Adedamola Giwa, General Manager of JumiaPay Nigeria, the company’s digital payment and financial technology platform, gave some predictions about the future of digital payment in Nigeria for 2022.
This was disclosed to Nariametrics via a blog post by the newly appointed General Manager, he noted, “It’s been 5 years since I’ve come to grips with my predictions, and here again, these are my top 10 predictions for 2022. Although if any of them are carried out, I owe you a beer.”
Giwa in his predictions explains the various events that will shape the Nigerian payment platform in 2022. Below is a list of Giwa’s predictions for 2022.
1. A global giant comes to play. I will pay you with WhatsApp
Stripe came in 2020 to buy Paystack but not to play. But in 2022, my clouded eyes saw a world player coming to play a big role. But then why would a global player come along? The market is hot as hell. Alternative payment methods such as virtual accounts have proven very successful; API players such as OnePipe and Mono are doing very well and are charging data like smugglers, and finally, open banking will be operational once the standards are approved by the CBN. There is simply no better time to be here. My bets are on WhatsApp to return for payments within their chat app. WhatsApp is no stranger to payments; They have started, albeit with limited success, in Brazil and India.
2. MTN launches PSB. Only a few Super Agents were left standing. Top 5 Banks in Notice
I expected MTN to get its license and they did. Give me a round of applause! Karl, the CEO of MTN, is a ruthless executioner who, after the USSD beating the banks gave him last year, has more than enough incentives to do a good job. will. Never keep Karl behind your back. MTN will be driving its PSB with great power and amazingly superior customers, and it will quickly suck the oxygen out of the market. The expectation here is that I’m expecting a quick doom for super agents when MTN’s PSB is up and running. I am very curious as to who will nominate Carl as CEO of the bank; I smell some ex-orange EDs who know all the tricks of traditional banks and where to bury bodies.
Disclosure: I bought some shares of MTN and am rooting for them.
3. Transfers are free. Financial inclusion becomes a reality
I don’t know if this is a prediction or a wish list because even if he doesn’t want to go through on his own, I will dedicate a portion of my energy to her in 2022 to make her a self-fulfilling prophecy. The premise is simple – make transfers less than a certain amount free for everyone and you have a good chance of achieving financial inclusion for every Nigerian. CBN did this for the ATM and it worked (the bankers hated it though) and they might be tempted to do it next year as well. The last time the cost of transportation fell to the N10, the market jumped like drops of water inside hot oil.
4. Open Banking starts. API players are eliminated from the tree
CBN has been cooking this for so long that it almost burns on the stove. Finally, the standards are ratified, issued and assigned to banks to implement them within 10 days 😁. Now, Open Banking is more comprehensive, faster, and more secure than the APIs my friends are selling. And since only licensed players are allowed, the market could shake some old API providers out of the market the way the mobile internet has killed business centers (if you were born after I graduated, please ask your uncle).
Disclosure: I am a member of the Board of Trustees of Open Banking Nigeria and am closely associated with the regulatory effort to develop Open APIs in Nigeria.
5. Foreign exchange is going the way of crypto. P2P FX transactions enhance investment applications. CBN upset
CBN is like Nigeria’s financial bull, his hammer can crack the most intense head. They came after cryptocurrency earlier in the year, but they survived and went underground where hammers could not touch them. Then the hammer came after the forex charlatans. Just ask what happened to abokifx.com. But do we need foreign currency or how do I pay my subscriptions or buy Tesla shares? Since the need for foreign currencies has been rejected, some players may borrow a sheet of p2p game that held cryptocurrency in Nigeria. Could this be, in one step, the end of the Central Bank of Nigeria’s control of retail forex trading in Nigeria? While some investment apps may have received an injunction to prevent a CBN from locking their accounts, trust that they would throw a party if p2p could save their business model.
6. NIN is giving up BVN as the preferred identifier. CBN’s Fear About Data Has Come True
CBN is very concerned about how and what fintech is doing with BVN; Anyone with half a mind would be concerned about how easily BVN data could be obtained and misused. Therefore, they made NIBSS stress BVN; Unfortunately, there are no better alternatives to fintech. Well, the NIN came with newer data and broader coverage. The only problem is that NIN is government property which means that data security and privacy may be weak. Soon, a major breach occurs and DSS is called in to hunt down fintech founders.
7. Lending gets hot. Larger banks enter. The bigger banks are shocked.
Nigeria has a credit gap of N74 trillion, which draws attention to potential lenders. Although many lenders have taken advantage of borrowers so poorly that even regulators have to think about it, the demand for consumer and SME credit continues to rise. At least 5 of the top 10 banks, being the jealous type, would jump without looking, but with dire consequences. They will fail because their loans will be packed like corporate bank credits.
Disclosure: I’m deeper into technology lending than the Mariana Trench. And Sterling (Spectra), Access (QuickB), and FCMB (Credit Direct) did extensive consumer credit work before my last child was born.
8. The market is getting hotter. New unicorns are born. Old players die
2021 was a year of growth for the fintech market and the terms of a hot 2022 were set – the #1 API business model was proven (Mono and OnePipe raised $19 million between them); #2 CBN issued tons of licenses to new payment service providers; #3 The virtual account has become a major payment method, and #4 The people who collect the cash should show the growth of the investors. What do you think this spicy combination means for next year? The market becomes competitive like crazy; Fintech companies will use the dollars as weapons to hunt talent and do marketing; Big, highball fintech companies may start implementing their APIs directly, bypassing Mono and others. When the smoke cleared, the battlefield would be full of corpses. But I see that the new players win and are crowned as unicorns. And the older players? Anyone born before 2015 is likely to slip into oblivion.
9. Visa buys Interswitch
I expect this for the third year in a row; Maybe if I say it enough it will happen. Why do I think so? It only makes sense for various reasons; Naira is cheap all the time and Interswitch Fundamentals is based on Naira which makes it cheaper and because it is a mature fintech company, they cannot enjoy the 20x EBITDA multiplier that younger and younger fintech companies use to value them. But then, they are a giant, they control 90%+ of the ISO card traffic in Nigeria. The cute old Mrs. Visa owns 20% of it to begin with. Meanwhile, Mastercard continues to support Visa with its dominance of the Nigerian market, and even the previously shocked Verve is making a comeback. So, it makes sense that Visa would buy the adapter and make Verve become Verve by Visa (Ve by Vi, how does that even look?) but the kicker? Some long-term investors are eager to return the money to their limited partners, so they will be more than happy to sell to Visa and bid farewell.
10. You buy a MasterCard Etranzact
This prediction is related to the number 9 like the way my daughters relate to my surname. Once Visa buys the switch, Mastercard will have to find its way out of there faster than a cat slithering off a hot plate. Among the array of payment processors prevalent in Nigeria, only Etranzact remains a viable option for MasterCard since they have their servers everywhere called a bank. Most business owners will gladly get 3 times the premiums.