eTranzact says it is on track to explore the network of the Nigerian Postal Services to reduce the unbanked population in the country to 10 per cent before the end of 2016.
The e-payment solution provider stated this while responding to an enquiry by our correspondent on why it abandoned its 2008 agreement with NIPOST to drive the growth of mobile money services and subsequently reduce Nigeria’s unbanked population.
Results from a total demographic study carried out by the Enhancing Financial Innovation and Access showed that from a sample of 93.5 million Nigerian adults, only 33.9 million people are banked – while the unbanked are 59.6 million.
However, eTransact’s Chief Executive Officer, Mr. Valentine Obi, said that the network of postal outlets operated by NIPOST constituted the most widespread retail network in the country to boost financial inclusion, “especially in reducing the unbanked population to about 10 per cent (about 5.9 million).”
Speaking to The PUNCH on the sidelines of eTranzact’s rebranding and strategic repositioning across its markets in Lagos, Obi noted that the company altered its partnership with NIPOST because “the infrastructure was lacking.”
He said, “At some point, we used them (NIPOST outlets) within Lagos area, but it fizzled out. But we are ready to go ahead, having realised that proper implementation of mobile payments systems in the financial sector can help banks reduce cost incurred on customers by 70 per cent.”
The Minister of Communications, Mr. Adebayo Shittu, had earlier stated that the postal financial services should also be delivered in partnership with banks, telecoms companies and other Information Technology companies.
He said that the Federal Government was working to leverage NIPOST to drive financial inclusion in the country, saying that the government would select transaction advisor and select partners in the scheme.
The minister said that mobile money, mostly used to buy airtime, had the potential to serve as a platform for drawing more people into formal financial services.
“More people in Nigeria have a mobile phone than have a bank account. Today, 75 per cent of adults living in urban areas and 39 per cent of them living in rural areas have access to a pre-paid mobile phone. Also, 18 mobile money operators have been registered in Nigeria since the commencement of operations,” Shittu added.
Meanwhile, Obi, who noted that eTranzact processed over $30bn from 110 million transactions on the platform, said that financial institutions must be innovative to meet the growing number of customers.
Obi said that players must embrace technology and innovation to bridge the gaps of unbanked population in the country.
“Mobile has become an integral part of human beings. A tool we cannot do without. eTransact processed about 110 million transactions worth over $30bn in 2015. The platform has remained Africa’s leading provider of mobile banking and payments, with over 80 per cent of Nigerian banks employing the platform to carry out different transactions.
“We have come to discover that mobile payment has the capacity to reduce the cost of serving customers by as much as 50 per cent to 70 per cent, if properly implemented,” he added.