Nigerians are increasing   patronising money services to make payment and access financial services, despite   debate over the  methodology adopted by the Central Bank of Nigeria (CBN).

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In 2009, as part of efforts to promote electronic payment the CBN introduced the mobile payment framework.

The framework is to guide the business of mobile money, which is the use of mobile phones for payment and to access financial services.

Thereafter, the apex bank issued mobile money licenses to 16 firms/consortia namely Stanbic IBTC Bank Plc, Ecobank Nigeria Plc, and Fortis MFB.

Others are UBA/Afripay, GuarantyTrust Bank Plc/MTN and First Bank of Nigeria Plc, Pagatech, Paycom, M-Kudi, Chams, Eartholeum, E-Tranzact, Parkway, Monitise, FET and Corporeti.

The framework however restricted the participation of mobile network operators (MNOs/Telcos) to provision of infrastructure to banks or licensed mobile payment operators. Specifically, the framework banned Telcos from receiving deposits from the public except in the respect of prepaid air time  time billing of their subscribers.

It also disallowed  the use of the prepaid airtime value loaded by their subscribers for the purpose of payment or to transfer monetary value. This restriction has been faulted by some financial experts and the Telcos as well. “It is wrong to prohibit MNOs, a key stakeholder with significant resources and national outreach, from directly participating in the mobile money sector”, said Robin Hofmeister, a payment specialist with the World Bank.

Addressing a gathering of electronic payment experts recently, he recommended that the CBN should revise the 2009 regulatory framework for mobile payment services to level the playing field and intensify competition, particularly by allowing MNOs to be licensed as mobile payment system operators (MPSOs).

Prior to this recommendation, Tunde Kuponiyi, Director, Tele Banking, Globacom, had made a case for increased participation of Telcos in mobile money services. He said mobile money is a telecommunication-driven retail network, hence the need for a bigger chunk of the business for the telecom firms.

Emmanuel Obaigbona, Deputy Director/Head, Payments System Banking Operations Department, CBN,   however defended the decision of the apex bank.

Speaking at a mobile payments services regulatory framework dissemination workshop, he said, “the restriction among other things is  to ensure that larger networks are not given undue advantage based on their wide coverage hereby excluding other payments service providers from access to their customers. It is also to ensure that all mobile payment traffic are given equal priority during transmission by the Telcos without prejudice to their own consumer generated traffic.

Nigerians however seems to be more interested in the convenience and comfort of using their mobile phones to conduct transactions than the debate over the restrictions of telcos. A testimony to this was unveiled by Paga, one of the companies licensed by the CBN to render mobile money services.

Last month the company announced the achievement of one million users on its mobile payment platform, the first by any mobile payment company in the country.

Providing more insights into the growing adoption of mobile money by Nigerians, Tayo Oviasu, Chief Executive Officer and Founder of the company, said,  “Since inception two years ago,  Paga  has processed 4.4 million transactions worth over N47 billion, with a 33 per cent active user rate, which is higher than industry norm.

Paga recorded 874 per cent growth in number of  users from 40, 354 to 381,972, and as at now it has recorded 162 per cent growth in 2013, to over one million. Presently 12 people make transactions on Paga every minute. This achievement, he said, makes Paga the fastest growing mobile payments company in the country and indeed Africa.

Established in 2009 with products targeted at the critical needs of Nigeria’s growing cashless economy, the company’s growth was achieved with constant product innovation, a rapid growing team spread across the country, over 800 merchants, and over 3,500 agents in 150 cities in 25 states nationwide.

According to Jay Alabraba, Co-Founder of Paga, The company’s growth is a vote of confidence for the mobile money framework adopted by the CBN.  He said, “Paga’s reaching one million users is a noteworthy achievement not just for Paga but for the entire industry and the CBN, whose financial inclusion and cashless economy vision we wholeheartedly support.

It confirms the significant growth prospects for mobile payments in Nigeria and the country’s willingness to key in to convenience that platforms like Paga provide. We are proud of the achievement but building sheer numbers has never been Paga’s goal.

Our goals are to bring efficient payment systems to all Nigerians, banked or unbanked, and deliver low cost banking services to the mass market. Through our agent network, Paga will continue to educate and empower communities across the country by providing convenient access to financial services. “

A similar sentiment was expressed by the umbrella body of licensed mobile payment operators, the Association of Licensed Mobile Payment Operators (ALMPO).  Chairman of the Association, Dara Owolabi, noted, “In an industry that is struggling to find its footing, Paga’s achievement  is welcomed news with optimism for the future of mobile payments.”

He concluded with a subtle reply to the critics of the framework adopted by the CBN. “The topic of mobile payment adoption in Nigeria tends to elicit a somewhat mixed reaction of real-life application but we are happy to see the numbers starting to paint a very different picture.

More and more service is being validated by growing industry figures, proving that the bank led model chosen by the CBN is working and is the best way forward for Nigeria. It also shows that Nigerians are ready and eager to adopt new payment channels.”