Agents, logistics hobble banks’ mobile money operations

Managing mobile money agents’ networks and logistic issues have conspired to frustrate money deposit banks from making progree in the mobile money operations in the country, according to experts who should know.

Ifeoma Onibuja, head, Digital banking, Fidelity Bank, disclosed that managing mobile money agents as well as logistic challenge has been a headache for the banks which has resulted in some banks scaling down their mobile money operation and focusing on other digital payments.

In Nigeria, mobile money operations are led by money deposit banks that control greater number of operators in the space.

Emmanuel Okoegwale, Principal Associate, Mobilemoney Africa, frowns at this and wondered why Nigeria still struggle with low adoption and highly fragmented agency networks

“Tanzania had achieved national inclusion target ahead of time due to the success of mobile financial services. Ghana is the most improved West African nation in mobile money adoption due to some regulatory adjustments. In Nigeria, mobile banking, card services are striving but not mobile money in the pure sense of it,” he said.

Not satisfied with the level of growth in the sector, Okogwale noted that: “There are so many grounds to cover and many targets to reach. Sometimes, it looks like we are yet to even get started at all due to the extensive lack of awareness, adoption, reach and coverage of the service in Nigeria.

“In many states of Nigeria, even within the state capitals, many people do not yet know that mobilemoney works in Nigeria. Recently, a gentleman drove all the way to meet me in Owerri from Port Harcourt and he wanted share his wonderful ideas about mobilemoney and how Nigeria can start using it to pay for services but when I told him that operators are licensed in Nigeria and actively trading, he was shocked that he had never seen one before. That is the reality of the Nigerian market space,” he said.

Okoegwale however identified factors responsible for the failure of bank led mobile money model in Nigeria these according to him lack of trust by banks on agents, lack of understanding of low value business, banks providing similar services to mobile money on mobile and online banking among others.

“Banks already have most of the services available on mobile money through mobile banking, online banking etc. However, these services do not meet the needs of the unbanked without the benefit of an agent network. Banks at least in most parts of Africa, still struggle to understand low value, high business platform, managing third party partnerships like agents and having high risk perceptions which impacts negatively on their ability to deploy platforms, and put in place risk mitigation plans to address their perceptions. Banks will only be successful when they can actually see fully branded agents with Bank’s brand colors all around the country. Until Banks trust the agents enough to place their full brands on them, then they will be success. Banks must build the capacity to trust their agents because they don’t trust their agents as it is presently,” he noted.