I didn't do too bad predicting digital payments for 2018

Last year, I wrote about 10 predictions for digital payments in 2018 (better to read this first). Looking back, I can assure you, my career as a seer hasn’t been as illustrious as I planned it to be. So how bad am I? Let’s take a look at how I scored myself.

Alat gets a (bigger) challenger (Score = 1)
Every bank looked at Alat and moved on. Not a single initiative came out to challenge the dominant digital bank which continues to garner critical acclaims world-wide. Likes of dot.bank and Wallet.ng are snipping at its heels though.

PSD2 instigates Open Banking (Score = 5)
Open Banking is no longer a swear word in the UK, and it has been primarily replaced by enthusiasm. Quite some countries are now on the open API bandwagon. Bahrain is a new country that published specific guidelines. Despite the excitement, the fire is like a table-warmer and not a bonfire.

Maturity comes to Fintech (Score = 8)
The Nigerian fintech ecosystem has grown significantly over the last 12 months. The growth is best represented by about 5 international fintech conferences done in Lagos to showcase opportunities. Additionally, some odd 5 Nigerian fintechs firms got into YC over the year. Likes of Paystack attracted top international investors like Stripe, Visa, and Tencent. Mines.io and Cellulant raised a ton of cash. What else can we ask for?

Smaller Fintechs instigates price war (Score = 0)
No price war happened. Prices are same. Everyone is cranky.

Bitcoins bubble explodes, killing many (Score = 10)
Last year, BTC was dancing around $20K with investors (real and Babalawos) predicting $100K per coin. Of course, the bubble made a loud splat with values dropping 80% over the last 1 year. Many of my friends who were coin fanatics then have lost their voices. Can’t gloat but don’t equate greed with tech

International players come to lunch (Score = 7)
Opera made a serious inroad into Nigeria with the launch of Opera news that now has 28m active users. The company will also start to lend to all my cousins soon.  Stripe and Tencent are also putting a tiny toe via Paystack. Please come! We will take care of you.

Android supports pay with Paga (Score = 0)
Nothing happened. Sorry, come back later.

Fraudsters get a beating (Score = 0)
Nothing changed. Stop Fraud Africa floundered and never launched. People are still getting scalped day-in-day-out.

Retail digital lending become prevalent (Score = 7)
Digital lending is on a tear with likes of Mines.io getting $13m to play. But with just 0.77% of all loans going to individuals, the journey is still very far!

AI to the customer service’ rescue (Score = 0)
You would have thought that the opening of Whatsapp APIs for banking would bring decent AIs to help customers? Fat chance. Practically every implementation has been sub-par. Just someone copying and pasting USSD menu into a chat. Disappointing.

I scored a measly 38 out of 100; which is even less impressive when you considered that I marked myself. Next year, take my predictions with a pinch of salt, but then 38% accuracy about the future is better than most prophets can handle. Maybe I am not so bad after all.

Read the original predictions here: https://dejiolowe.com/2017/12/10-predictions-for-digital-payments-in-2018/ and subscribe to my blog to get other posts whenever I can summon enough energy to write them.

The bold will always boss the smart around

Smart but broken and unfulfilled—a common tale. Smart people working for less smart bosses, dreaming of boldness or fleeing for greener pastures. Sometimes being smart just isn’t enough.

Recently, I was enduring a never-ending stream of ranting from one of my mentees (why don’t I ever get paid for this?) about how he gives solid business propositions, but the founder and chief executive of his company doesn’t take his advice. But then when the so call CEO made a mess, my mentee had to do the cleanup.

Of course, my mentee is super smart. First class engineering from a top Nigerian school with IQ as many as floors in the Shanghai Tower. But then, here is a broken man who obviously deserves more and yet isn’t fulfilled. He works in a company that isn’t doing too well because it’s probably poorly managed by the CEO who tells him that if he was that good, he should have started something better.

Does this scene resonate with you? Probably yes.

His story forced me to look around, assess my own life and that of many friends, families, mentees, and random agberos around me. Why do apparently smart people get stalled in poor careers and [some] dumb people become successful? Was it luck? Or business smarts?

Of course, luck plays a role, but statistically, luck should smile on as many smart people as average jones. But empirically, I see most intelligent people working for those less smart. Meanwhile, you would expect the most successful people to be smart since they can use their intelligence to exploit opportunities more but alas, probably around me, this ain’t the case.

Sometimes we talk about hard work. Yes, working hard pays and working smarter pays better. But of what benefit is that if you are working smartly for your dumb bosses and you don’t get any of the upsides and only all the downsides? Most of the hardest working smart people I know work for less-smart bosses, and they rant about it so much my ears bleed. I need to see an ENT.

One thing that seems to be consistent with many founders is that they are bold. Successful founders come in all intellectual shapes and sizes and in various forms of dedication to the hours. But what you won’t take from them is their ability to charge headlong into whatever they believe. They are bold enough to make the leap, not sometimes of faith but many times out of the sheer ballsiness of it. The bold veer towards the edge of insanity to the right, conmanship to the left, inability to access limits to the top, and sheer audacity to the bottom.

