Jed Eromosele
“Where do we find the next 50 million clients?”
Wondering who’s asking this question? Well, every member of Nigeria’s Payment Ecosystem. From old banks with roots dating back to before independence to newer fintechs springing up with desires to make a difference and some money.
And really, they have good reasons to ask these questions. Payment systems around the world are evolving fast and the industry players in Nigeria can tell that they need to step up their game. Everyone needs to innovate, get better and provide improved and more conducive payment ecosystems and platforms.
They need to devise and pioneer payment methods that will appeal to those that will be the bulk of their next set of clients. The next 50 million if you will. People who want things to be faster, easier, and better than the generation before them.
Why the next 50 million and not their current client base?
Because they want and need to grow. A quick Google search would tell you that Nigeria’s median age is 18.1 years. And that means there are a lot more people under that average than above it. These are who all the players are trying to target and here’s why.
As payment systems and services evolve around the world, so do those that use them. And while the banks have to try their best to provide quality services to those that bank with them, they also need to keep looking forward.
They need to start thinking of how to corner the next market. How to build the next line of loyal customers that will keep them standing strong and in business. This need for growth. This need for sustainable growth is one of the things that drives evolution.
And these evolutions are the very thing that they believe will help them corner their share of Nigeria’s very large and viable market.
But what is this next evolutionary step in payments? Well, judging from the quality of speeches and discussions held in this year’s Digital PayExpo 2023, that next evolutionary step just might be “Contactless Payment”.
The Digital Payment Expo 2023 was an eye-opening experience. While I spent time slowly freezing inside the hall over the two days, I got to listen to multiple industry leaders and key players speak. And they all talked about the same things, what they believed would be the next evolution of digital payment here in Africa.
Guided by the Expo’s theme, “The Future is Contactless” These distinguished individuals got a chance to talk about contactless payment. They discussed its positives, its negatives and why they believed that it was a necessary next step in the evolution of Nigeria’s payment system.
And here’s the thing. You see, contactless payment isn’t new technology by any means. It’s been around for years and has seen growing adoption rates around the world since the Great Lockdown of ’20.
But it’s not just about how new the innovation is. It never is. It’s about its use cases and the growth that it can bring to Nigeria. Especially if it is adopted successfully. These use cases hold in them a chance to change the overall quality of life of the average Nigerian.
Logically speaking, the ability to pay without having to engage in physical contact, and the ability to pay by simply waving a card or device in front of a scanner sounds like an amazing evolution in Nigerian payments. It would eliminate the need for a lot of things, including long queues and forced contact.
But here’s what makes it more attractive: As it stands today, the average Nigerian has no alternative to cash. You either have cash or you have to whip out your debit card and type in your pin when you have a transaction. All well and good, yes? Well here’s the issue.
A lot of times whipping out your debit card is an entirely different problem on its own. Not because of scammers or thieves. But simply because almost nothing seems to stop your transaction from not going through.
You’ve probably had an experience like that. You typed in your pin, clicked confirm, watched the wait screen roll, and heard your phone buzz with a debit alert. Then the machine would print and you’d watch the holder’s face contour as they solemnly informed you that “your transaction was declined sorry”
Then you’d curse and groan as they informed you that they “can’t do anything” and that you should “please and go to your bank if it isn’t reversed in 24 hours”.
See?
We’ve all been there at some point or the other. And that’s why Nigeria has no alternative to cash. Not because there aren’t other ways to handle transactions. But because there’s no other way with a 100 per cent success rate every single time.
And that’s the number one problem with the Nigerian payment ecosystem today. And that’s why everyone’s eyes are on contactless payment. Because if they can build a seamless way to conduct basic transactions without needing a pin and in a way that’s fast, easy, and effective every single time you try it. Or even just most of the time you try it. They can corner their share of the next 50 million clients while still improving life for everyone else.
But making that world a reality will take more than just talk and feasibility studies. To make that world a reality, banks, payment service providers, and every other player in the industry need to put their money where their mouth is.
To bring the evolutions that will change Nigeria’s entire payment landscape out of the drawing board and into life, something drastic needs to happen. They need to put aside their differences and find ways to work together.
Simply put, each and every one of the players in the industry need to forget about the competition.
Or well at least forget about it in the conventional sense because, at the end of the day, competition is still essential. In essence, players need to stop thinking they can handle every step of the payment system alone. Because in reality, they can’t. And a lot of times, their trying leads to the sort of errors and issues that plague the payment system today.
And so instead of simply trying to compete, they need to focus on collaborating competitively. Because together, they stand to achieve a lot more than they would on their own.
In the words of one of the many distinguished speakers. “Collaboration is the new Competition”.
By collaborating, these payment service providers can focus on just one segment of the entire ecosystem. Handing them a way to stop making sure everything they’ve built works and instead channel that time and labour into creating and curating an Omnichannel experience for the next 50 million clients to enjoy.
When collaboration becomes a competition, it’s no longer about who built their entire payment system from the ground up or how long they spent doing it. Instead, it’s about who better leveraged all the other players willing to collaborate and managed to provide a more holistic and customer-centric experience for their clients and target audience to enjoy.
The next 50 million clients won’t care too much about how long a bank or provider has been around. They won’t ask how many years of experience their CEOs have or how long they’ve been working on their payment systems.
All the next 50 million will care about is how fast, easy, and safe a payment system is. How much time it takes off their hands, how effective and efficient it is and lets them be.
And frankly, that’s what everyone should care about.
Banks, Payment Services Providers, and everyone else in the industry are beginning to see that at the end of the day, the experience is everything. And the evolution into contactless payments is in part being driven by the consumer’s constant search for a better experience.
Faster ways to pay, easier ways to sort out transactions, safer ways to do business. The search for the ultimate consumer experience has brought the Nigerian payment sector to the realm of contactless payment. And to successfully turn that dream into reality. Partnerships must be made.
These partnerships and open collaborations will create a way for anyone and everyone to innovate. The innovations from these partnerships and collaborations will be integral in creating the financial and payment ecosystem that Nigeria needs.
So where will they find the next 50 million clients? Well, they’re already around. They’re in schools and churches, mosques and playgrounds. They are everywhere. But it’s not just about seeing them now, is it?
In that case, the real question, and the one that we have to all wait and see the answer to is “What innovation will the players decide is their best bet?”
And if you ask me? Well, my money’s on contactless payments
Jed Eromosele, DR CopyWriter, UNIBEN
