We expect the e-payments industry to continue to record significant growth even beyond the pandemic.
The payments industry in Nigeria continues to demonstrate its promising growth with the recent data from the Nigeria Inter-Bank Settlement System (NIBSS) showing solid growth across the various e-payments mechanisms in the first 5 months of 2020 (January – May 2020). NIBSS Instant Payment (NIP) transactions recorded a healthy 17.3% y/y and 47.7% y/y growth in transaction value and volume to N48.7tn and 615.3m respectively. For POS transactions, total transaction value and volume grew 44.0% y/y and 50.0% y/y respectively to N1.6tn and 228.9m respectively. The most impressive growth was recorded in Mobile transactions category where transaction volume and value grew 567.5% y/y and 364.7% y/y to 41.1m and N853.7bn respectively.
王子神途Explore Economic Research Data From Nairametrics on Nairalytics王子神途
The sustained growth in e-payments transaction volume and value in Nigeria evidences increased adoption of technology in payments and cash transfers by the Nigerian populace. This is driven by increasing internet & mobile penetration as well as investment by banks and other payment-based fintechs investment in payment technology infrastructure. Furthermore, we note that the Central Bank of Nigeria (CBN) announced reduction to the fees payable on mobile and internet payments/transfers. We think this has had a mild impact on increased usage of these platforms. In addition, with the onset of the pandemic the use of physical cash in settling payments and bills has been discouraged. Thus, we think e-payments benefitted from significantly from this.
Going forward, we expect the e-payments industry to continue to record significant growth even beyond the pandemic as many of the new methods of transacting will be sustained in our view. In our opinion, the e-payments sector of the fintech ecosystem is expected to serve as the growth frontier of the new decade in Nigeria as highlighted in our 2020 Nigeria Fintech Sector Report (See CSL_Nigeria’s Fintech Industry 2020; Growth Frontier of the New Decade). Consequently, we expect banks and payment fintechs like Interswitch & Paga to benefit significantly from the e-payments revolution.
王子神途READ MORE: Nigeria’s fintech industry 2020: The growth frontier of the new decade王子神途
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly-owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
Your email address will not be published.
This site uses Akismet to reduce spam. Learn how your comment data is processed.
The CBN seems to be making the same mistake with PSB as it has made with commercial banks.
Nigeria is an internet giant (yes …stay with me)
As of 2019, there are 184million mobile subscriptions in Nigeria, this translates to an 89% penetration rate; there are 125m internet users in Nigeria this again translates to a 60% penetration rate, to compare Africa is at 36% internet penetration. In Nigeria, 44% of users are on 4G smart network.
This looks like a nation that should have a robust mobile banking ecosystem, so let us look at Mobile Banking. In the latest Enhancing Financial Inclusion and Access Report for 2018, Nigeria is listed as having an adult population of 99million.? Of this, only 39.7% are termed banked, with only 3.3% who use mobile money with only 1.3% having a loan with a bank. Unbelievable data, in Africa’s largest economy, with 112million internet users and 87% internet penetration as 2018, only 3.3% of the banking population use mobile banking. It gets worse, only 1.7% are actual registered mobile money users.
王子神途READ: What Nigerian banks consider before granting personal loans王子神途
王子神途Why don’t Nigerians use Mobile Money?王子神途 A whopping 83% say they are unaware of mobile money. A further 5.7% say they do not know mobile money, thus 89% have no clue about mobile money. The data shows that 60% of the banking population or 59.4million Nigerians do not use mobile money or banking accounts. The data is further reveling, as 97% of subsistence farmers and business owners (farming, non-farming and services) receive their income in cash. This group is the main target for mobile banking as they all have phones, but no bank account.
Why does Nigeria still have 82% of Nigerians receiving cash when internet penetration is over 60%?
王子神途READ: Zenith Bank blows past Access Bank as customer deposits cross N4 trillion王子神途
The answer is simple, mobile money has been under the regulatory overview of the Central Bank of Nigeria (CBN). The CBN has viewed mobile bank by the suffix “Banking” and is regulating that sector like banks. For example, the CBN just released the guidelines for Payment Service Banks (PSB), that, according to the CBN have the objective of “promoting financial inclusion and access to financial services for the low-income earners and unbanked segments.” I recall going to Kenya and friends buying roasted fish from a roadside vendor and the lady, a “buka operator” was a Safaricom PSB agent. Back then, Safaricom was regulated by the telecom’s regulator not the central bank.
王子神途READ ALSO: Is MTN getting too big?王子神途
The CBN alone should not license PSBs, payment systems are not just carried out by banks but by an ecosystem of networks including post offices, cooperatives, etc. The CBN is making the same mistake with PSB as it has made with commercial banks which is, selling the licenses so expensive that most banks go after the same high-income urban dwellers, ignoring the low income, cash-heavy, rural dwellers. The PSBs ecosystem can and should be blue sky registration thus allowing any vendor, including the post office to register postal carriers who desire a PSB license and NCC can license telecom or fintech companies.