I have seen guys walk up and promise delivery of certain products and services without a shred of where and how they would do it, sign the contract and then scamper around to deliver. Sometimes they fail, but when they succeed, maga pays!

And what do the bold do? They employ the smart “you” and “me” to make their dreams come through.

We ain’t all born bold – either because we lost our balls somewhere or we never even came with them. Therefore, we compensate by reading, become thought leaders (whatever that means), get multiple degrees and useless certifications. And when things get really awry, we skip town like Andrew to the US as illegal aliens or to Canada to freeze dry our brains in the name of greener (and extremely cold) pastures.

By the way, it’s not a crime not to be bold; if you don’t have it, you can’t do anything about it. Or maybe you can. I once heard that pretending to be brave and being bold are the same.

But to my many friends and mentees, if you think you are smarter than your boss, just suck it up and spare me the rant. Either you grow your cojones or zip your lips.

Credit bureaus are holding back digital lending in Nigeria

Accessing credit bureau data in Nigeria is tough for digital lenders due to high costs, poor API integration, and lack of standardized information. Here are some initiatives that could enhance credit bureau services, boosting trust and facilitating greater credit flow.

I was at a recent event organized for alternative lenders, mostly digital lenders serving individuals and SMEs. The engagements were eye-opening even though I was already conversant with most of the issues raised.
Nevertheless, one of the nagging problems kept nagging me after I left that day.

Everyone was complaining about how difficult it was to get access to credit bureau data. Yes, they exist in Nigeria, and about 3 of them (FirstCentral, CRC, and CreditRegistry) have been licensed for operations by the Central Bank of Nigeria. They even have an association, Credit Bureau Association of Nigeria (proper parapo).

I wouldn’t jump the gun to blame the credit bureaus, but the complaints that kept coming from different actors (banks, MFBs, individuals, etc.) were so many they cannot be without some attributions. There ain’t no smoke without fire.

Here are some of the critical issues that lenders raised.

Cost

The cost charged per record by the credit bureau is so high as to make it useless except for the high ticket transactions. Meanwhile, digital lenders lend from the low thousands, and when you aren’t giving credit to everyone you check, the cost becomes a runaway train.

On the flip side, credit bureaus get this data from banks and lenders for free then turn around and sell at an exorbitant price per check. This doesn’t make sense to me or anyone else for that matter.

If digital retail lending will ever explode in Nigeria, the cost of checking credit bureaus has to be so low that it is marginal. Probably in the region of N20 to N50 per call. Do that for 10 million calls a month, and you have a N6B business a year.

APIs

Without APIs, there is no credit bureau intermediation in digital lending. APIs must be simple to integrate with, extremely stable, and always available. In a modern digital finance world, APIs should take a few seconds and not days to apply for. There should be a sandbox to test without having to contact anyone.

The APIs currently provided by credit bureaus are so poorly implemented – they are buggy, slow, and takes forever to integrate. You can imagine these credit bureau struggling with modern technology. It is interesting to note that none of the credit bureaus has any reference to APIs on its website; so if you want to see developer documentation, you are on your own!

Information

Information should be simple. In the US and other countries, a combination of names and other demographic info are used. In Nigeria, there should be a standard use for BVN. It is unambiguous; it’s simple, it’s fast

Reduced cost for contributors

Credit bureaus should give credit of say, five free checks for every record of the contribution made by lenders. It offers incentives for lenders to contribute information. The more they update, the cheaper their operations are. It’s a win-win for everyone.

Partnership with fintechs

It’s possible that these credit bureaus have dinosaur backends and find it difficult to serve the fast-paced digital lending world. They could partner with fintechs (hungry for revenue) to build smart API front ends and developer portals which alternative and digital lenders can connect with. Revenue share is a way to make everyone happy. Any takers?

What happens when these are done

Lenders get to trust the system, and it becomes self-reinforcing. The better the system is, the higher the chances of blocking bad actors. When bad actors are getting barred, anyone (like my cousins) with a propensity to go rogue becomes serious because they can see consequences. Then default rates go down which makes interest rates go down as well. More credit flows. Maybe Nigeria can be great again.

Fun facts

Of the three credit bureaus in Nigeria, two are led by ladies. Amazing Amazons

Finding data in Africa shouldn't be a problem. Let's solve it

Accessing reliable data in Africa is tough, leading to reliance on outdated or foreign sources. This hampers business decisions. Efforts to compile and share accessible data are crucial, especially in sectors like Nigerian payments.

Data is the fuel of decision making, anywhere and everywhere; and Africa is not excluded. Regrettably, getting simple information to make intelligent decisions in Africa is so hard you are better off just reading the stars. No wonder most African businesses are based on “divine inspirations.”

The African economy is vast with different sectoral opportunities. Yet, the lord helps you finding accessible information to help you bring your nice ideas to the market. In the end, unfortunately, most of us depend on foreign data or information to make our business decisions. Some of these data are so old the web pages have gray hairs.

Many of my friends (I have so many, want some?) complain about the paucity of data and love to compare how easy it is to get data about other countries. But hey, angels didn’t create the data for them, they did. What we lack is a deliberate attempt to do research, surface insights and share data with the world, for free.

