In the mid of market stalls in Misau, a community in Bauchi State, Musa Abubakar, a 41-year-old dealer in all kinds of rappers, shuffles between accepting cash and money transfers through mobile phones from customers to complete sales daily.
Thousands of customers who troop to dealer’s stall to make purchases frequently offer to pay through the mobile money payment system only to be greeted by Abubakar’s dogged willingness to authorise the payments via mobile money channels.
Despite Abubakar’s semi-literate background, he accepts mobile money transfers from customers without hesitation. He realised that he had to accept and incorporate digital payment systems into his business to satisfy customers and make a profit.
To Abubakar, this is the only way to remain in business and continue making profits to contribute to Nigeria’s economy and meet both personal and family fiscal needs.
The willingness of Abubakar to accept mobile money payments changed his business fortunes in the past five years. More customers from different backgrounds are eager to patronise him. This ultimately brought additional profit to him daily. He leverages the proceeds to maintain and expand his business.
LEADERSHIP Weekend learnt that Abubakar remains one of the few traders in Misau market that use mobile money. To him, the primary allure of mobile money lies in security. “It (mobile money) reduced my chances of becoming a victim of armed robbery,” he said piling his rappers in preparation to close business for the day.
However, while his experience is not without some glitches, it does not convince him to reject mobile money. “Most of my customers from the villages insist on cash payments because they do not have a bank account. This is the only exception,” he explained.
Yet, Abubakar remains optimistic. “It has reduced the burden of carrying large sums of cash around,” he maintained. Abuabakar’s sentiment depicts a growing awareness and potential of digital payment systems to drive financial inclusion and stimulate economic growth in northern communities.
But for many traders in Abubakar’s Misau market neighbourhood like Muhammad Auwal, a 38-year-old grocery owner, mobile money transactions remain a risk worth not taking.
“I have a serious problem with mobile money and digital payment platforms. One can easily be defrauded. I cannot bear this in the face of the current hard economic times in the country,” Auwal remarked with a frown.
He narrated a recent incident where a customer claimed to have transferred money to him using mobile money and showed a fictitious debit alert. “The man went with my goods but I never received the funds,” Auwal decried.
Trust in payment methods remains cardinal to Auwal’s daily business operations but mobile money eroded this. “Sometimes, you receive a credit alert, but the money will never accrue into your account,” he said.
Auwal’s most harrowing experience with mobile money was in 2019. According to him, he transferred N60,000 to a wholesaler in Kano for some items bought. “The money wasn’t credited immediately. The wholesaler refused to release the goods to me, and I had to scramble for cash. It took two weeks for the funds to reflect in his account,” he recalled.
Stories like Auwal’s are common among traders in Northern Nigeria who prioritise cash transactions for its reliability in their businesses. A 35-year-old smartphone dealer in Hadeja, Jigawa State, Musa Sarki took a firm decision against mobile money, always insisting on cash payments from customers.
Sarki’s scepticism runs so deep that he has made avoiding mobile money a part of his business strategy.
“I decline to sell to customers who insist on using mobile money to pay me,” he reaffirmed.
To other traders like a 39-year-old vegetable oil dealer in Hadeja, Zakar Shu’aibu, despite his familiarity with digital tools, he abhors mobile money payment. “It’s unreliable because of connectivity and too many instances of failed transactions. The most painful part is that, one might make a transaction; it would fail only to be debited later” he stated, reflecting the deep-seated mistrust of mobile money among business owners in Northern Nigeria.
Similarly, a poultry manager in Dass, Bauchi State, Hudu Ya’u, said charges associated with mobile money transactions are prohibitive and profit margins deflating. “The charges on transactions eat into profits,” Hudu noted. Financial strain discourages him from adopting the platform for retail or wholesale dealings.
Even those open to the idea of mobile money, like Hamza Hadeja, face logistical hurdles. “There’s a delay in the completion of transactions using mobile money. Sometimes, I have to go to bank branches because of network issues,” he said. These challenges of infrastructural enablers make cash a more dependable option for business owners and merchants in the north.
The different stories and experiences of traders like Musa Abubakar and Muhammad Auwal capture the delicate balance between opportunity and the risk that mobile money presents in Nigeria’s informal and macroeconomy. To Abubakar, the benefits, security and convenience, outweigh the drawbacks. For Auwal and many others, the fear of fraud, failed transactions, poor mobile network connectivity and delays keep them tethered to cash in their routine business operations.
Their stories illuminate the hurdles stalling adoption and the opportunities the mobile money system offers for traders willing to embrace it.
Until these issues are addressed, the road to widespread adoption of mobile money in Misau, Dass, Hadeja and indeed across business communities in Northern Nigeria, will remain bumpy. Trust, infrastructure and education must align to bridge the gap between potential and reality, ensuring that traders can transact with confidence in a digital age.
