The GDC Blog

Helix Institute of Digital Finance has recently published a report on mobile payment in Nigeria. Based on interviews with mobile payment agents, the research points out that aside from regulatory uncertainty — which led mobile payment providers in the country to speculate about the rules instead of fully engaging in expanding business — insufficient identity verification is a main problem that hindered the development of mobile money in the country.

According to the report, most of the mobile payment customers in Nigeria still remain at the lowest identity registration level, which requires only a name and a phone number to activate, but limits the amount per spending to as low as 18.5 USD. This results in the frequent need to divide the bill in order to complete a transaction, giving the agents more commission at the customers’ cost. On the other hand, the information gathered in low-tier, sim-card based registrations is often not properly checked in an identity verification system, leaving the security of transactions at risk. Overall, the current insufficiency in identity verification is bringing down the quality of mobile payment service in Nigeria, and preventing broader business development.

In order to tackle this problem, efforts from various directions are called for. Agents — who are the first point of contact for end users and are carrying the brand for providers — need training and permission to initiate higher levels of identity registration. This requires combined work from both the providers and regulators. Efforts also need to be made to motivate customers to go for higher tiers of identity verification and increase their spending limit. On this point, marketing campaigns on both electronic media and point of sale should be utilized to give people more exposure to mobile money, as the general awareness among Nigerian public still remains at a low level.

To read the full report, please go to: