In Nigeria, the dominance of cash in financial transactions is likely to persist unless our financial institutions make substantial investments in technology and earnestly embrace the realm of digital banking.
The persistence of challenges in establishing a fundamental and robust infrastructure for seamless digital transactions raises questions about our commitment to securing a formidable position in the global financial landscape. This becomes particularly concerning when even the banked population encounters difficulties accessing real-time information about their funds.
The underbanked and unbanked populations, crucial demographics for financial inclusion, may find it hard to place trust in financial institutions that are still grappling with the real-time assessment of existing account holders’ funds.
End-user costs must also be reduced significantly when developing financial inclusion products. Our current approach, which involves exchanging data without significantly expanding the user database, must be changed in order to validate concerns about the industry’s current approach.
While we have made commendable progress in implementing seamless and instant payments, accompanied by a noteworthy reduction in transaction costs, there remains a critical need for further inclusivity. The existing real-time infrastructure, facilitating the flow of billions of dollars annually, must be broadened to ensure accessibility for all.
Despite these achievements, the African fintech ecosystem grapples with three pivotal challenges that hinder the ease of payments for both businesses and customers:
Speed of transactions: Efforts should be directed towards enhancing the speed of transactions, ensuring that financial interactions occur in real time.
Cost of transactions: Initiatives aimed at minimizing transaction costs will contribute to making digital payments more affordable and attractive to a wider audience.
Transparency of transactions is crucial to foster trust among users and promote a more open and accountable financial ecosystem.
In summary, while Nigeria has made strides in the digital payment landscape, there is a pressing need to address these key issues to facilitate a more inclusive and efficient financial environment.
Igbaroola Olakunle, Co-founder/CEO, Westpay Global Resources
