Dotun Akolade, a digital payment expert, who is also an Associate Director at OPay, a top payment services firm, talks about the growth in digital payments services in Nigeria. Riding on his impressive experience in successfully selling payment solutions and SaaS products to large corporate organisations, local chain stores, closing deals with the likes of Microfinance banks, SMEs, large retail stores, logistic companies, and transport companies amongst others; he projects into the future of payment services in the country in this interview.
Digital payment platforms or fintech witnessed a surge in capital injection recently. What are the factors facilitating this impressive capital injection?
A. No doubt legacy banking institutions in Nigeria have made a massive investment in closing the gap between those who have access to banking services and the unbanked. Despite the $9 billion investment channeled into the sector many segments especially people in rural environments who had little access to banking services due to infrastructure challenges, and the SME segment which insistently aspired to conduct trading and receive payments beyond the brick and mortar structure across different time belts were underserved. As of late 2021, around 36% of the local adult population was unbanked. Meanwhile, as internet connectivity and mobile telephony networks extended coverage miles, the novel fintech firms rode smoothly on their backs to bypass the infrastructural gap that had long prevented the legacy banks from penetrating the rural spaces or successfully catering to the strong SME segment. A fitting policy framework was also developed at the regulatory level to enhance the effective operation of these fintech firms. Considering the large SME segment and the rural population that the fintech firms leveraged to pilot their services, growth was quick. Besides, the COVID-19 restrictive guideline policies also accelerated digital payment services uptake locally. Of course, investors value high-growth market segments. As it stands, sustained growth momentum in digital payment services will continue to aid financial inclusion and MSME thrust – as well as attract more capital injection in the space.
Considering the robust capital injection into fintech firms lately, what is the performance level of digital payment services currently?
A. There has been an impressive uptake in digital and real-time payment services in Nigeria. E-commerce especially is thriving in the country because of the widespread e-payment or digital payments infrastructure provision enabling their trading activities. You must have also noticed the growth in the number of roadside POS merchants around the urban and rural areas. They keep creating jobs for the unemployed. Without the democratization of banking services through the licensing of new digital payment platforms this robust economic contribution wouldn’t have been possible. Reportedly, the country has been able to unlock $3.2 billion in economic activity which represents 0.67% of the GDP through the activities of the digital payment services providers.
What does the future of digital payment services in Nigeria look like?
A. Digital payment service providers have extended their product offerings beyond processing payment transactions for users. These firms now offer savings, wealth management, retail lending, personal financing, investment management, and MSME lending services. There are over 200 payment services solutions providers besides fintech services offered by banks, operating in Nigeria. A growing youth population and an evolving regulatory environment to curb bad practices would see the payment services ecosystem continue to thrive.
You have a firm grasp of the payment services landscape. Can you tell us briefly about your background in the industry?
A. I’m currently an Associate Director, Offline Merchant Acquiring at OPay. Prior to joining OPay, I had worked acrossthree commercial banks. I joined OPay in 2019 and contributed to the building and management of the OWealth savings product portfolio which later experienced a 25% growth within 6months. I was able to attract different business owners to invest in our long-term savings scheme and the savings product is still one of the best in the industry due to its flexibility and attractive return on investment. In the third quarter of 2021, I was part of the team that birthed the Offline Merchant Acquiring business and led the Lagos regional arm of the business. I was responsible for selling our various payment solutions and SaaS products to SMEs and large chain stores. I established several partnership deals with Microfinance banks, large retail stores, logistic companies, transport companies and numerous small businesses amongst others.
Having on boarded well over 20,000 merchants generating transaction volume to the tune of $100m today. With the recorded success in Lagos, I was assigned to start the offline merchant acquiring business in several other states in the country. I built team structures, jointly designed CRM tools for customer management and staff efficiency, developed business relationships and closed numerous transactions across different industries within short timelines. The business generally has experienced a steady growth since inception and a lot is still being done to improve our market position and expansion in the country.
Finally, what is your long-term goal in the industry?
- My long-term goal is to be one of the leading business experts in the Financial Technology industry of the World. I intend to offer my wealth of experience and deploy the business skills I have acquired over the years to grow as many start-ups as I can and create as much employment as I can in Africa
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