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Nigerian Paytech Starup CoralPay in talks with Telcos to Extend Mobile Phone Insurance Payments


Nigerian payments service provider CoralPay is in discussions with telecoms companies to extend access to health insurance by mobile phone.

Talks are in progress with MTN, 9Telecom and Globalcom, one of which has agreed the plan in principle, Nkechika says. The scheme to allow mobile payment for health insurance supplied by AXA Mansard is already operating in partnership with Airtel.

CoralPay’s CEO Chioma Nkechika, said the company aims to allow rural Nigerians to access services in local health centres by making insurance payments by phone, using a digital wallet and with no need for a bank account. They can also pay in cash at a banking agent without even a digital wallet by using their phone number to identify the payment, Nkechika says.

Telcos have previously sought to distribute health insurance products using their own airtime as a method of payment but have been blocked by regulators, Nkechika says.

The companies are “quite excited” about the scheme, and Nkechika is optimistic that on-boarding them will be quick and easy as the process will replicate existing network operations.

According to Gbadegesin O. Alawode at the University of Ibadan, only 5% of Nigerians have health insurance and 70% still finance their healthcare through out-of-pocket spending.

The research identifies inefficient payment methods as one reason for the low penetration rate.

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CoralPay, founded in 2004, provides traditional processing for interbank transfers and also processes payments for Visa and Mastercard.

The company also aims to help its fintech customers to develop capacity and gain scale by providing back-end support.

The company’s C’Gate payment-processing engine, launched in 2018, lets customers use the short codes of their banks, alongside their mobile apps, to pay for goods and services from bank accounts and wallets. The facility is available at more than 250,000 points of sale.

Targeting Lagos State

The company’s infrastructure is used to support the collection of health insurance payments by the Delta State government. Nkechika has applied to the Lagos State government to do the same and is “very hopeful” that it will take up the proposal.

State health schemes in Nigeria are mainly used by formal sector workers in urban areas. The consultancy firm PwC has argued that the success of the schemes depends on their ability to pull in premium payments from as many people as possible and that states need to do everything possible to encourage this.

Otherwise, PwC says, the danger is that only sick or pregnant people will subscribe.

“This situation will put the financial viability of the schemes at risk in very short order.”

Nkechika’s aim is to make it possible for any payment made by card to be carried out by phone. CoralPay is also offering its solutions to solar power companies in Nigeria to allow them to collect fixed monthly payments, with Lumos among its users.

Bottom line

Simple and effective rural payment methods are a key part of extending health insurance take-up in Nigeria.