise of Moniepoint, Nomba, and MTN Momo. But the market is getting saturated; margins are thinning out; and agent loyalty is now as rare as a unicorn riding a Yeti.

But knowing the smart guys around payments, trust them to build more values on top of the agency ecosystem. What could this be? Delivery; address verification; last-mile lending; returns drop-offs; etc. Whatever brings extra is god-send.

#8 A major player gets acquired

With the Nigerian economy so badly hit and the Naira falling faster than a meteor; valuation of Nigerian fintechs have taken such a bad hit that most can’t even afford to do a raise as it would be at a significant valuation discount. Yet, most of those who haven’t died are doing a good job.

It means those alive are now cheap as hell to buy; with cash runways now measured in days and weeks; it’s a matter of time a good one with solid fundamentals is snapped up.

#9 More fintechs bite the dust

The funding winter has proven to be long, harsh, and deadly. Every month we get inundated with burial ceremonies of one fintech or the other. Unfortunately, the funding pandemic may last longer and even more startups will die in the early part of the year than ever before. And it’s simply because most are running out of gas and funding conversations are not funny.

But for startups who manage to stay alive, expect glory from 2025.

#10 NQR finally found legs

Paystack, Moniepoint and Nomba have been doing a number with tabletop payments in the last 18 months. Walk into any shop and you see a cardboard or plastic with QR code or account number to pay into. The reason why this hasn’t caught on is because Nigerian banks have been poor with their QR code payments. Of the 20 major banks, you can only pay with QR on just 6 of them.

But things could change this year because #1 CBN could whip banks into shape, forcing them to make this work and then customers could use them or #2 fintechs and others would use shame or moral suasion to make banks do the right thing.

If NQR pans out; it could blow up payments.

Wondering what happened the previous years and the predictions? Read about my takes for 2018, 2019, 2020, 2021, 2022, and 2023.

Fraudsters are raping the Nigerian fintech space to death

Rape and financial fraud share a common thread: the silence of victims, often due to shame. In Nigeria, banks and fintechs suffer a N12 billion loss to fraud, yet remain silent, fearing the stigma. This silence hampers justice and perpetuates the cycle of crime.

Rape is the absolutely worst thing that could happen to anyone. It’s so horrible that if rapists are caught and sentenced to death, many people won’t even bat an eye and simply believe it’s justified. It’s so horrible that some rape victims commit suicide.

But if it’s such a terrible offense with severe consequences, why do rapists often get away without consequences? The answer is pretty straightforward, albeit very sad: Most rape victims would rather keep mum than expose these bastards.

Naturally, the next question could be why are victims so reluctant to step forward to the extent that many accept that they may never get justice but stay silent all the same?

The answer to this, much like the former, is also quite straightforward.

Shame.

Nigerian banks and fintechs have been shamed into a N12 billion silence

It’s no secret that victims are often shamed into silence and even merely the thought of being shamed is enough of a deterrent for those who may want to speak up. Many times, people even forget about the guilty party and focus on grasping at straws to blame the victim and try to convince them that they were complicit in their attack.

Similarly, shame is what makes it difficult for financial providers whose businesses have been defrauded to speak up even when they can get justice from the authorities.

Would you believe that since the start of the year, there has been a systematic rape of banks and fintech? I’ve personally tallied ~N12 billion lost to frauds and hack. Every bank and fintech hit has been groaning in silence but no one is ready to speak up.

And I’m not just talking about small or new banks, I’m talking about from the big 5 banks all the way down to the smallest ones; fintechs included. Business Day recently mentioned Fidelity, Access Bank, and others who have lost billions to fraud over the last few months.

The discussions about fraud are happening behind closed doors, Telegram channels, WhatsApp groups and the groans are growing louder but still, no one is ready to break this costly silence.

And that, fellow Nigeria, is what the fraudsters are banking on.

Why is fraud running so rampant?