The exciting thing is, if you push data out, you end up becoming a reference or an authority even if some or all of what you published is rubbish. Remember, never believe everything you see on the internet.

The irony is that some data exist but in forms that are not discoverable. For example, I was recently looking for a list of approved mobile money operators in Nigeria. While I know it must be somewhere, hiding and eating popcorn on the CBN website, it wasn’t coming up on Google search.

And when you see some of these data, they are also not easy to understand forms. Data from National Bureau of Statistics (a rich source of good quality data) come in formats so ugly it wouldn’t find a girlfriend if it were a man.
My specialties have always been technology, banking, and payments, so, over the next few weeks, time permitting, I will be prettifying some of the easy information about Nigerian payments space which can then be found by anyone sleuthing around and hopefully Google and Bing can easily surface them as well.

Mobile Money in Nigeria: Operators, Opportunities and Trends

Recently I started seeing a spike in the number of inquiries made by friends, fintechs, and random other people about Mobile Money in Nigeria. And it’s not because they are suddenly having altruistic ideas for financial inclusion. Something must be cooking!

Let’s get the basics right
Mobile money is a form of banking where your account number is your mobile number. It’s as simple as that. Any other definition is an oversabi.
After the successful debut of mPesa in Kenya, many countries tried to launch their copycat mobile money system.

Unfortunately, it has been a mostly miserable failure. Some stats said less than 3% of all mobile money implementation has been successful. In Nigeria, the number is worse: 0%.

At the start of the mobile money madness, CBN gave out 23 licenses, 10 of which were by banks.

After a flurry of activities, things chilled. Banks subsequently developed acute amnesia about their licenses went back to their bread and butter: Commercial Banking.

Why and how mobile money failed will always be contentious. I have written about it, others have different opinions. The one thing we ain’t arguing about though is the fact that mobile money failed to hit the sweet spot.

New interests in Mobile Money
The emergence of fintechs has thrown open new possibilities of what can be done with moribund mobile money licenses. Most fintechs within the payment space are having a lorry load of challenges connecting to banks.
For example, a common request would be funding of payment transactions from bank accounts for which banks haven’t provided any simple APIs to work with. Those doing savings and personal financial management want to keep money in a legal way and also allow topping off investments from bank accounts. That is another problem.

Just like the way banks repurposed USSD codes meant for mobile money in 2014, fintechs are circling around banks to see how mobile money can be repurposed for better things.
 
Now, the list
Getting the actual list of licensed mobile money operators in Nigeria should be simple, right? Nope! You can’t even find it on CBN website if you search for it but here’s the direct link.
So, I put together the list of those I know to aid anyone.

OperatorOwnerWebsite
*909# Mobile MoneyStanbic IBTC Plchttp://www.stanbicibtc.com/
Access mobile moneyAccess Bank Plchttps://www.accessbankplc.com/
TinggCellulant Limitedhttps://tingg.com.ng/
Diamond mobileDiamond Bank Plchttp://www.diamondbank.com/
EazyMoneyZenith Bankhttp://www.eazymoney.com.ng
Ecobank Mobile MoneyEcobankhttps://ecobank.com/
FETSFunds and Electronics Transfer Solution Limitedhttp://www.mywallet.fets.com.ng
Fidelity Mobile MoneyFidelity Bank Plchttps://www.fidelitybank.ng
FirstMonieFirst Bank Nigeria Plchttp://www.firstbankplc.com/
Fortis Mobile MoneyFortis MFBhttp://www.fortismobilemoney.com/
GTMobileMoneyGTBank Plchttps://www.gtbank.com/
Mimo
*Part of Vanso. Bought over by Interswitch in 2016		Interswitch Limited (formerly mKudi, a subsidiary of Vanso)https://www.mimo.com.ng/
Monitize
*Not operational. Site redirects to Fiserv		Monitizehttp://monitise.com/nigeria
NowNowContec Global Infotech Limitedhttp://nownow.ng/
PagaPagaTech Limitedhttp://www.pagatech.com/
PayAttitudeUnified Payments Services Limitedhttps://payattitude.com/
PIDO
*Bought by Opera from Telnet in 2017		Opera Softwarehttp://www.paycom-ng.com/
PocketMonieTranzact Plchttp://www.pocketmoni.com/
QikQik
*Inactive		Eartholeum Networks Limitedhttp://www.eartholeum.com
ReadyCashParkway Projects Limitedhttp://www.readycash.com.ng/
Sterling mobile moneySterling Bank Plchttps://www.sterlingbankng.com/
Teasy MobileTeasy Mobile Limitedhttp://teasymobile.com
U-Mo
*Shut down. License allegedly returned to CBN		Afripay Limited/United Bank for Africa Plchttp://www.umo.net/
Virtual Terminal NetworkVTNetwork Limitedhttps://www.virtualterminalnetwork.com/
Wari
*Senegalese company. Acquired license in 2016		Warihttps://www.wari.com/
Zoto
*Zoto app shut down		Hedonmarks Management Serviceshttps://zoto.com.ng

 
Other documents
The following are also critical documents for mobile money in Nigeria, especially from the regulatory perspective: