@OP,
Unless you are a service provider . . . even at that, I think unless you've done like the Paga boys and raised some cool millions off US-based VCs, there is nothing to be made from Mobile Money. I think maybe CBN (license costs) are the real winners here.

Why do i say so? The product is too cliche. Everybody goes 'M-Pesa, M-Pesa', but they forget that in Kenya, there is poor banking penetration. In Kenya, you only see the Stancharts and the Barclays, and those banks hardly reach beyond the capitals and big cities. So the network operator reached into their pot and took a big chunk out of the financial pie, leveraging its network of distribution and its pervasive reach. Everybody knows that in Africa, mobile operators are way more innovative than any of the other FMCGs in the market. So they created all the products the banks never thought of.

Meanwhile in Nigeria, there are 24 or so first-tier banks, and they have enough IT muscle to roll out a mobile banking product. Many of them have done it already.
Furthermore, many of them have microfinance subsidiaries, and they can easily reach the so-called 'unbanked'. Why did they now agree to pay CBN for 'Mobile Money Licenses', like it was some new GSM license? Must have been a case of Ngozi Okonjo-Iweala disease (oversabi equals nonsabi). The World Bank says Mobile Money is great, therefore We Must Invest in it.

Though I would not knock the idea 100%. Rather than promoting it as some kind of poor people's product (which seems to be the way the one in Africa is defined), I would rather the market looks at the tech angle. With NFC and other contactless technologies, mobile payments could be leveraged into the pervasive payment mode for everyone, as opposed to cards. Think Google Wallet. You could use your NFC phone to pay for bus fares, parking tickets, supermarket till, etc. . .  Aw, shucks. There are no buses, public parking, or shopping malls (in general) in Nigeria

yamakuza:

1. Can you tell us more about the UNIQUE features of Paga?

2. What led to your adopting them as your primary provider?

Thanks!

Although the question is not directed at me; the following are my thoughts:

1. I guess you can read the unique features on Paga Website. Quite detailed as well.

2. I guessed that they were recruited by Paga

1stCitizen:

Cannot wait too. Just like someone pointed out earlier, CBN may have quietly given banking licences to people without regulation. By the time issues start coming up then there will be strict regulations and only those with company or business registration will be able to trade like they did in Kenya.

CBN has rolled out a regulatory framework (on CBN website) that is quite tighter than the mobile money framework elsewhere (Kenya, Australia, Indonisia, etc) and excluded the mobile networks:
http://mobilemoneyafrica.com/mtn-flays-cbn%E2%80%99s-m-payment-policy-in-nigeria/

While CBN policies has very clear advantages (allowing the small guys to enter the market by keeping the big guys out), I think the current low level of penetration is as a result of these. This business will result in cultural shift and you need very heavy advertisement campaign to achieve that in any society like Nigeria. Technology alone will not cut it. The mobile network operator are the only people with the financial muscle to do the advertising campaign required.

Nigerian banks can finance the campaign required. But being risk aversed, I dont see them staking large amount of money until they see a succesful Nigerian case study who has spent money to create the necessary awareness and that is when the real competition will begin.

I think companies like Paga are suffering from inadequate advertisement campaign funds. You you spend the major part of your resources developing agency network and those agents do not get enough business, they become dissillusioned very fast and move into other things abadoning your network. This is especially true of Nigeria's fast buck business mentality.

I think there is a very big potential and the Nigerian market is very big. I believe Paga has a good model (CBN's 3rd model) but they need to get the information out there. It is going to be expensive. Will their backers pump in money and be patient for ROI?

pluto04:


While CBN policies has very clear advantages (allowing the small guys to enter the market by keeping the big guys out), I think the current low level of penetration is as a result of these. This business will result in cultural shift and you need very heavy advertisement campaign to achieve that in any society like Nigeria. Technology alone will not cut it. The mobile network operator are the only people with the financial muscle to do the advertising campaign required.

Hmmm . . . I was wondering why a Google, Visa, or Mastercard did not see any opportunity there. They have the financial muscle as well as the products they can deploy.

pluto04:

Nigerian banks can finance the campaign required. But being risk aversed, I dont see them staking large amount of money until they see a succesful Nigerian case study who has spent money to create the necessary awareness and that is when the real competition will begin.

Well, Nigerian banks have financed e-payment schemes in the past, with very good success. Nigerian banks set up and funded Valucard and Interswitch. They have also pulled in Mastercard and Visa into the market. No reason why they couldn't have created SPVs with other payment providers to float Mobile Money. Personally I think the policy should have been subject to a lot more scrutiny from stakeholders. Rather, CBN has rolled it out with the classic Nigerian Voodoo approach.

pluto04:

I think companies like Paga are suffering from inadequate advertisement campaign funds. You you spend the major part of your resources developing agency network and those agents do not get enough business, they become dissillusioned very fast and move into other things abadoning your network. This is especially true of Nigeria's fast buck business mentality.

Companies like Paga can never build the agent network to cover a country like Nigeria. The mobile operators have spent billions developing their channels, not in infrastructure, but in awareness and incentive structure. If you have a good product that has very high guaranteed turnover, the business will come to you.

Before you walk you must learn to crawl.

You guys have no idea about this mobile money crap. Its not going to work in Naija - not for another 5 - 10 years.

Right now - we just dey do - follow follow. And you cant make money doing that , it would be like pam anderson - but with smaller tits.

UncleJJ:

Before you walk you must learn to crawl.

You guys have no idea about this mobile money crap. Its not going to work in Naija - not for another 5 - 10 years.

Right now - we just dey do - follow follow. And you cant make money doing that , it would be like pam anderson - but with smaller bosoms.

Could you be more specific?
That didn't really provide much enlightenment.

AjanleKoko:

Hmmm . . . I was wondering why a Google, Visa, or Mastercard did not see any opportunity there. They have the financial muscle as well as the products they can deploy.

I wouldnt know the risk appetitite of these companies. The risk/reward of Nigeria are quite high. You have to realise that a lot of global companies still consider Nigeria too risky (e.g political risks, social atttitudes towards bribery and corruption). For example a company I have worked for exited an European country because of risks related to attitude towards bribery and corruptio. The company will never dream (at the moment) of entering Nigeria market. It does not mean the potential high rewards are not there. The mobile payment has been succesful in countries (Kenya, Indonisia, Haiti, etc) with similar social conditions as Nigeria. There is no reason why it can't succeed in Nigeria. Moreover, Nigeria has a lot more unbanked population than all the countries where it has been succesful.

Well, Nigerian banks have financed e-payment schemes in the past, with very good success. Nigerian banks set up and funded Valucard and Interswitch.

Interswitch was promoted by Telnet and the banks required a lot of convincing to back it. It needed to be backed by a banking consortium to ensure its success. Similar business models (ValuePay (i think) and SmartPay) came up around when Interswitch started that did not enjoy similar success because they did not have the backing of a network of banks and did not have enough money to independently develop extensive channel.

They have also pulled in Mastercard and Visa into the market. No reason why they couldn't have created SPVs with other payment providers to float Mobile Money.

It wasn't so obvious at that time that Mastercard and Visa are going to be successful. I remember presenting the Mastercard idea to my bank in 2001 and they were put off by the infratructure and operation cost. They were not sure they'll be able to earn enough to cover their cost. Similarly we dont know how mobile money will turn out.

Personally I think the policy should have been subject to a lot more scrutiny from stakeholders. Rather, CBN has rolled it out with the classic Nigerian Voodoo approach.

I wont critisize CBN's approach too hard. They only need to create an enabling environment. They are trying to do that with their cash restriction policy. However, they are falling into the trap of over regulation (of a non existent industry) and creating unnecessary restrictions and barriers to entry. They should have allowed the industry to takeoff before coming up with restrictive policies.

Companies like Paga can never build the agent network to cover a country like Nigeria. The mobile operators have spent billions developing their channels, not in infrastructure, but in awareness and incentive structure. If you have a good product that has very high guaranteed turnover, the business will come to you.

I agree. I dont think companies like Paga are big enough to create the kind of revolution that CBN is envisaging. They can be successful if they concenterate on taking Nigeria one state at a time.

pluto04:

Although the question is not directed at me; the following are my thoughts:

1. I guess you can read the unique features on Paga Website. Quite detailed as well.

2. I guessed that they were recruited by Paga

i'll wait for him to reply.

There's nothing on Paga's site that is UNIQUE or that cant be gotten anywhere.

