The Slow Acceptance of Mobile Payments in Nigeria

In a world where digital transactions are quickly becoming the norm, Nigeria seems to be lagging behind. The Electronic Payment Providers Association of Nigeria (E-EPPAN) recently expressed concerns about the slow pace of mobile payment adoption in Nigeria. According to a report by The Guardian Nigeria, this issue was highlighted at the recently concluded Mobile Money Africa International Conference.

The Association’s CEO, Mrs. Onajite Regha, during her address at the conference, emphasized the importance of mobile payment in fostering financial inclusion for the unbanked population and its potential to stimulate economic activities. She expressed her alarm that despite efforts by financial institutions, mobile network operators, and mobile payment service providers, the concept of mobile payments hasn’t quite caught on in Nigeria. The lack of widespread customer acceptance of this innovation, she explained, has resulted in a slow pace of adoption which prevents it from becoming a mainstream mode of payment.

Despite this lag, the potential for growth in this area is huge. With Nigeria’s mobile user base projected to hit 182 million by 2020, there is a vast market for mobile payments. The slow acceptance might be a temporary set-back, but with smart policies, education, and improvement in infrastructure, mobile payment could eventually become a staple in the country’s financial ecosystem.

Comparatively, countries like Kenya have already seen great success with the implementation of mobile payments. The East African nation has M-Pesa, a mobile payment and remittance platform which has become a central part of the country’s financial fabric. In fact, about 43% of Kenya’s GDP flows through M-Pesa, with over 78,000 M-Pesa agents across the country serving regular users and merchants alike.

For Nigeria, a country with a recently rebased GDP of about $500 billion – thus making it the largest economy in Africa – the potential for mobile payments is untapped. To stimulate growth in this sector, financial institutions and policy makers might need to create an environment more conducive for the growth and acceptance of mobile payments. They have started this in small ways, rewarding users of point of sales (POS) systems with certain incentives, but more can certainly be done.

In conclusion, while the adoption of mobile payments in Nigeria has been slow, there is considerable opportunity for growth. What is needed now is a concerted and strategic effort from the country’s financial and tech institutions to make mobile payments an integral part of Nigeria’s economy. This includes educating the populace about the ease and security of mobile payments, making more investments in the country’s digital infrastructure, and creating regulatory environments that encourage the growth of the mobile payment sector.