Visa set to intensify mobile payments competitive landscape in Nigeria

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Multinational financial service provider Visa has announced the plan to launch mVisa mobile payment service in Nigeria in association with banks by end of 2016. The QR code based payment system will work on smartphones as well as feature phones by entering merchant account number. Payment is directed from customer Visa account to merchant account without third party involvement. mVisa agents will provide domestic remittance and cash withdrawal services also. No additional hardware will be required at merchant location to accept mVisa payments.

In Nigeria, bank account holders amount to 25 million whereas there are 148 million mobile phone subscriptions. Around 40% adult population of the country is unbanked and 70% transactions are cash based. In order to increase financial inclusion within this section, Central Bank of Nigeria (CBN) drafted National Financial inclusion Strategy and licensed 21 companies to provide mobile payment services in 2012. Agency banking was also promoted to facilitate mobile payments through third party association at various locations. However, these efforts have yet not yielded desired financial inclusion level in the country. Higher investment requirement for agency outlet setup along with short term investment focus have resulted in lower adoption level of mobile payments.

Visa on the other hand has come up with a low cost and convenient payment solution which will benefit consumers and merchants. Elimination of additional hardware requirement along with faster payment access is likely to give tough competition to existing players in Nigeria. Overall service line facilitating payment during online purchases and access to funds in a convenient manner is expected to increase adoption level of mVisa among consumers.

The Nigerian mobile payment market is expected to record a CAGR of 64.0% from 2016-2020 to reach US$ 39,284 million in transaction value terms by 2020, increasing from US$ 5,426 million in 2016. In 2015, the market registered a growth rate of 82.1% over 2014, to reach US$ 3,097 million.

To know more and gain deeper understanding of mobile payment industry in Nigeria, click here.