Which leads to my question of why a businessman would choose them as a PRIMARY partner in uncharted waters.

CBN has rolled out a regulatory framework (on CBN website) that is quite tighter than the mobile money framework elsewhere (Kenya, Australia, Indonisia, etc) and excluded the mobile networks:
http://mobilemoneyafrica.com/mtn-flays-cbn%E2%80%99s-m-payment-policy-in-nigeria/

maybe they want to make it homegrown?

While CBN policies has very clear advantages (allowing the small guys to enter the market by keeping the big guys out), I think the current low level of penetration is as a result of these. This business will result in cultural shift and you need very heavy advertisement campaign to achieve that in any society like Nigeria. Technology alone will not cut it. The mobile network operator are the only people with the financial muscle to do the advertising campaign required.

almost every telco has found someone to piggyback.

Nigerian banks can finance the campaign required. But being risk aversed, I dont see them staking large amount of money until they see a succesful Nigerian case study who has spent money to create the necessary awareness and that is when the real competition will begin.

banks are also piggybacking.

In fact, an alliance involving a solid bank with capital, a network provider with wide coverage and a license holder to provide support can provide the synergy required to make things work?

I think companies like Paga are suffering from inadequate advertisement campaign funds. When you spend the major part of your resources developing agency network and those agents do not get enough business, they become dissillusioned very fast and move into other things abadoning your network. This is especially true of Nigeria's fast buck business mentality.

I think there is a very big potential and the Nigerian market is very big. I believe Paga has a good model (CBN's 3rd model) but they need to get the information out there. It is going to be expensive. Will their backers pump in money and be patient for ROI?

rather like putting the cart before the horse.

I assume that for all of them, 2012 is just for testing the waters.

They'll then go back to the drawing board and relaunch come 2013.

pluto04:


Interswitch was promoted by Telnet and the banks required a lot of convincing to back it. It needed to be backed by a banking consortium to ensure its success. Similar business models (ValuePay (i think) and SmartPay) came up around when Interswitch started that did not enjoy similar success because they did not have the backing of a network of banks and did not have enough money to independently develop extensive channel.

Interswitch was actually promoted by Accenture and Telnet, and even Valucard, to the banks, as their ATM switch provider. Valucard pulled out of the JV at some point.
Conversely, Valucard was a plc, with the founding banks having shareholding, and funding the enterprise. Visa came along and bought a small stake sometime later.

yamakuza:

In fact, an alliance involving a solid bank with capital, a network provider with wide coverage and a license holder to provide support can provide the synergy required to make things work?

You don talk am finish. The CBN guys never consulted anybody. Right from the first cut of their framework, they had sought to exclude the telcos.
Meanwhile, right there in the streets, airtime is already being exchanged for cash in more ways than one. You want to send money to someone, you send him airtime, he sells the PINs, and pockets the cash. CBN framework outlawed the 'exchange of airtime for cash'. What if that is the killer application that will spur the scheme to life?

Nigerian policy makers are all like Ngozi. Too 'learned' to understand anything.

AjanleKoko:

@OP,
Unless you are a service provider . . . even at that, I think unless you've done like the Paga boys and raised some cool millions off US-based VCs, there is nothing to be made from Mobile Money. I think maybe CBN (license costs) are the real winners here.

hmmmn.

So, as always, its The Pyramid Theory?

Why do i say so? The product is too cliche. Everybody goes 'M-Pesa, M-Pesa', but they forget that in Kenya, there is poor banking penetration. In Kenya, you only see the Stancharts and the Barclays, and those banks hardly reach beyond the capitals and big cities. So the network operator reached into their pot and took a big chunk out of the financial pie, leveraging its network of distribution and its pervasive reach. Everybody knows that in Africa, mobile operators are way more innovative than any of the other FMCGs in the market. So they created all the products the banks never thought of.

how about South Africa and India?

Meanwhile in Nigeria, there are 24 or so first-tier banks, and they have enough IT muscle to roll out a mobile banking product. Many of them have done it already.
Furthermore, many of them have microfinance subsidiaries, and they can easily reach the so-called 'unbanked'. Why did they now agree to pay CBN for 'Mobile Money Licenses', like it was some new GSM license? Must have been a case of Ngozi Okonjo-Iweala disease (oversabi equals nonsabi). The World Bank says Mobile Money is great, therefore We Must Invest in it.

i think its all in a bid to go cashless ASAP, with the attendant benefits:

- 24hr banking
- less staff
- less salaries
- cost of managing cash, etc

if ATMs didnt help them achieve that because it required having a bank account, perhaps MM will since over 80m have phones?

