Mr. Bisi Onasanya, GMD, First Bank

Banks are coming up with new mobile money service initiatives, ahead of the January 2013 commencement date of the second phase of cashless economy, writes Emma Okonji

With barely three months to the commencement of the second phase of cashless initiative of the Central Bank of Nigeria (CBN), most banks that were licensed by CBN to operate mobile money in the country, are coming up with innovative online solutions that will boost the second phase rollout of the cashless scheme, designed to reduce the volume of cash flow in the country.

The latest of the solutions, known as FirstMonie, was launched penultimate week in Lagos by First Bank of Nigeria, to complement the earlier solutions launched by GTBank, UBA, among other financial institutions licensed by CBN to operate mobile money business.

As banks windup financial activities in the last quarter of the year, indications are rife that the CBN licensed mobile money operators are set to rollout full mobile money services in preparation for the second phase rollout of cashless Nigeria, as directed by the CBN.

CBN’s Mandate on Cashless

In order to enforce strict compliance on the cashless initiative, CBN had on June 1, 2012, made it was compulsory for Nigerians and all banks to embrace cashless. The apex bank insisted on new set of rules for withdrawals and deposits, for all banks and their customers.

According to the directive, “individual maximum daily cash withdrawal is N500,000. Corporate daily cash withdrawal is N3million. Penalty is 2 per cent charge for individual cash deposit above N500, 000 and 3 per cent charge for individual cash withdrawal above N500, 000. For Corporate, it is 3 per cent and 5 per cent respectively.

The objective of the policy, according to CBN, is to assist in meeting vision 2020 requirement, modernise Nigeria's payment system, reduce the cost of banking services, drive financial inclusion, improve effectiveness of monetary policy, reduce high security and safety risks, reduce high subsidy and curb corruption and leakages, aimed at reducing the amount of physical cash circulating in the economy, and encourage more electronic-based transactions.

CBN’s Projection
Having scored the Lagos first phase rollout of the cashless initiative, which began in January 2012 as huge success, CBN said it would commence the second phase rollout in five states and the federal capital territory, Abuja in January 2013. 

CBN commenced the first phase rollout in January this year, beginning with Lagos State for the pilot scheme of Cashless Nigeria, with a promise to rollout in other states of the federation in no particular order by 2013, based on the success of the project.
Head, Shared Services Office at CBN, Mr. Chidi Umeano, who had earlier given the hint on the second phase rollout, listed the states to include Kano, Federal Capital Territory Abuja, Ogun, Anambra, Rivers and another state in North East, which was under consideration.

The pronouncement by CBN, of the huge success of the first phase rollout and the fresh plans to commence the second phase rollout, no doubt, spurred banks into developing innovative solutions that will boost the success of the planned second phase rollout.

Banks’ Commitment and Preparation

Having seen the zeal in CBN in driving the cashless initiative, banks, especially the licensed ones, took it upon themselves to introduce various channels through which the initiative would be successfully and easily implemented. Some of the channels have to do with the creation of varieties of online payment solutions that are currently paying off.

First Bank Initiatives

First Bank of Nigeria, penultimate week, came up with the initiative to empower over 10 million customers within the first year rollout of its newly launched mobile money service called FirstMonie.

The bank said it would use the new financial service platform to reach out to the vast majority of the unbanked and the underbanked Nigerians, to enable them enjoy superior financial services.

Apart from the planned target of 10 million customers in one year rollout, the bank said it would engage the services of over 10, 000 human agents that would help drive its mobile money vision of the CBN.

With FirstMonie, Nigerians who have First Bank accounts and those without First Bank accounts can transact financial services, using a mobile phone.

The launch of FirstMonie, which was witnessed by FirstBank’s network partners including Globacom, Airtel, Etisalat and MTN as well as key stakeholders and executives of the bank, promises to complement the vision of the Central Bank of Nigeria (CBN) in transforming Nigeria into a cashless society.

FirstBank’s Managing Director and Chief Executive Officer, Mr. Bisi Onasanya, said: “FirstMonie services have been created with three principles in mind. The first is defined by how consumers receive money to fund their unique lifestyles; how consumers spend money for their unique lifestyle needs; and thirdly, the ability of the consumer to be informed and in control of their money.

He said the cashless Nigeria initiative, was a significant step towards reducing cash-based transactions and driving the provision and adoption of electronic financial services, and that the FirstMonie service would further promote cashless Nigeria.
Explaining how the service works, FirstBank’s Group Head, e-Business, Mr. Chuma Ezirim, said: “FirstMonie has been innovatively created to empower Nigerians, both banked and unbanked, providing them the most affordable, safe, trusted, fast and convenient access to doing everything they do with cash today.”

According to him, subscribers wishing to use the new FirstMonie service would first use their mobile phone numbers as their account numbers when carrying out the registration exercise. Registration is free, simple and secure, all a subscriber need do to sign up, is to dial *894# from the mobile phone and follow the prompts that come in a very simple procedure. Alternatively, subscribers can sign up online at www.firstmonie.com/imobile or at any FirstMonie agent location.

UBA Initiatives

United Bank of Africa(UBA), another licensed bank to operate mobile money, also deployed mobile banking services on its platform, with the introduction of its U-Mo product. Since the introduction of U-Mo this year, the bank said it had been a huge success and that more solutions would follow soon.

The bank had explained that the mobile banking scheme would provide it the opportunity to ensure that the over 55 million unbanked population in the country, were brought into the banking system. UBA had also said that the product would significantly support the Central Bank of Nigeria’s (CBN’s) initiative of increasing financial inclusion in the country.

UBA’s Group Managing Director and Chief Executive Officer, Mr. Philip Oduoza, said that the product would revolutionise the banking industry. “Just like the GSM changed the face of communications in the country, the U-Mo is also going to revolutionise the Nigerian banking system.  What we are trying to let people know is that you can now store your money on your phone and use it to transact business,” he said.

Other Banks’ Initiatives
Diamond Bank for instance, entered into partnership with one of the licensed mobile payment companies- Paga, to offer branchless financial services to Nigerian consumers.

The partnership was such that it would make it possible for Diamond Bank customers to link their bank accounts to their Paga accounts, which would permit them to perform mobile payment transactions on Paga directly from their bank account.
“Customers will be able to perform a variety of transactions including money transfers and bill payments. Over time Diamond Bank will leverage Paga’s agent network to offer its banking products to the unbanked,” the bank said.

Guaranty Trust Bank (GTB), in supporting the cashless initiative, launched a bouquet of easy, convenient and safe electronic banking channels, which include, Point of Sales (PoS) terminal, GTPay that is available to all GTBank customers for collection of payment made online by cardholders.

Other channels are Internet Banking and the GTConnect. The bank partnered MTN to provide mobile money service to its customers, using the telecoms operator’s infrastructure network.

It is the expectation of CBN and Nigerians that the planned second phase rollout of mobile money initiative will record another success, just like the first rollout, owing to the preparations and commitment of the country’s financial institutions.