A specialist in the Digital Financial Services [DFS] markets and managing director of Intermarc Consulting, Jacqueline Jumah has said that the mobile money business case has been misunderstood in Nigeria.
Speaking exclusively to Fintech Africa, Jumah said that “there is the assumption that once agents are deployed across the country, then mobile money will prosper.
“Another point is that the mobile money business case has been misunderstood. Minimal effort is being channeled to daily meaningful value propositions. What are the existing use cases? What are providers offering to encourage the uptake of mobile money? What problem is mobile money solving?
“With this misunderstanding comes the creation of strategies based on agent numbers only (volumes) or value (amounts of money) with no basis, leading to both increasing agents and customer churn rates.
With experience spanning decade spent working with DFS in East and West Africa, Jumah said the operating framework in Nigeria allows banks and third-party entities to issue e-value.
“Mobile money has stalled, not because telcos have not been allowed to issue e-value, but because the comparative advantage (distribution, huge marketing budgets, flexibility, innovativeness, etc.) each partner especially telcos in the business models have not been fully utilized, in this case, telcos have only been engaged in providing the technological infrastructure.
“The banks have also dwelled on being the face of the solutions even when they are not as innovative and have been perceived to only issue accounts.
“There is a general assumption that mobile money can only grow when telcos issue e-value, and therefore the regulating guideline should change – this is not necessarily true. If the telcos can be allowed to issue e-value, then it is obvious that they will prosper following their distribution comparative advantage, but there are also options to leverage this strength”, she said.