Though I would not knock the idea 100%. Rather than promoting it as some kind of poor people's product (which seems to be the way the one in Africa is defined), I would rather the market looks at the tech angle. With NFC and other contactless technologies, mobile payments could be leveraged into the pervasive payment mode for everyone, as opposed to cards. Think Google Wallet. You could use your NFC phone to pay for bus fares, parking tickets, supermarket till, etc. . .  Aw, shucks. There are no buses, public parking, or shopping malls (in general) in Nigeria

lolz.

Come to think of it, they'd have to promote it as a fad if they want fast uptake in naija.

We too like BB, iphone, ipad, etc.

Time for iMoney to join the list.

yamakuza:

hmmmn.

So, as always, its The Pyramid Theory?

how about South Africa and India?

i think its all in a bid to go cashless ASAP, with the attendant benefits:

- 24hr banking
- less staff
- less salaries
- cost of managing cash, etc

if ATMs didnt help them achieve that because it required having a bank account, perhaps MM will since over 80m have phones?

lolz.

Come to think of it, they'd have to promote it as a fad if they want fast uptake in naija.

We too like BB, iphone, ipad, etc.

Time for iMoney to join the list.

Believe it or not, South Africa is very new to the party. Just like Naija. India likewise.
The true pioneers of MM are Kenya, the Phillipines, and Afghanistan. And the products were rolled out by mobile operators in all cases. Safaricom in Kenya, SMART in the Phillipines, and Roshan in Afghanistan. The market dynamic was also the same in all cases: poor banking penetration of less than 10% of the addressable market.

And on your ATM analogy. ATM is a roaring success in Nigeria. Without ATMs, cards were never able to achieve up to 100k penetration (Valucard celebrated 100k cards issued in 2001 or so). After ATMs, cards are now more than 25 million in the market.

AjanleKoko:

Believe it or not, South Africa is very new to the party. Just like Naija. India likewise.
The true pioneers of MM are Kenya, the Phillipines, and Afghanistan. And the products were rolled out by mobile operators in all cases. Safaricom in Kenya, SMART in the Phillipines, and Roshan in Afghanistan. The market dynamic was also the same in all cases: poor banking penetration of less than 10% of the addressable market.

And on your ATM analogy. ATM is a roaring success in Nigeria. Without ATMs, cards were never able to achieve up to 100k penetration (Valucard celebrated 100k cards issued in 2001 or so). After ATMs, cards are now more than 25 million in the market.

so, if CBN decided to rollout despite market dynamics being different from what exists in Kenya and co, we can safely assume its all in a bid to go cashless.

If banks are scrambling for it, its probably because they want to lower operating costs (self/serv/ice channels lead to empty banking halls, less staff, etc).

Last i heard, banks werent making profits on their ATMs and people still dont trust ATMs.

A new channel like the mobile phone might just get them where ATMs couldnt, no?

How about the issue of float management and security for agents?

Its unfair to "outsource banking services" to Agents without protection.

there are reasons why mobile money has been  a success in Kenya and Philippines but a failure or less of a success in countries with similar demographics.
the regulatory issue is a major one. Not allowing mobile operators to go it alone is akin to duplicating an already efficient value chain.
another major one is the literacy level. the literacy level in Kenya is around 75 percent. while Nigeria is one of the 9 most illiterate countries n the world.
If mobile money is targeted at the unbanked (like it is in Philippines and Kenya), the bulk of who are illiterate, then the model must be holistically appraised. It must be simplified and appeal to my illiterate village folks.
They must not make the mistake they made with micro finance banks. A simple model designed for the poor was brought to Nigeria and they attempted to compete with commercial banks in building, official cars and even staff remuneration.

AjanleKoko:



Companies like Paga can never build the agent network to cover a country like Nigeria. The mobile operators have spent billions developing their channels, not in infrastructure, but in awareness and incentive structure. If you have a good product that has very high guaranteed turnover, the business will come to you.

Those Stanford boys clean out the VCs wella.
That Paga thing no jell at all.