Nigeria Mobile Money Industry
In 2007, the Central Bank of Nigeria (CBN) introduced Mobile money to drive financial inclusion in the country. CBN’s mobile money regulatory framework, issued in 2009, allows for bank-led and non-bank led mobile money models in Nigeria.
Because telecommunications operators play a critical role in providing enablers and mobile network connectivity for the smooth implementation of mobile money, the Nigeria Communications Commission (NCC) was drafted to jointly regulate the sector with the CBN.
A Nigeria Deposit Insurance Corporation (NDIC) data shows that about 31 mobile money operators were insured. However, Chinese Fintech companies, Opay and Palmpay, controlled the largest share of Nigeria’s Mobile Money market. Both Opay and Palmpay have over 30 million active users.
In 2018, the CBN introduced the Payment Service Bank (PSB) licence for non-bank led mobile money providers which allows Mobile Network Operators to provide financial services. It demands that 25 percent of its operations be in rural communities to further deepen financial inclusion. In 2020, CBN PSB licenses were issued to Glo and 9Mobile. Two years later, it also issued a PSB licence to SmartCash, Airtel, and MOMO, MTN.
“Both SmartCash and MoMo have grown rapidly since receiving their PSB licenses, but there remains room for further growth. Airtel’s SmartCash had over 220 million mobile network operator customers in 2022, while MTN’s MoMo had over 77 million mobile network operator customers in 2023 – presenting a large target customer base. Mobile network operator-led mobile money providers offer a significant opportunity to grow financial inclusion in Nigeria. Mobile network operators’ large capital base, strong countrywide brand presence and technology collectively offer the ability to scale,” said GSMA, the global telecom industry body in its 2024 State of the Industry Report on Mobile Money.
Despite its potential to drive digital financial inclusion in Nigeria, the adoption and use of mobile money fluctuates especially in northern part of the country. Data obtained from Statista revealed that between 2019 and 2022, only about 5.6 percent of Nigerians aged between16 and 64 years, used mobile money platforms to receive, store or spend money. The rate of mobile money use increased to about 16.9 percent in 2023 but dropped to 8.1 percent in 2024.
But mobile money transaction value continues to grow unabatedly. The Nigeria Inter-Bank Settlement System (NIBSS) indicated that the transaction value of mobile money grew from N159 billion in 2015 to N527 billion and N555 billion in 2016 and 2017 respectively. The value rose to N1.37 trillion in 2020. As at August 2021 and 2022, the value of mobile payments in Nigeria stood at N719.4 billion and 1.8 trillion respectively. In 2023, the year for Nigeria’s general elections, the value of all electronic money transactions stood at N600 trillion.
Regulators React
Media aide to NCC executive vice chairman, Mr Johannes Wujuola, said NCC works tirelessly to ensure that mobile network operators provide strong and robust connectivity in the country to support the digital economy and digital payments which provide financial inclusion.
He explained that stakeholders in the sector explore several innovative solutions to provide stronger network infrastructures across the country.
Mr Wujuola added that the NCC would continue to ensure that the connectivity needed to support the digital economy is made readily available to all Nigerians.
He also blamed frequent incidences of fibre cuts in the country. He said in a year, 24,000 cuts were recorded, adding frustrating efforts of telecom providers to provide stable and stronger network connectivity needed for all kinds of digital payments. in Nigeria. 65 per day. “One fibre cut could affect many digital payment services.”
However, the acting director of corporate communications at CBN, Mrs Sidi Hakama, could not be reached for comments on the efforts of the apex bank to strengthen and improve the experiences of mobile money users in the country.
Several phone calls placed to her mobile line were not responded to. For instance, on December 3 this year, this reporter called her three times at different intervals without success. Also, a text message was sent to her line requesting a phone conversation on the issue but she did not reply. Similarly, on December 13, another phone call was placed to her mobile line but returned unanswered.
Expert Seeks Awareness
A professor of Accounting and Finance at the Abubakar Tafawa Balewa University Bauchi (ATBU), Bala Dalhat, said despite the challenges dotting Nigeria’s digital payment system, relevant stakeholders need to design an awareness campaign strategy targeting traders explaining the vitality of digital payment to their business.
He explained that incidences of cybercrimes, fraud and delayed remittance of money transferred into accounts affected the acceptability of digital payments among traders in the north. “Government must tackle cybercrime and fraud to boost and sustain the interest of people in digital payment methods in the country,” he said.
Prof Dalhat said printing naira notes is costly. “Digital payment is more affordable. Once you’re credited, you are confident that your money is in the bank. You can withdraw at any time you want.”
He also demanded an improved power supply and network connectivity to address hitches recorded in digital payments traders who are key active players in driving the digital economy in the country.
(This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop.)