A major cause for concern is sloppy APIs and weak security infrastructure that allows bad actors to gain access to financial systems and move money out. However, despite the more sophisticated systems and security measures with the large banks, people are often the weak links in the system.

Generally, humans will be careless but it also happens that bank staff are bribed to bring in compromised devices to work, etc. which makes it possible for fraudsters to access the banks’ database externally and use private APIs to perpetuate all sorts of crimes.

Of course, we can’t leave out the fraud committed using debit/credit cards and POS machines. Chargeback fraud is so rife you could write an entire book around it. Chargeback destroyed Union54, a once promising African card processor.

What happens to the stolen funds?

Well, the stolen funds take quite the journey. First, the money is sent to another bank, split and passed through even more banks before it then moves through some certain new generation banks; some of which are foreign-owned.

Nigerian banks protect themselves. When cases of unauthorized transactions are reported, it usually triggers a flurry of emails and calls between the banks and the accounts suspected to be involved are restricted pending further investigation. There’s a legal agreement between banks to do this. Albeit, not sanctioned by CBN.

Unfortunately, the new generation banks and fintechs don’t comply with this rule and so the stolen funds simply disappear. Poof!

What’s the implication if this continues?

The reality is that the traditional commercial banks make enough profit to cover getting hacked by APIs so while we should be concerned about them, they’re not the ones most affected by this menace.

The real problem is with the everyday Nigerian who loses their hard-earned money. If the banks are unable to trace where the money went, there’s nothing they can do and their money is simply gone.

The ability of the financial sector to play its role effectively is rooted in trust. Even the strongest economy will crumble if end users lose faith in the financial system. This is what’s at stake while fraudsters continue to destroy decades of work that the CBN, banks, and fintechs put in to build the system we currently have.

For all its many woes, Nigeria is actually ahead of quite a number of its counterparts in terms of the capabilities in the financial sector; especially with electronic transactions.

Therefore, if Nigerians lose in electronic transactions, that sets us back significantly and all hopes of growing the economy vanish.

By law and regulations, banks and fintechs are required to declare to the CBN whenever there is fraud; either hacks or just the everyday “Nigerian Prince” scenarios. But we have to be pragmatic for a minute here. Remember the shame we spoke about earlier? Well, this is where it comes in. The shame associated with declaring a successful fraud attack to the CBN prevents affected organizations from doing so.

If you have had the misfortune of CBN having you to explain your mistakes, then you would understand while sometimes when you kids get bullied in school, (or even more dastardly, raped) then you would know why no bank sings to the CBN when they are taken advantage of.

To make it worse, when customers hear a bank has been hacked, it immediately reflects poorly on the business and suggests incompetence and an inability to meet expectations.

It’s almost like the fraudsters responsible for these terrible acts don’t even exist at all.

But who is to blame here?

The short answer is everyone!.

Quality of human resources within the banking and fintech ecosystems have taken the hit as every smart one of them has “japa“. Some of us may claim to “love” Naija but the truth is, the best and brightest have gone leaving us at the mercy of digital night marauders.

Poor quality has led to poorer platforms. We now have very powerful APIs and other technical capabilities with sub-par resources to monitor and secure them. We are all dead men walking.

Banks and fintechs are sloppy with their Know Your Customer (KYC) and Customer Due Diligence (CDD). Or how do you explain Adedeji with N100k inflow over 24 months suddenly getting N10m and immediately moving that money out?

Super agents aren’t able to explain how sudden cash flies through some agents as cash and there are no ways to hold anyone accountable.

CBN is also not on top of these fraud issues. They don’t need someone to report themselves to know that all isn’t right with the system.

Enough of victim blaming and shaming.

How do we restore the trust that lines the financial system

We’ve already established that everyone has dropped the ball but irrespective of who’s to blame, this issue must be addressed urgently. If not, once the trust in the system is destroyed, the center wouldn’t hold. Fintechs and digital financial services is one great thing Nigeria does well. It shouldn’t die.

