[this day] A banking expert and former Director, Banking and Payments System Department of the Central Bank of Nigeria CBN, Mr. Abayomi Atoloye, has stated that telecommunications companies will not be allowed to be the lead initiator for the mobile payment scheme in Nigeria.
Atoloye who spoke to THISDAY explained that this was to give an equal playing field to all the operators in the country as well as create a conducive environment for healthy competition amongst all mobile money operators.
There was confusion recently as to whether telecommunications companies are permitted to operate as mobile money operators in Nigeria. The Regulatory Framework for Mobile Payment Services in Nigeria issued by the CBN in 2009 identifies three acceptable models for the implementation of mobile payment services - Bank Focused, Bank led, and Third party led.
The framework explicitly exempts telecoms firms from leading a mobile money scheme. The framework says telecom firms are required to ensure that subscribers are free to use any mobile payments system service of their choice; not receive deposit from the public except in respect of the prepaid airtime billing of their subscribers.
The framework does not allow the use of the prepaid airtime value loaded by their subscribers for purposes of payment or to transfer monetary value, especially as telecom firms stand to benefit significantly from the success of mobile money in Nigeria. This is because most of the transactions will be going over their networks.
Atoloye said that the framework is crucial because the aim is to prevent monopoly of the operations by the three leading GSM operators in the country. He added that if given the chance, there was the possibility that the larger network would dominate the mobile payment system since they have access to the larger percentage of the population as well as the infrastructure for the deployment of the new payment system. He said that there should not be a situation where a telecommunication company will limit its service to only its subscribers because there should be competition among the operators to guarantee best service to the people
Industry analysts believe that the decision was made because the CBN does not regulate telecoms companies and if the companies are allowed to lead mobile money, it will be putting two major segments of Nigeria 's economy in the hands of a few companies, a situation which is said to be risky to Nigeria .
In November 2010, the Central Bank of Nigeria granted Approval in Principle Licences to 16 companies to operate a mobile payment scheme in Nigeria . These operators were required to run a 4 month pilot from December 2010 - March 2011, after which, upon review, full operational licences are to be issued. The CBN has now concluded its audit of the 16 companies and is expected to issue full operational licences this month to those it deems as ready to launch.
The 16 operators that received an Approval in Principle from the CBN in November include: Stanbic IBTC Bank Plc, Ecobank Nigeria Plc, Fortis MFB, UBA/Afripay, GuarantyTrust Bank Plc/MTN and First Bank of Nigeria Plc. Others are Pagatech, Paycom, M-Kudi, Chams, Eartholeum, E-Tranzact, Parkway, Monitise, FET and Corporeti.
Why Telecoomunications Companies Can't Lead Mobile Payment Schemes - Expert