How digital wallets have boosted financial inclusion in Nigeria   

Digital wallets are being projected to become the future of mobile payment.

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Nigeria’s payment space has taken giant strides towards becoming cashless. This is largely due to the pandemic which redefined the payment experience for a growing number of people and also made various payment services easily accessible.

With the adoption of digital payment methods such as internet banking, mobile banking, Unstructured Supplementary Service Data (USSD), banking cards, etc., mobile payment in Nigeria has been growing steadily over the years.

The advent of digital wallets has further helped to bring Nigeria closer to becoming a cashless society and deepen financial inclusion in the country. Recently, we have seen the emergence of different digital wallets that have been created to bridge the financial exclusion gap, while making financial transactions easier.  According to a report by Statista, as at 2020, about 10 percent of digital payments in Nigeria were transacted through e-wallets.

What is a digital wallet?

Imagine your normal physical wallet in your pocket; you keep money in it, and whenever you need to buy something or pay for a service, you take it out, remove cash, and make your payment.

A digital wallet, or e-wallet, serves the same purpose as your physical wallet but in an electronic form. Digital wallets allow users to make cashless transactions when shopping online, making in-store purchases, paying bills, sending or receiving money, etc. with their smartphones.

What they are saying?

In a telephone chat with Toyosi Yusuff, a Marketing & Communication expert in one of the leading tech companies in Nigeria, he stated that there had been increased adoption by upwardly mobile, tech-savvy Nigerians—especially those between the ages of 18 and 26 years.

He emphasized that e-wallets had helped tremendously to manage online spending. While speaking on the challenges, Yusuff stated that trust was still one of the biggest challenges to the adoption of e-wallets in Nigeria. “Young Nigerians are still unwilling to risk their funds with ‘unstructured’ fintech companies,” he said.

Digital wallets in Nigeria

Here are a few digital wallets available in Nigeria:

Paga: Paga is a mobile payment company that enables people to digitally send and receive money by creating simple financial access for everyone. Founded in 2009 by Tayo Oviosu, Paga acts as a mobile wallet where any user equipped with a mobile device can conduct transactional activities using their device. With Paga, customers are able to deposit and save money, purchase prepaid phone credit, pay utility and cable bills, and make payments to retailers. Paga dominates the Nigerian e-wallet platform with over 17 million customers. It also offers basic banking services such as savings accounts, wire transfers, and merchant services.

Wallets Africa:  Wallets Africa lets users send and receive money, and make payments through their phones. Users can pay directly into bank accounts and pay utility bills in Nigeria from the app or website.

Founded in 2016 by John Oke, Wallets Africa also lets you create a virtual dollar card on their platform. These dollar cards can be used elsewhere for various kinds of payments, mostly international payments that may not be possible with local cards. It gives users a unique transaction experience and makes financial services more accessible to the under-banked.

GetBarter: GetBarter helps users to easily send and receive money instantly at no cost. Users can carry out bills payments directly on the app. It also allows users to create a virtual dollar card and a gift card for international transactions. GetBarter is owned by Flutterwave, a payment platform.

Chipper Cash:  Chipper Cash enables cross-border payments and money transfers within and between different African countries. Besides money transfer, it can also be used to pay bills (cable TV, internet, and electricity) and purchase airtime. Launched in 2018, the company offers mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa, and Kenya. Chipper Cash has over 3 million users on its platform and processes an average of 80,000 transactions daily.

  • E-wallets are inherently more secure than physical wallets containing cash and debit cards that could get stolen or misplaced, thereby causing great distress to the owner. Also, your phone has security measures like passwords and fingerprint scanning to prevent other people from accessing it. Furthermore, the financial data carried in your digital wallet is itself encrypted.
  • The emergence of COVID-19 has made digital wallets the best way to go cashless in today’s world, as they are easier to use than traditional payment methods.  One can easily perform transactions from anywhere by using a smartphone, tablet, desktop, laptop, or other similar devices.
  • Though mobile payment is still an emerging market, the future of financial transaction is mobile, and more people are rapidly adopting this trend. With digital wallets international transactions could be made less cumbersome, currency conversion during the transaction will be easier, and it is less prone to fraud.
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