To those asking if OmoAdugbo has a manual or ebook on Mobile Money in Nigeria, the Answer is It is on Coming, Nairami Nigeria will be developing Consultancy Service Offerings for those who will want to Invest in the Industry but for Information Disermination, Nairami Nigeria and OmoAdugbo by Extension will be at the Forefront. I will always be Glad to Share alot on this Site and other Online places.

People believe MOBILE MONEY will not WORK. My People, any Community that is not willing to Try New Approach to Life, may stay too long on Hope. The Industry is going to be very Vibrant. I wonder Why Some Banks scrambled for Linsence. FirstBank, Ecobank, UBA, Zenith, Stanbic IBTC, GTB. No TELECOM got Linsence but they are Everywhere in Patnership, Glo Text Cash, MTN, ETISALAT PayCom. If it is not going to be Profitable WHY are they taking Positions.

All Mobile Money Operators are adopting varing approaches to Lauch and Operate. In term of Strategy, some are doing Buttom Top, some Top Buttom, some Holistic, some other Targeted. In term of Technology, some doing WEB like Monetise, WAP like U-Mo, some USSD like MTN People, some SMS and others ALL in all like PAGA.

mbulela:

there are reasons why mobile money has been  a success in Kenya and Philippines but a failure or less of a success in countries with similar demographics.
the regulatory issue is a major one. Not allowing mobile operators to go it alone is akin to duplicating an already efficient value chain.
another major one is the literacy level. the literacy level in Kenya is around 75 percent. while Nigeria is one of the 9 most illiterate countries n the world.
If mobile money is targeted at the unbanked (like it is in Philippines and Kenya), the bulk of who are illiterate, then the model must be holistically appraised. It must be simplified and appeal to my illiterate village folks.
They must not make the mistake they made with micro finance banks. A simple model designed for the poor was brought to Nigeria and they attempted to compete with commercial banks in building, official cars and even staff remuneration.

Allowing them to go it alone is risky in a not too well regulated environment, the CBN and the NCC can work more on it
getting the banks to resolve 'common issues' alone is like pulling a tooth,

does anyone has the figures for the uptake of internet banking in nigeria, I feel the banked even need it more than the unbanked in nigeria; bank branches are too congested and services are extremely slow

Dis Guy:

Allowing them to go it alone is risky in a not too well regulated environment, the CBN and the NCC can work more on it
getting the banks to resolve 'common issues' alone is like pulling a tooth,

does anyone has the figures for the uptake of internet banking in nigeria, i feel the banked even need it more than the unbanked in nigeria bank branches are too congested and services are extremely slow

the reason why it will not be as useful to the banked is that it will be difficult to move huge sums through the distribution channel. sums that will be attractive to the banked. you and i will be interested in transactions of 50k and above. which agent will be carrying that kind of amount around?
i doubt mobile money is aimed at decongesting banking halls. banking halls need to be simplified in design plus structure and multiplied. all these sky scrappers being build as bank branches are defeatist.

I remember in 1999 when a high ranking government official said even market women will own mobile phones in Nigeria, I was amongst those laughing at the statement in my brother's living room. Even with the cut throat prices for SIM cards and handset then, Nigerian from every level of the social strata thronged the offices of MTN and ECONET to get the phone lines. Nigerians are tech savvy mind you and I have empirical data to prove that.

I remember when I was sourcing primary data for an MSc Dissertation on e-Payment Systems in Nigeria many years ago, how a large chunk of my respondents sneered at the idea of using debit cards in Nigeria. One actually told me it will never happen because of the peculiarity of Nigerians. Pecularity! hmmmm.

While I do not subscribe to using the Kenyan scenario as a  template in the Nigerian context I think it is completely out of place for someone to come to this forum and say that IT IS GOING TO FAIL.

Whoever said the low penetration of banks in Kenya spurred the massive adoption of Mobile Money has never been to Kenya. Kenya has more banks and branches as commensurate with their demographics than Nigeria. Name it, there is hardly an emerging market in the world that does not maintain a presence in that country via a financial institution. Even their local banks and branches are more than what you have in Nigeria in terms of the number of bankable "heads" per branch.

The major driver of MM adoption in Kenya was the election crisis and because Kenyans in the rural areas migrate to the urban areas and send money home. The election crisis put every bank under lock and key for many weeks and M-pesa became the saving grace. Therein lies the value proposition; "send money home". Nigeria only needs to find its own and MM will work.