CBN and banks should lead a tougher chargeback regime, similar to what happens with cards, for interbank frauds. This will force every bank to take KYC and CDD seriously.

Any bank on the chain found not to have done proper fraud profiling for transactions should be held responsible for the amount that passed through them. Enough of end-customers holding the bag when everything goes south. Let’s hold banks accountable for a change.

CBN, Banks and NIBSS should make it easier for anyone to report fraud. The current process is broken and doesn’t help anyone. They need to collaborate with the Nigerian Communications Commision (NCC) to make fraud so expensive for fraudsters so they reconsider their career choice.

For instance, once implicated, a fraudster should be banned from all electronic transaction channels from 1 year to forever. Good luck to this individual.

The issue here is consequence management. When the authorities make the consequence for fraud expensive and damning, fraudsters will begin to borrow some sense.

Until then, welcome to the league of the onlookers. Because everyday is like Christmas for these fraudsters while the rest of us are wondering when this comic episode will end.

If CBN wants cashless, it should #maketransferfree

The Central Bank of Nigeria’s (CBN) directive on cashless is necessary and beneficial in the long run but success depends on CBN’s actions to support and secure the system.

The Central Bank of Nigeria’s (CBN) directive on cashless is a direction the country needs, which I support 100%. Some may argue that this impacts the poor and the bottom of the pyramid negatively – yes, it does, at first, but in the long run, this is significantly superior to cash and would benefit everyone.

But why would I support an approach many have termed poorly thought through and echoes a military approach that sets many ordinary Nigerians on edge? It’s because sometimes you cannot fling out the baby with the bath water.

Because of the impact on many Nigerians and the poorly received approach by the CBN, several Nigerians are pushing that CBN should suspend the new cashless policy. This is a poor thought, and it’s as flawed as asking Nigerians to stop making phone calls and start shouting to get the attention of their neighbors.

To make cashless successful and for everyone to reap the benefits and growth potential, sacrifices are expected of everyone. And we know that these sacrifices are not trivial.

Of course, the CBN is asking everyone to sacrifice a lot, but what are the CBN and the bankers giving in return?

This is where it gets sketchy and unfairly lopsided. It’s also where the success of cashless is in doubt. If the poor feel taken for a ride and disadvantaged, everyone will find a way to sabotage the cashless policy.

When you consider the CBN’s argument that this would curb kidnapping (a rich man’s problem) and vote buying (a poor man’s opportunity), the chance of success for CBN is severely curtailed.

Cashless would never curb kidnapping – if my loved one were kidnapped, I’m not sure I’m ready to lose them because I don’t want to pay the 5% extra charge on the cash ransom. A politician doesn’t care about the 10% on the N1b he will use to buy votes. The original N1b wasn’t his to start with.

After all, when the Naira fell badly to the USD, the poorer exchange rate was never a problem when politicians bought USD to get votes.

So what exactly can the CBN do? There are three immediate solutions.

CBN should make the electronic transfer free for everyone. But to block abuse, there should be a limit and a monthly cap. Why would this work? It’s simple – the poor, most affected by the cashless, and the elites (the CBN and bank executives), think about money and value differently. Time is expensive for the executives, so paying N50 for the transfer is nothing to them. But for the poor, every kobo counts. They cannot understand why they must pay N50 for a transfer when they can walk to the market and use cash without spending extra.

The CBN should go on a massive campaign to woo Nigerians and not talk down on them. Many Nigerians don’t trust the financial system. They think it’s rigged against them for the benefit of bankers. Many Nigerians are also scared of going to the banks because banks are formal and bankers look scary sometimes.

To make this work, the CBN should create relatable ads and public service announcements using influencers that can cut through the noise and let everyone know the CBN means good.

The CBN should also enforce liability shifts to the banks. Why would this work? Most Nigerians that would be forced to go cashless are digital neophytes, which means the bad actors will take advantage of them. The bankers are the ones that control digital payment services, and it’s their sole responsibility to make it safe and secure for all their customers. Maybe when bankers start paying for these frauds, they will put in more effort to keep everyone safer.

In conclusion, the new cashless policy by the CBN and bankers is a rare opportunity for the Nigerian financial ecosystem to grow and for financial inclusion to bring benefits to Nigerians. But without the bankers and CBN making transactions free (and cheaper) for Nigerians and taking other measures to assuage Nigerians about the benefits of this initiative, it would fail.

This chance is too good to be lost. Let CBN #maketransferfree.

10 Predictions for Digital Payments in 2022

In 2022, Nigeria’s fintech sector will see WhatsApp possibly entering payments, MTN’s PSB dominating, free transfers boosting financial inclusion, and open banking disrupting APIs. FX transactions may shift to P2P, NIN could replace BVN, lending heats up with big banks joining, and new unicorns emerging. Visa might buy Interswitch, and Mastercard could acquire Etranzact, reshaping Nigeria’s financial landscape.

It’s 5 years since I’ve been shilling my predictions, and here again, are my top 10 predictions for 2022. Although, if any of them comes through, I owe you a beer.

As always, even though nobody pays attention, these predictions are largely educated guesses being that I have an advantage of seeing a lot from the wobbly perch on which I sit. But then, my candid advice is to take them with a grain of salt.

Now let’s dive into what Oracle has predicted for the coming year.

#1 A global giant comes to play. I will pay you with WhatsApp

Stripe came in 2020 to buy Paystack but not to play. But in 2022, my blurry eyes see a global player coming to play big time. But then why would a global player come? The market is hot as hell; alternative payments methods such as virtual accounts have proven to be very successful; API players like OnePipe and Mono are doing very well and shipping data around like smugglers, and lastly, open banking would go live once the standards are approved by the CBN. There is simply no better time to be here. My bets are on WhatsApp to come back with payments within their chat app. WhatsApp isn’t a stranger to payments; they have started, albeit with limited success, in Brazil and India.

#2 MTN launches PSB. Only a few super agents are left standing. Top 5 banks on notice

I predicted that MTN would get its license and they did. Give me a round of applause! Karl, the CEO of MTN, is a ruthless executioner and following the spanking that banks gave him last year on USSD, he has more than enough incentives to do a good job. And he will; never keep Karl behind your back. MTN would drive its PSB so hard and super agents so amazingly, they would quickly suck the oxygen out of the market. The prediction here is that I expect a rapid decimation of the super agents when MTN’s PSB goes live. I’m super curious about who Karl would anoint as the CEO of the bank though; I smell some ex-orange colored EDs who know all the tricks of the traditional banks and where dead bodies can be buried.

Disclosure: I bought some MTN shares and I’m rooting for them.

#3 Transfers become free. Financial inclusion becomes a reality

I don’t know if this is a prediction or a wish list because even if it doesn’t want to come to pass by itself, I’m going to devote part of my energy to it in 2022 to make it a self-fulfilling prophecy. And the premise is simple – make transfers below a certain amount free for everyone and you have a good chance of bringing financial inclusion to every Nigerian. CBN did this for ATMs and it was a success (bankers hated it though) and they may be tempted to do it next year too. The last time the cost of transfer went down to N10, the market jumped like drops of water inside the hot oil.

#4 Open banking goes live. API players are shaken off the tree

CBN has been cooking this for so long it’s almost burning on the stove. Finally, the standards are approved, released, and banks are mandated to implement them in 10 days 😁. Now, open banking is significantly more comprehensive, faster, and safer than the APIs being sold by my friends. And because only licensed players would be allowed, the market may shake some old API providers out of the market the way mobile internet killed business centers (if you were born after I graduated, please ask your uncle).

Disclosure: I’m a Trustee at Open Banking Nigeria and deeply connected to the regulatory efforts to spin up open APIs in Nigeria.

#5 FX goes the crypto way. P2P FX transactions power investment apps. CBN is upset

CBN is like the financial Thor of Nigeria, its hammer can smash the densest head. It came after crypto earlier in the year, but they survived and went underground where no hammers can touch them. The hammer then came after FX jugglers; just ask what happened to abokifx.com. But we need FX or how do I pay my subscriptions or buy Tesla shares? As the need for FX has refused to go away, some players may borrow a leaf from the p2p play that saved crypto in Nigeria. Could that, in one move, be the end of CBN’s control of retail FX in Nigeria? While some investment apps may have gotten an injunction to prevent CBN from locking their accounts up, trust them to throw a party if p2p can save their business model.

#6 NIN dethrones BVN as the ID of choice. CBN’s fear about data comes true

CBN is super worried about how and what fintechs are doing with BVN; anyone with half a brain would be worried at how easy BVN data can be gotten and misused. So, they got NIBSS to clamp down on BVN; unfortunately, there are no better alternatives for fintechs. Well, NIN came along with fresher data and wider coverage. The only problem is NIN being government property means data security and privacy may be poor. Soon, a major breach happens and DSS is called to fish out fintech founders.

#7 Lending becomes hot. Bigger banks jump in. Bigger banks get shocked.

Nigeria has a N74 trillion credit gap which is flashing eyes at prospective lenders. Even though many lenders have taken bad advantage of borrowers so much that even regulators have to weigh in, the demand for consumer and SME credit continues to surge. At least 5 top 10 banks, being the jealous type, would jump in without looking, but with disastrous consequences. They will fail because their loans would be packed like corporate bank credits.

Disclosure: I’m deeper into lending tech than the Marianna trench. And Sterling (Spectra), Access (QuickBucks), and FCMB (Credit Direct) have been doing consumer credit at scale before my last child was born.

#8 Market goes super-hot. New unicorns are born. Old players die

2021 was a year of growth for the fintech market and the conditions for a hot 2022 have been laid down – #1 the API business model gets proven (Mono and OnePipe raised $19m between themselves); #2 CBN released tons of licenses for new payments providers; #3 virtual account became a prime payments method, and #4 the folks that raised cash must show investors growth. What do you think the torrid combination of this means for next year? The market becomes competitive like crazy; fintechs would use dollars as weapons to snap talents and do marketing; larger and ballsy fintechs may start doing their APIs directly, bypassing Mono and others. When the smoke clears, the battlefield would be full of dead bodies. But I see the new players being victorious and crowned as unicorns. And the older players? Any of them born before 2015 is likely to slink into oblivion.

#9 Visa buys Interswitch

I’m predicting this for the third year in a row; maybe if I say it enough it would happen. Why do I think so? It just makes sense for various reasons; Naira is at all-time cheap and Interswitch fundamentals is anchored on Naira which makes them cheaper and because they are a grown-ass fintech, they can’t enjoy the 20x EBITDA multiple that smaller and younger fintechs use for their valuation. But then, they are a behemoth, they control 90%+ of ISO card traffic in Nigeria. And sweet old Ms. Visa owns 20% of them to start with. Meanwhile, Mastercard continues to kick Visa’s teeth with their Nigerian market dominance and even the previously smacked Verve is having a resurgence. Therefore, it makes sense for Visa to buy the Switch and just make Verve become Verve by Visa (Ve by Vi, how does that even sound?) But the kicker? Some of the long-term investors are itching to return funds to their limited partners so they would be more than happy to sell to Visa and bid goodbye.

#10 Mastercard buys Etranzact

This prediction is tied to number 9 like the way my daughters are tied to my surname. Once Visa buys the Switch, Mastercard would have to find their way out of there faster than a cat would slink off a hot plate. Of the bunch of payments processors hanging around Nigeria, only Etranzact remains a viable option for Mastercard as they have their servers in every place that’s called a bank. Most of the institutional owners would gladly receive a 3x premium.

Wondering what happened the previous years and the predictions? Read about my takes for 2018, 2019, 2020, and 2021.

Disclosure: I own some bits of Etranzact but if the multiple isn’t at least 5x, nobody should talk to me.