Embracing the mobile payments platform
The recently released MasterCard’s Mobile Payment Readiness Index (MPRI) has brought to the fore the need for Nigeria to ramp up efforts in making the country embrace the mobile payments platform.
The MPRI, which gauges the readiness for mobile payments of 34 global markets, representing about 85 percent of the world’s household consumption expenditure, shows Nigeria as lagging behind Kenya in the usage of mobile payments.
The three varieties of mobile payments on which the countries were gauged include person to person (P2P), mobile e-commerce (m-commerce), and mobile payments at the point of sale (POS).
Comparing the mobile payment readiness indices of Nigeria, a country of over 160 million people, with that of Kenya having a population of about 44 million it is glaring that Nigeria is still timid in the awareness and actual use of the mobile payment platform. The MasterCard MPRI scored Nigeria 31.3, while the east African country had a score of 40.4. The survey shows that about 28 percent of Nigerian consumers are familiar with mobile payments, 55 percent willing to use and only about 5 percent using it. In Kenya, 50 percent of consumers are aware, 56 percent willing and over 25 percent using it.
The MPRI is comprised of six components, which include consumer readiness, environment, financial services, infrastructure, mobile commerce clusters and regulation, is a data-driven, quantitative survey of the global mobile payments landscape.
According to the survey, Kenya is the leader of the Consumer Readiness component, thanks to Kenyan consumers’ very high levels of familiarity with and frequent usage of mobile payments.
Consumer readiness scores are driven in large part by how frequently mobile payments are currently in use. In Kenya, due to the popularity of P2P payment services – especially M-Pesa – 89 percent of Kenyans are familiar with mobile P2P payments and 68 percent are frequent users.
The report revealed that Nigeria lacks many of the sufficient conditions for a vibrant mobile payments market, adding that payment card penetration is close to zero (0.01 percent) compared to the index average of 24 percent. However, Nigeria beats the Index average in familiarity in all three payments media; willingness to use P2P is nearly 70 percent.
According to the survey, low environment, infrastructure, and financial services scores are part of the reason for M-Pesa’s success in Kenya. The country has the world’s highest rate of P2P payments familiarity at 89 percent and a reported usage level of 70 percent.
“Nigeria is not a hospitable place for mobile payments,” MasterCard said. “The regulatory environment, the legal system, the technology grid, and the banking system lag their sub-region and global counterparts. But Nigerian consumers turn the country’s index performance around with their strong desire for mobile to replace the insecurity and volatility of cash and barter.”
We believe that Nigeria can replicate the recorded in Kenya by putting in place infrastructure and the enabling environment for the adoption of mobile payments by more Nigerians.
MasterCard said it believes that by capitalising on what is in their power to change such as customer centricity, affordability of financial products, and mobile phone penetration, the Nigerian mobile payments industry can also begin indirectly to change those environment and regulatory factors over which it now lacks direct control by appealing to government and regulators with arguments centered around inclusion, social cohesion, and security.
The success of mobile payments in Kenya is remarkable and can serve as a blueprint for payments adoption in the rest of the emerging world, where safety and inclusion are key goals, MasterCard reckons.
We urge all the parties concerned, especially the Central Bank, banks and telecom companies to sort out all the issues bedeviling the growth of the mobile payments system in the country.
By: BusinessDay