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Why Subscribers Ignore Mobile Money

Phone users have remained passive to the mobile money initiative in spite of massive campaign by service providers

Isaiah Onwuanumba

Mobile Money Mobile operators in partnership with banks have launched mobile money services to lure telecoms subscribers. But the problem is that mobile users have remained passive to the initiative in spite of massive campaign. Telecoms customers who spoke to The UNION said they have little faith in the existing a communications platform that is plagued by perennial poor quality of service and unaccounted credit deductions and sharp practices at the expense of the phone owner.

They added putting money in the hands of service providers who cannot be trust with call credits is risky. A Lagos-based businessman, Frances Moses told our Correspondent that he would not use mobile money because of so many crime related activities surrounding telecoms service in Nigeria. “I do not used mobile money because I do not want any issues that concerns fraud. There are a lot of fraud related activities surrounding telecoms service.’’

He noted that “I could mistakenly press something on my phone and telecoms operators would beginning to deduct say N50 from my phone every week or every month.” A number of others share his views while a lot more expressed ignorance of Mobile Money policy. For the record, Mobile Money is a payment solution that enables users pay for goods and services with their mobile phones. Mobile Money is one of the epayment solutions available to Nigerians in a cashless Nigeria. It is at the core of the Central Bank of Nigeria’s (CBN’s) cashless or cashlite policy.

There are Operator Branded Mobile Money and Provider Branded Mobile Money. The former is a value added service offered by a network operator. Network operators do not have mobile money licenses, but through partnership with licensed mobile money providers, financial intuitions, payment processors, and merchants they can offer mobile money to their subscribers. MTN Mobile Money is an example of an operator branded mobile money offering.

The major advantage of operator branded mobile money service is that the mobile money application resides in SIM, removing the need for downloading any application. Because operator branded mobile money resides in the SIM, any mobile phone can use the service, from the cheap N2,000 phones to the highest ends of mobile phones.

However, the latter or Provider branded mobile money services are those offered by companies licensed by CBN to offer mobile money services. Because these companies do not own the network, they cannot place their applications on the SIM and will always have to partner with numerous networks to rollout mobile money services. The only downside of most provider mobile money services is that the require user to download and install an application. Examples are QikQik, PocketMoni, and U-Mo Mobile Money.

Though Nigeria’s Gross Domestic Product (GDP), population and mobile telephone penetration of about 136 million subscribers are the largest in Africa, majority of rural businesses are not using the service in Nigeria. Enhancing Financial Innovation & Access (EFInA) noted that “out of a total demographic sample of 93.5 million adults, only 33.9 million are banked, while the others are either financially excluded totally, or are engaged through informal financial channels .” General Manager, corporate affairs, MTN, Funmi Onajide said that the current operation of mobile money in Nigeria is bankled.

He added that “essentially, this means that approximately, only one in five Nigerian adults has a bank account, with approximately one bank branch and one ATM for every 10,000 people.” Head, Marketing and Strategy at Ericsson, Mr. Shiletsi Makhofane said at Digital Agenda for Africa that banks and telecoms operators in Nigeria and rest of Africa must invest in infrastructure that would help in leveraging on the opportunities to address the challenges of the unbanked across the continent. The Central Bank of Nigeria (CBN) introduced the policy on cash-based transactions in 2010, which has been implemented in Lagos, and is being spread to other states and communities.

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