New Text-Based Service Could Help Nigerian E-Payments Push
A group of financial services and telecom providers has banded together to launch a new mobile payment service to help increase electronic payments in Nigeria. Known as mCASH, the platform is a joint venture of the Nigeria Inter-Bank Settlement System, numerous Nigerian deposit banks and the country’s four main telecom providers: Etisalat, MTN, Airtel and Globacom.
Compatible with any smartphone or feature phone, mCASH enables users to make retail purchases via text message by entering a unique, eight-digit seller code assigned to a particular merchant that has registered with the service. Users can select from multiple bank accounts to fund purchases, and sellers and buyers receive transaction confirmation via text. Consumers pay a fee of N20 (US$0.06) for transactions below N10,000 (US$31.72), while purchases above that amount cost both merchant and customer a fee of N50 (US$0.16).
mCASH was developed in response to a mandate by the Central Bank of Nigeria (CBN), which has called for advancement of electronic payments in the country—Africa’s largest by population, with more than 173 million people. While the bank’s Cashless Nigeria project has been successful in increasing financial inclusion among Nigerians, the country’s merchants have been slow to migrate to electronic POS systems. Meanwhile, the popular M-PESA service, which has transformed payments in several other African countries—most notably Kenya—is not available in Nigeria. mCASH’s developers are hoping that the service will attract merchant users by obviating the need for traditional POS equipment and charging relatively low fees.