I believe that by driving MM in Nigeria CBN is doing the right thing and this move will become a subject of research in the future by other financial regulators in developing nations. The cashlite initiative is the a first step. It is not going to end at a cap of N150,000. It will go down. When incentives are given to merchants to take MM payments carrying and N50,000 cash becomes expensive, we all know Nigerians will try to avoid such costs.


Why do you think MTN is behaving like a wounded lion because CBN refused to allow a TELCO- Only led model? Those market researchers at MTN are fools abi?

^^
Well, I have been to Kenya. Though I did see a few home-grown banks with names like 'Family Bank' and 'Kenya Commercial Bank' in Nairobi, it appeared to me that the biggest banks in that country were Standard Chartered, Bank of India, and Barclays.

I don't know much about the number of branches per capita in Kenya, but we do have banks with upwards of 1,000 branches in Nigeria. Most banks are heavily represented in all the state capitals and major cities. We have only 774 or so LGAs.

Also, I don't think anybody is saying Mobile Money is going to fail in Nigeria. We've only been suggesting models that CBN might have considered before they rolled out their exclusive policy. It's difficult to understand what they are trying to achieve by shutting out telcos, who have developed the most extensive grassroots distribution network in Nigeria, and are also the owners of the 'Mobile' customers who would take up this service. It doesn't make sense to me.

Please can some provide us with an appraisal of the level of usage of this month mobile banking. I will like to know the experience of those who have used it. Lastly, I would like to hear the experience of someone who is in the business of providing mobile money services as an agent or aggregator. Because all we have had so far are opinions and projections on mobile banking, I need some practical experience.

Mobile money business is a good one, I am an aggregator of Etranzact Pocketmoni, i recruit agents.

With pocketmoni application on customers phone , the customer can buy recharge cards, pay cable tv bills, send money to any mobile phone, send money to any bank account in Nigeria.

How Agents make money, Etranzact charges the customer N150 Monthly access charge,on that N150 agents gets 25%.



25% of 150= 37.5

so if u can register

1000 users=37.5*1000= 37,500 mothly
10,000 users=37.5*10,000=375,000 monthly
100,000 users=37.5*100,000=3,750,000 monthly

s

Also agents make money on etranzact mobile money cards attched to the pocketmoni application to enable them withraw from atm machines,pay for tickets, and other online payments.

Agents get this card for 500 and sell 600. so you make N100 on each card.

10 cards=1000 gain
100=10,000 gain
1000=100,000
for more enquires on how to become an agents visit my website.



http://www.novinebooks.com.ng/Etranzact+Aggregator


or call 07031234855,08028473125

Interesting? ^^

What are the requirements for being an agent?

Do you have a retail shop?

^ @novine, u mean?

This spambot sef.

Guess we are yet to hear testimonies because people are yet to find compelling reasons to use MMoney.

yamakuza:

^ @novine, u mean?

This spambot sef.

Guess we are yet to hear testimonies because people are yet to find compelling reasons to use MMoney.

The real problem is what we said earlier. The people who have the license can't roll it out effectively. They have no money, they have no experience. Period.

AjanleKoko:

The real problem is what we said earlier. The people who have the license can't roll it out effectively. They have no money, they have no experience. Period.

Is this also true for MTN Mobile Money and Glo TextCash?

They seem to have the money and experience.

[s]Cant say same for U-Mo and Paga though. Etranzact, maybe.[/s]

yamakuza:

Is this also true for MTN Mobile Money and Glo TextCash?

They seem to have the money and experience.

[s]Cant say same for U-Mo and Paga though. Etranzact, maybe.[/s]

MTN, yes. Glo, no.
MTN and Glo have only made positioning statements. CBN has forbidden them from rolling out, so they've not done anything yet.

^ No wonderrr !

If you have used intercontinentals's Imobile, thats is a version of Mobile money,Firstmobile by 1st bank, any mobile money application in all the banks in Naija is being powered by etranzact. I have used I-mobile ,its makes life easy u dont have to go 2 d bank,4rm d comfort of your home, u can send money to all the banks in Naija.

To get more info check http://www.novinebooks.com.ng/Etranzact+Aggregator

Or call 07031234855,08028473125.