With Nigerian businesses struggling because of coronavirus lockdown measures, the use of mobile money and “no touch”, cashless transactions in business is growing rapidly. The use of mobile money grew by almost 15 percent in March, and experts say the practice is expected to become even more common as the pandemic continues.
“Cashless Payments Only” is an inscription at the entrance of Washme laundry in Nigeria’s capital, Abuja.
Laundry manager Paul Godiya says it’s a recent measure to limit physical contact with cash to prevent the spread of COVID-19.
“There are different people that come here from different places and money is generally accepted which is coming from different people and is circulating from different angles. It may be that Mr. A has this disease or Mr. B has this disease. So, in the process of circulating it may get to me and affect me,” Godiya said.
With more businesses like this Abuja laundry switching to payment technology to ensure health and safety during the coronavirus pandemic, the mobile money industry is experiencing significant growth.
Analysis by the Nigeria Interbank Settlement Scheme (NIBSS) shows mobile money transactions went up by 14.5 percent between February and March – a period when the virus was first reported in Nigeria.
Mobile money agents like Isaac Odah, whose business has been booming say the trend has continued to increase since the pandemic.
“We are rendering essential services, so our services are not something you can do without because people transact, people pay for one or two things every day, and will need money to carry out such transactions. That’s why our services are booming during this pandemic,” Odah said.
As Africa’s largest nation, Nigeria is a huge market for mobile money and financial technology operators. But for many years restrictive government regulatory policies limited investment in this sector.
In 2018, Nigeria’s Central Bank relaxed the restrictions, with the aim of having 80 percent of Nigerian adults use mobile money by 2020. Last December, it issued license to fifteen mobile money operators.
Financial technology expert, Raphael Inusa, says the pandemic could fast track this goal.
“There has been a steady growth or increase in the fintech sector. And even way before the coronavirus hit Nigeria, the fintech sector had attracted a lot of foreign investments, from VISA investing in Interswitch, to Flutter wave to several other fintech companies. But the coronavirus pandemic has accelerated a whole lot, we now have increased transactions online,” Inusa said.
Apart from favorable government policies, the expansion of Nigeria’s internet penetration by about 20 percent in the last two years is also enabling the mobile money industry to thrive in the West African nation.