The role of the Central Bank should be the creation of a seamless network for these new PSBs to interface with traditional commercial banks. Can Nigeria dare to imagine an environment where PSB licenses are set at a nominal N100,000.00? This drops the huge barrier to entry and will attract more entrants to this opportunity. For instance, farming groups and cooperatives can deploy PSB platforms to serve their members.
王子神途READ: Official: Nigerian Treasury bills calendar for Q4 2020王子神途
The CBN is also playing favourites in the Nigerian economy and seeking to protect the turf of banks from competition from the Telcos. The guidelines for PSB bar them from accepting closed scheme electronic value (airtime) as a form of deposit or payment. Why? Now many Nigerians use airtime as a form of currency and cash transfer. The PSBs should be seeking to deepen the use of non-cash alternatives especially as digital card can be tracked. The CBN also bars PSB from giving any kind of loans. Why can’t PSBs give loans? Why can’t a cassava cooperative operate a PSB platform and issue loans of a maximum N50,000 to her members? Banks have achieved only 1.3% penetration rate for loans, why bar PSBs?
Nigeria can indeed do better.
Magu’s lawyer insists the judgement throws light on his client’s good work as then EFCC boss.
In a new development, Wahab Shittu,? the legal counsel to Ibrahim Magu, the erstwhile Acting Chairman of the Economic and Financial Crimes Commission has said that the UK’s recent judgment which overturned the $10bn that was awarded against Nigeria in the Process and Industrial Development case is actually a big win for his client.
You will recall that it was reported by Nairametrics that a petition to President Muhammadu Buhari by the Minister of Justice and Attorney General of the Federation, Abubakar Malami complaining about Magu’s delay in acting on a presidential directive by the Ministry of Justice to investigate the above matter mentioned led to Magu’s removal.
But tides seem to be turning ?as Ross Cranton, the presiding judge at the Business and Property Courts of England and Wales stated whilst delivering his judgment on Friday, the 4th of September, 2020 that he via their application, has granted Nigeria an extension of time and relief from sanctions that were based on the accomplishments of the Magu led EFCC in the establishment of fraud and corruption evident in the contract as reported by Nairametrics
Consequently Shittu, in a statement to Sahara Reporters has asserted that this judgment has thrown light on his client’s good work during his EFCC days as well as on his innocence and thereby vindicating Magu.
This he said:
“I feel a strong desire to react to the latest UK verdict against P&ID in the context of the HAGF’S memo which triggered the ongoing judicial commission of inquiry probing the activities of the suspended Acting Chairman of EFCC Mr. Ibrahim Magu hereinafter referred to as “my client” and the vindication the outcome of the UK verdict represents in our national consciousness.
“It will be recalled that in the HAGF’S widely publicised memo to the President, the nation’s Chief Law Officer wrote amongst others against our client as follows; by letter dated 26th June 2018 that was copied to the Acting Chairman of EFCC, the Chief of Staff to the President conveyed Your Excellency’s directive mandating the investigation of the P& ID matter. This directive was followed up by a comprehensive letter dated 28th June 2018 to the EFCC setting out facts and documents for the investigation.? As important as this matter is with its attendant threat to our national assets, the EFCC did not accord this presidential directive with any serious attention until a year after around July/August 2019 when the scale had already tilted dangerously against Nigeria. “In view of this delay, police were requested to also conduct an independent investigation into the P&ID matter. In the same vein, in December 2019, there was request to the Ag. Chairman of the EFCC to forward copies of all charges, proof of evidence, and judgments in relation to all cases filed by the EFCC against P&ID and their associates, copies of warrants of arrest, copies of other documents in relation to the ongoing investigations.
“The above documents were required by the police to enable it interface with Interpol on this matter. The Acting Chairman of EFCC did not respond to my request. The above is just one out of several correspondences which institution has had cause to send to the EFCC and which were neither acknowledged nor replied. Examples of cases where the Acting Chairman either refused to respond to requests from the Office of the Attorney-General of the Federation and the Solicitor-General of the Federation are attached as (“Annex 3’’).
“In total, it is estimated that the Federal Government of Nigeria lose or would have lost Forty-Seven Billion, thirty-six million, five hundred and twenty eighty thousand, two hundred and nine Naira (N47, 036,528,209.00).? In dollars, the estimated amount would be approximately, ($85,008,917.43) Eighty-five million, eight thousand, and nine hundred and seventeen pence and in pounds, it would be Seventy-four thousand Pounds (N74,000.00).
“These losses would be directly linked to the lack of response by the Acting Chairman or lack of coordination and the Acting Chairman’s recalcitrant attitude to work.
