Expert advocates migration from mobilemoney to digital financial services

Emmanuel Okoegwale, Principal Associate, Mobilemoney Africa, has advocated that the Central Bank of Nigeria (CBN) and licensed mobile money operators in the country to migrate from mobile money services delivery to digital financial services.

Okoegwale said that “mobile money, agency banking, super agency, e-banking, wallet services, all these can be combined into a single digital financial services licensing and services so that Nigeria can actually benefit from the deploying distributed banking model that can add to the bottom line.

“Banks struggle to understand financial inclusion which is really a regulators agenda and provisioning no-frills accounts comes at a cost to financial services providers hence financial inclusion struggle, but in countries where digital financial inclusion was well defined within the digital ecosystem space, financial inclusion is a natural outcome like in Tanzania which achieve its financial inclusion targets ahead of projected time.”

The Financial expert who was reacting to a recent International Data Corporation (IDC) report noted that: ‘with around three-quarters of global remittances being sent to developing nations, cross-border remittances will become the next phase of evolution for mobile money ecosystems in Africa, where the remittance market continues to grow from strength to strength.

IDC, while referencing its ‘Cross-Border Remittances: The Next Mobile Money Frontier in Africa’ report, said that the continent’s mobile money ecosystem is experiencing growth across several fronts, including micro-loan facilities and C2B payments, among others.

IDC believes that this will be the next battleground since the number of mobile money wallets has now surpassed the number of bank accounts in several African countries and many more countries are expected to follow this trend.

IDC believes that as such, it’s now make-or-break time for money transfer players in some of the continent’s key regions, a scenario not dissimilar to when mobile money was first introduced. And it is the cross-border remittances space, long dominated by traditional financial players such as banks and money transfer organisations (MTOs).

Okoegwale therefore seeks for a review of regulatory regime in Nigeria if she must benefit from the boost, like allowing for universal participation from all prudentially managed financial services providers to provide all licensed services such mobile banking, mobile money, agency banking among others without subjecting them to extensive pilot projects.

“Banks already provide mobile banking and why the need to go through licensing for mobilemoney? There is need to harmonize the frameworks into a single digital financial services framework because of convergence and also allow for wider participation outside of financial services ecosystem because two of the major requirements for success in this space ( Application access networks and retail distribution networks ) are owned by players outside of the financial services ecosystem,”Okoegwale said.

According to report by Nigeria Inter-Bank Settlement System (NIBSS), the value of transactions across the various mobile money (MM) schemes in the country recorded 90 percent drop in August 2016 as the company that provide the handshake among operators in the space.

The value of transactions across scheme in the month of July was N19.5billion, while in August it dropped to N10billion representing over 90 percent drop.

However, this drop has been attributed to current economic situation in the country which has reduced the purchasing power of Nigerians to use mobile money.