FNB Connect is the new “virtual mobile network” launched by the South African bank that aims to compete in the telco space in the country. Meanwhile, M-Pesa is the mobile money platform, owned by Kenya’s Safaricom, that has reconfigured the financial industry in east Africa.
This is precisely why Nigerian banks, abetted by the Central Bank, made telcos couldn’t acquire independent mobile money licenses like in Kenya where they didn’t see Safaricom coming.
The lack of adoption of mobile money in Nigeria was caused by the initial indifference of banks and telcos towards the technology. Nigerian banks refused to support mobile money operators or encourage the customers to migrate to mobile banking for basic operations like airtime recharge. The recent attempts at mobile money by banks and telcos seems to be a medicine after death because most Nigerians don’t trust the technology anymore.
Only a deliberate policy push by the CBN can increase mobile money adoption. Let say CBN partners with NCC and enforces a “No Scratch Card” policy for starters. This is the only way Nigerians will be forced to adopt the technology.
What happened in Kenya is important. It started with the telco (Safaricom) being able to sneak in under the radar because banks didn’t really think what Mpesa was set up to be would be a threat. Plus, there are some big names in Kenyan politics who own substantial stakes in Safaricom. After the success of Mpesa, the banking lobbies (globally) have closed ranks against this kind of activity, trying to stop telcos from getting money moving licenses/approvals. Why? Because they rightly see that this new way of thinking about money and transferring it don’t require them as much, they’re being disintermediated.
If you look at what Equity Bank has been trying to do in Kenya you see what their answer is. Over the past 3-4 years they’ve created their own agent network (close to 18,000), which let’s them get away from the larger bricks and mortar building business of banks into the agent game. 2 years ago they started working with Airtel to get their MVNO license. Safaricom rightly sees this as a big threat, so they too are closing ranks against banks getting telco licenses.
@erik: Thanks for your post. I now understand the whole drama and politics. Shouldn’t banking or telco regulators open their sectors to innovation rather than quenching them or, better, partner to make such innovations mutually beneficially?
@Ndianabasi - The answer is yes, they should be opening this up. Especially if they were to get it to be open to third-party developers as it would bring the innovation that large companies can’t do on their own. However, both of these industries are also very control-oriented, so they don’t want to open it up and therefore they will only do so if forced to do so, or if they feel so much pain that they want to do it to stay alive.