Payments - Page 9 of 13 - Adedeji Olowe

Instant Recharge Tracker

Only an idiot would trust a banker. Rumor has it that while the cockroach would be the last to exist after Armageddon, the bankers would be the second to the last.

The smell of easy money, when the economy is tight and Naira is testing out a new parachute, is hard to resist. I’m not a prophet but I predicted this some months ago that by year end, only a few banks won’t offer xyzAmount# service.
Instant airtime recharge is the new kid on the block for banks and it’s simply amazing for the average Joe on the street. If your nail is cropped short like mine or bedeviled with fungi like my cousin’s, then not having to scratch a recharge card anymore is a dream come through.

So, with mobile money short codes deployed to more salubrious usage, I can at least give a rundown of what the money men are up to.

Bank	Code	Partner
Access Bank	901Amount#	Clickatell
Citibank	Corporate customers. No interest, I guess
Diamond Bank	Probably in the works
Ecobank	326Amount#	Clickatell
Fidelity Bank	770Amount#	InterSwitch
First Bank of Nigeria	894Amount#	InterSwitch
First City Monument Bank	3892141Amount# (Seriously?)
FSDH Merchant Bank	Probably not interested
Guaranty Trust Bank	773Amount#	Clickatell
Heritage Bank	322030*Amount#	InterSwitch
Keystone Bank	322082*Amount#	InterSwitch
Rand Merchant Bank	Merchant bank – probably no interest
Skye Bank
Stanbic IBTC Bank	909Amount#	Clickatell
Standard Chartered Bank	Ehm..
Sterling Bank	822Amount#	Clickatell
Union Bank	Definitely something cooking
United Bank for Africa	Definitely something cooking
Unity Bank	322215*Amount#	InterSwitch
Wema Bank	322035*Amount#	InterSwitch
Zenith Bank	966Amount#	Cyberspace

Rumor has it that the money is good, and I know at least 2 banks doing over N500M a month. In fact, one of them has strolled beyond N1B in airtime sales a month. Typical margin is a neighborhood of 5%+/-.

Feedback has been positive but the major sand in the Garri of this has been network performance – customer getting debited but airtime doing what Buhari is doing with ministerial nominations. MTN, being the largest telco, probably didn’t see this coming and so every time their service has a problem, which is like every minute, something goes wrong and customers reach for their machetes. Another annoying fact is you need to have a minimum of N12 to be able to do airtime on MTN although some banks are offsetting that money for customers.

What’s killing financial inclusion in Nigeria?

Financial inclusion in Nigeria falls short because products lack accessibility and affordability, ignoring basic needs like free transactions. Understanding the needs of the poor is key to an effective design.

No scholar worth his salt would denigrate his study in the first line, or on any other line for that matter. However, listen carefully, take what I’m going to say below with a pinch of salt as it’s based on armchair projections.

But then who cares?

We are quite a lot in Nigeria, or so says the official and derivative stats. I really don’t buy into the numbers but then nobody gives two flying horse legs about my opinions. With about 180 million hungry souls crammed within the national border, only about 30 million accounts are there in the 20+ odd banks.

Considering that nobody in Nigeria is faithful to anything, especially to their banks, I know finding unique bank customers could slash the numbers down to about 20M. Just a hunch, don’t quote this for your PhD!

The Central Bank of Nigeria, other NGOs and do-good money bags have tried all they could with financial inclusion but it ain’t just hitting that sweet spot. Banks were corralled into the deal, and we came up with Prepaid Cards and Mobile Wallets. Both had as much success as the Zepellin.

On a quiet Sunday morning, after the rain has done about 3 rounds, much more than middle-aged men can cope with these days, I thought about what could have made all the efforts, the bankers, the CBN, flounder like a pricked balloon.

It was just simple. Financial inclusion designed by rich bankers and their friends in Brioni suits just don’t work.

Why? Because financial inclusion products should be accessible and affordable. Unfortunately, they are not.

This is best underscored by a recent conversation I had with one of my banker friends designing a saving product where artisans and others can pay N100 a day to save about N1,000 using their phones. I was like, what the F? I wouldn’t even do that on a regular account!

Which brings us to why the fancy financial inclusion schemes never work. Most were designed with absolutely no idea of what poor people want. But then ain’t difficult to find out, they want basic and affordable financial products.

