The future of payments in Nigeria is all but certain these days. It is evident that mobile will play a significant role in the future way of paying for goods and services, though. mCash could become a major competitor to Bitcoin over the coming years, although it remains to be seen how popular the service will be.
Nigeria Focuses On Alternative Payment Systems
It is rather strange to see Nigeria, of all places, focus on alternative payment systems. This solution, however, makes use of the Nigeria Inter-bank Settlement system and is a project put together by various banks in Africa. mCash, as this method is called, wants to bring financial services to everyone in the country.
The primary objective of this initiative is to bring alternative payments to small and large businesses in Nigeria. The system is already available to over 28 million bank account owners, even though there are plenty of people with no access to such services. Keeping in mind how this solution can be accessed on both smart and feature phones, mCash has a fair chance of becoming popular in the coming years.
This news comes at a time during which electronic payments are starting to take off in the country. As is the case with any successful venture, however, certain issues need to be addressed. For example, the number of Point of Sale Terminals in the country is much lower than financial experts would like to see.
The lack of success of POS terminals is easy to explain; high costs, a devaluing Naira, and poor GPRS infrastructure make it very difficult to operate these machines. On top of that, there are high participation fees, leaving very little breathing room for store owners to make a profit. In fact, some merchants go so far as to claim that owning a POS terminal in Nigeria is outright unprofitable.
Whether or not mCash can avoid the same pitfalls as other electronic payment efforts in Nigeria remains to be seen. It heavily relies on having access to a bank account which will exclude a big part of the country’s population. Financial inclusion should be the top priority, yet mCash fails to provide that in its current state.
So far, it seems that Bitcoin and cash remain the two only options providing financial inclusion to all Nigerians equally. Bitcoin has a certain advantage, as the cryptocurrency can be stored and transferred across mobile devices with ease. Then again, it remains somewhat of a niche product, leaving the market wide open for other alternative financial tools.
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