Nigeria has 167 million inhabitants, but there are only 25 million bank accounts. Conversely, the country boasts 90 million phone subscribers (and that figure continues to grow steadily).
Mobile banking in Africa has proved to very appealing to consumers. The best model so far, of a mobile money platform in Africa and in the world, has been Kenya’s M-PESA.
Launched in March 2007 by Safaricom, an affiliate of Vodafone, M-PESA’s subscribers base had reached 6.5 million by May 2009 with 2 million daily transactions. In 2010, with over 700 million domestic and international money transfer transactions, M-PESA accounted for $130 million in revenues. Presently, it boasts of over 20 million subscribers and processes mobile banking transactions for over 70% of the country’s adult population of 14 million.
M-PESA success is giving ideas to the Central Bank of Nigeria (CBN) which has staged a huge and ambitious “Cashless Economy” for Nigeria based on mobile banking. Obviously, for a more populous nation as Nigeria, the potentials for financial transactions through the integration of financial services with mobile telephony are vast, and all tempting. The rush for gold has just started!
Many Mobile banking platforms have sprouted, with such visible brands as Paga (Pagatech), PocketMoni (eTranzact), VCash (VTNetwork), U-Mo (UBA) and IBTC MobileMoney gaining top of mind awareness among consumers.
Other brands and players, less visible but equally operating, just starting up, or recently licensed include M-Kudi, PayCom, Eartholeum, Fortis, Monitise, GTBank, EAZYmoney (Zenithbank), Chams Nigeria, Corpereti Services, Parkway, First Bank, EcoBank, etc.
According to Dele Ogundahunsi (@deneri), a field marketing professional in Lagos, “Nigeria is not Kenya and at the risk of sounding fatalistic, some of the emerging brands may either fizzle out even before they reach the market or die without ever breaking even. While this may sometimes be due to challenges of inadequate financing and technology, the greatest challenge which may sound the death knell will be Marketing.”
Source: IFC, Mobile Money Adoption Life Cycle
How should the mobile money brand that will succeed talk and sell to disparate, yet profitable segments of the consumer market?
Beyond media (or mass) advertising, a more targeted approach should be employed. A consumer in Ikeja, Lagos, who wishes to use the mobile money platform to pay for say groceries bought at a supermarket, utility bills, or transfer money to a child in school, will be different from a farmer in Arondizuogu in the East, who needs to remit advance payment for genetically-modified seedlings, to a middleman in Onitsha. The demographics and psychographics are different and one should rather recruit or convert the farmer through someone who has a strong influence on him. This could be a traditional head in his town, or the leader of his farmers’ association; influencer relations, rather than media advertising should be strong here. One may thereafter sustain one’s efforts with tactical radio and television spots.
Again, in deploying their services, mobile money brands must profile their consumers and tailor particular services to specific segments. In addition, segment-specific benefits must be emphasized in their communications.
Technology is never static. The mobile money brand that will breast the tape of market leadership in Nigeria will not wait for the next five years before questioning the present technological platform on which mobile money operations are deployed. Can the rural market woman conclude her transaction on that phone by following voice prompts, rather than looking stupid while asking someone else to help decrypt SMS instructions? Can that mobile money brand, in conjunction with a telco or a mobile hardware manufacturer (say HUAWEI) start now to outsource product design alternatives to a tech geek somewhere in India and be the first to reach the market with this innovation?
There are currently 18 mobile payment operators in Nigeria. However big Nigeria is, there will be later on the road strong consolidation in the market, and the “weeding out” period might come in 3 years from now. The first in class will win big, and overall will be left roughly 3 main operators. The Time to compete for a category leadership is now. Competition is good! May the best player win in the interest of Nigeria consumers.