“The above conclusions from the HAGF may have been seriously questioned by the outcome of the UK court’s verdict which has sent Nigerians and the Nigerian ruling elite in a celebration mood and exposed the good work of EFCC under Magu’s watch.”
Rather curiously, Nigeria’s Presidency has made a statement following the High Court ruling of Sir Cranston expressing delight at the judgment. This statement was made by tweets by Mr. Garba Shehu who is the official spokesman for President Mahummadu Buhari, on Friday, stating that the Nigerian government is relieved at the judgment as this has strengthened the government towards the goal of protecting its national assets from organizations and individuals with criminal intentions.
Furthermore, Shehu, on behalf of the presidency stated that the Presidency was indeed excited about the processes and the judgment; this in turn has given the Nigerian Government sufficient cause to challenge the perpetuation of frauds by P&ID with a view to overturning the arbitration award.
As the storms continue to rage in this Magu story with lots of developing twists and turns, it is safe to say, it is uncertain where the tides are heading, but one thing is sure, this is not the end of this whole drama.
The question many have desired answer to is whether a Joe Biden victory will favour Nigeria.
This article is not in any way political but rather an angle on how the winner of the forthcoming U.S. Presidential elections might influence a global oil economy that Nigeria is reliant on.
There is a consensus that Politics has an influence on the Energy markets and as observed in history, political developments have had ripple effects on the oil and energy economy. Recent history shows the political intervention by the United States President, Donald Trump earlier this year as he made diplomatic calls to Crown Prince Mohammed Bin Salman and Russian President Vladimir Putin to put an end to the oil supply glut that crashed oil prices to negative values. We can also recall the aftermath of the Venezuelan Presidential election in 2018, where a victory for Nicolas Maduro led to oil sanctions from the United States which boosted prices astronomically.
王子神途READ: Apple records?$44 billion loss in market value?amidst US trade war with China王子神途
As Joe Biden campaigns around the United States, there are global and International observers who have significant interests in the outcome of the elections. From Beijing to Caracas to Tehran, there are several governments who would prefer Joe Biden because of how his policies might positively influence their economies, but would a Joe Biden victory favour Abuja?
There have been murmurings in the oil industry on what a potential Joe Biden victory might mean for the energy markets and how his stance on oil and green energy might influence the markets.
王子神途READ: Akinwunmi Adesina is expected to reunite AfDB’s member countries after re-election王子神途
“I am not banning fracking, let me say that again. I am not banning fracking, no matter how many times Donald Trump lies about me” – These were the words of Democrat candidate Joe Biden at a rally in Pittsburgh a few weeks ago.
This was very surprising as we have known his stance on climate change, greener energy, and environmental pollution (which fracking causes). Former Presidential contestant and Democrat, Bernie Sanders also raised the proposition of banning fracking as soon as possible earlier this year. At that very time, Joe Biden claimed he would battle the fossil fuel industry as they are destroying the planet and they would be no new fracking, drilling on federal lands including offshore.
Joe Biden’s proposed drilling ban on federal lands is in line with his party’s objective on achieving “net-zero greenhouse gas emissions as soon as possible”. His policy is quite reminiscent of Barack Obama’s policy on banning oil and gas drilling off the certain coasts and shores.
王子神途READ: FG discloses when Nigeria will start exporting petroleum products王子神途
Energy experts know Kamala Harris has been the albatross on the neck of the oil industry in America. On a few occasions, she has expressed her desire to battle the fossil fuel industry and during her time as attorney general had vowed to take some energy industry participants to court. She has also proposed banning hydraulic fracturing. Biden’s agenda on oil is to promote a greener United States and adding Kamala Harris as his deputy would entail this objective would be passionately pursued.
In November, the US general elections would take place and the winner would provide an outlook on what we expect from supply and demand, fundamentals in oil prices, the end or continuation for shale, and relationship with oil cartel OPEC.
Domestically, if Joe Biden stops new drilling, it would significantly reduce US oil production by 2 million barrels per day 王子神途by 2025, which is significant to reducing supply from the markets and consequently props up prices. Everyone knows how much OPEC+ have been desirous of a weak shale industry and how it would bring OPEC back to controlling and dictating the oil market.
王子神途READ: Total Nigeria caught in the oil demand and lockdown saga王子神途
Nigeria, a member of OPEC, would benefit from the weakness of Shale oil and US production in many ways.
With US supply drastically reduced, imposed cuts on Nigerian production would be tapered back to normal levels and this would significantly improve our oil revenue and economy fortunes as it is observed that 90% of our export earnings come from oil sales. From Trump’s inauguration in 2017, till early this year, a significant increase of 王子神途3.9 million barrels per day has been observed U.S production, which is why we have been having suppressed prices as supply as built over the Trump years.
Get the scoops and market intelligence that can helpyou make better investment decisions right in yourmailbox.