Adedeji Olowe

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.