They want free cash in/cash out.

They want free balance inquiry.

They want free bill payments.

They really don’t give two rats’ legs about cost of transaction.

Oh my, they don’t keep money in balances because like we all know, you can only save when you can afford to. When you live off less than $1 a day, which 70% of us are anyway (who did the enumeration?) you can’t afford to save. When you earn less than N50K a month and you have mouths hungrier than young birds to feed, you can’t save.

So dear banker, if the poor can’t save, there isn’t going to be any float.

If you don’t get any of these above, you can’t design products for poor people, bottom of the pyramid or financial inclusion.

This isn’t Davos, so get off your high horse dude!

Is your bank there while you are on the move?

We are always on the move, not because we don’t have anything to do but that’s the reality of our lives in Lagos. We are usually busy, stuck in traffic and when our pretty backsides are stuck in traffic for hours, we end up loving our fondleslabs.

So while in that horrendous traffic, we want to get some things done such as reading the latest gist on Linda Ikeji or transferring money to a pesky cousin. Banking is what we all take seriously because that’s where your liquid livelihood is probably warehoused. We just wanna be able to hit our bank anytime and every time, any day and every day.

If banks understand this (they are supposed to be smart guys, ehn?) then I suppose they should have mobile first strategy. Ok, that’s consultants’ speak (heaven knows I hate that bunch!). The taste of the pudding is in the eating (whosoever came up with that proverb is a wobia!) so I expect that banks should have websites tuned for mobile phones. After all if I need to pay Silifa or find out some random thing about my bank and I’m stuck on Third Mainland Bridge traffic just around Oworo, it’s my unfortunate phone, battery and data permitting, that I will turn to.

So on an unfortunate Saturday while waiting for my friend to come around, I decided to visit banks’ websites with my phone and see how they scale up.
Here we go people:

Bank	Mobile Friendly	Secure Website
Access Bank	Yes	Yes
Citibank	Yes	No
Diamond Bank (*Acquired by Access Bank)	Yes	No
Ecobank Nigeria	No	No
Fidelity Bank Plc	Yes	Yes
First Bank of Nigeria	Yes	No
First City Monument Bank	No	Yes
Guaranty Trust Bank	Yes	No
Heritage Bank Limited	Yes	No
Keystone Bank Limited	Yes	No
Skye Bank	No	Yes
Stanbic IBTC Bank	Yes	No
Standard Chartered Bank	Yes	Yes
Sterling Bank	Yes	No
Union Bank of Nigeria	Yes	No
United Bank for Africa	No	No
Unity Bank Plc	Yes	No
Wema Bank	Yes	No
Zenith Bank	Yes	Yes

How did I test?

Used Samsung S5
Searched for the bank name and clicked on the link
Faffing about on April 4, 2015

What’s the secure website about?
It is increasingly common for websites to now default to using just HTTPS for all traffic. It is seen as a sign of understanding the times. However it doesn’t mean that internet banking traffic has been compromised (all banks use HTTPS for their internet banking).

Instant Recharge: The New Kid on the Block

Something interesting is happening in Nigeria but it’s so subtle you may not even notice it. Ma’am, I tore up the recharge voucher!

Ok, if your bank doesn’t allow you to buy airtime instantly from your phone maybe time you got another bank. Nope, seriously, I’m not doing a Diamond Bank skit.

I just finished reading “The best interface is no interface” and the first stuff that came to my mind was, we just did this s**t in Lagos! You can now top-up your phone instantly without scratching a single card.

A quick backgrounder. Some years ago, CBN got tired of banks just looking only for rich dudes and newly minted yahoo boys and so took them on a Cashless drive. Some bits worked and some failed. Mobile money was one of the failed bits. Damn, people just don’t like mobile money wallets. I didn’t like them either. They were islands, expensive to operate and just generally annoying. Meanwhile at the end of the experiments where bankers set fires to a lot of money, out of the ashes rose USSD codes.

Not knowing what to do with the damn thing, banks started slapping in some bits of code that allows you to buy airtime when you dialed say * 123 * amount #. It simply works! GTBank was the first to start, then Fidelity, then Zenith and before you could say Jack Robinson, other banks fell in. Today, Wema, First Bank and Sterling have joined the fray and before mid-year, without divulging confidential information, more than 10 banks will launch the service. I can predict that come January 1 next year, the only banks that won’t be offering this service would be headquartered in Sambisa Forest.

There are implications though and as usual it would be a double edge sword depending on which side of the damn sword you are on.

Let’s talk about the positives.
Customers would have an amazing time buying airtime. If you’ve experienced this service, you ain’t gonna touch a recharge card again. Neither would you login to your miserable Internet banking again.

Banks, I just love bankers! They now earn new revenue stream of between 4% to 6% depending on how they bargain with providers. Trust me, there would be bloodbath next year when contracts are renewed.

New services would ride on this. One day someone would figure out transferring funds instantly can also work on USSD. Same as cashless ATM withdrawal. Customer service may even evolve on it: you may be able to update your address, phone, email, etc. without visiting your bank.

Finally, even if we roasted our Mobile Money ideas, our simple but elegant USSD has worked. Let someone clap for CBN!

But the bad is scarier!
Recharge sellers are facing extinction. Everyone has phones and almost everyone has accounts. Once the banks have corralled their customers into this scheme, there goes the gravy train. Oops, obliteration isn’t awaiting only the recharge sellers but also the super dealers. Damn, I feel sorry for the lot.

Card networks (I didn’t mention names!) will feel the pinch. You want to know why? Because they make money off transactions but once banks figure out how to do same stuff over USSD without involving the card networks, say goodbye to money baby! After all, 95% of all transactions in Nigeria are local. In fact I feel the number is sexed up, it may be closer to 99% but then who cares?

NCC and CBN may bring further regulations into this. Regulations help and hurt at same time. Depends on where you find yourself, just like that damned swinging sword up some paragraphs above. At least I know of one standing regulation that says Banks cannot sell recharge directly and must go through a provider. Should that change, then…complete the sentence.

The market today is dominated by two major players, but I won’t mention names because I have friends there. If NCC tweaks the regulations both face the risk of disappearing as the telcos will simply talk to the banks and cut vending companies off at the knees. I’m sure the telcos are already noticing things.
In all, there are more gainers (customers and banks; about 30M of them lot) than losers (recharge sellers, super dealers, card networks, vending providers) so let the game starts. I’m up for innovation, I’m up for liberation and I’m up for a good sleep after a long travel.

See what a boring flight can make you type out. Pathetic.

Electronic Payment Gets Interesting

Somewhere in the news, PayPal finally admitted Nigeria into its elite club as you can now use your Naija issued cards to register. But come to think of it, was it because of the pressure? Or because Nigeria is less fraudulent? Probably not. My experience with PayPal has been shitty at best so I’m sure it wasn’t done for some altruistic reasons.

My take? They probably started seeing numbers showing that Nigerians not only travel too much (Lagos – London is one of the most lucrative routes in the world and Emirates flies 3 times into Nigeria on any day. Kenya Airways practically hovers over Lagos) but also spend just too much, including what they haven’t earned yet.

In my previous life hawking cards like omo alata all over Africa I witnessed the gradual build out of card transactions on Amazon, Alibaba, Asos, etc. and any half brained nitwit can imagine where the trajectory is heading. Now the dudes in PayPal are not dumb (not sure ignoring Nigeria before was a smart move) and are jumping into the fray.

Or could it be connected to the fact that Amazon has launched a competing payment service that works better (Amazon is simply amazing) and has over a hundred million users to start with?

In other news, I could see the gradual loss of influence on card business in Nigeria. Get me right, the card business is booming but the other non-card payment sector is growing at a fast greater clip. POS is finally looking like a decent investment. ATMs have become invisible – you just expect them to be there. Internet banking is still the black sheep of the family, it hardly works and you just tolerate it like a bad mother-in-law but this one isn’t going to keel over yet. I would give a pass mark to Cashless Nigeria – it hasn’t been easy but I think we will finally get there. In 5 years time, mark my word, we electronic payment will own this town.

I don’t know what issues Nigeria has with Mobile Money – it isn’t just happening. I believe that sweating to replicate what happened in Kenya is just a frustrating cul de sac. Of recent I have been having some beautiful thoughts on what I feel we could do to make the Mobile Money corpse walk (I’m not morbid, Hardley Chase said that!).

Enough of the ranting for today.