The Country Director, VISA West Africa, Emezino Afiegbe, spoke extensively on the need for Nigeria to adopt relevant digital pay solutions that will further boost digital transformation across all sectors of the economy. Emma Okonji brings the excerpts:
How is the digital pay initiative in Nigeria shaping the lifestyle of today’s millennials who are the digital natives?
In our current research, we discovered that the millennials want things done faster than usual and they want to operate in a secured environment. So today’s digital pay solutions which VISA offers, are tailored to meet those needs of faster and secured operational environment. VISA as a global payment technology company, has been in operation in the past 60 years, and we understand the needs of the millennials in today’s digital world and the digital solutions we provide actually fit into their lifestyles and the solutions are equally helping them in maintaining the values of their lifestyles. So working with our financial institution partners, we are enabling the mobile phones with solutions that will make the millennials work faster and connect faster and with ease. So we have several mobile payment solutions that fit the lifestyle of the millennials.
Infrastructure is the key to driving payment solutions being offered by VISA, but dearth of payment infrastructure, as currently being experienced in Nigeria could be a hindrance to digital pay. What is your take on this?
In the global digital payment system, infrastructure had always been a source of concern, especially in emerging market where Nigeria belongs to. We have infrastructure like Point of Sales (PoS) terminal that are not working well because of network connectivity issues. From our findings, we discovered that there is a culture issue as to why some of the payment terminals are not functioning well. Some merchants, who are supposed to use the payment terminals, also lack understanding of the basic principles of the payment terminals and as such, they easily dump them at the slightest difficulties experienced during financial transactions. Again, the cash culture embedded in most merchants will always make them prefer dealing with cash. Some are also afraid of the security issues around digital payment channels. We need to educate people to create awareness because digital payment is a global thing and must be adopted fast in Nigeria. We need to educate the banks that deploy the digital pay machines, we need to educate the merchants that make use of the machines and the telecommunications operators that provide the connectivity backbone on which digital payment channels ride on. We also need simple payment solutions to drive digital pay, and that is exactly what VISA is providing.
How will broadband access enhance digital pay in terms of speed of connectivity?
High data connectivity is extremely key for millennials in the digital space. In Nigeria, demand for data is increasing and data connectivity is getting cheaper by the day. Today’s data trend is clear on accessibility and affordability because the millennials now have access to broadband internet at affordable rate. The rate is gradually reducing and it will reduce even more, with ubiquitous broadband access. Broadband in itself, especially the 4G LTE broadband, will drive faster connectivity, which the millennials want. It is of no use having slow bandwidth connectivity and it’s equally of no use having a solution that is complicated with several processing steps, or else, the millennials will walk away and look for alternative solution that is faster to connect with.
You alluded that telecoms operators that provide the platform for digital connectivity are working in silos, and that such action could affect the growth of digital pay in the country. How can this be addressed?
There is need for interoperability among telecoms operators. Although some are working towards interconnecting each other, but others are still working in isolation of others. Telecoms operators for instance, have mobile money wallet solutions and we do have FinTech companies that provide same solution, and I feel there is need for interoperability among service providers, because multiple solutions that are offered in the payment system, are not interoperable and therefore do not have ‘handshake’ with each other. The situation limits subscribers’ ability to have access to several payment systems. So what VISA is doing currently, is to provide solutions underneath various solutions from various solution providers, such that the underneath VISA solution will assist other solutions interoperable and provide customers with unlimited access to several payment systems in the country.
So how does VISA solution address issues with interoperability of solutions that are already operating in silos?
One thing that VISA has promised all service providers is to remain a single company that facilitates retail payments through interoperability. Our solution provides access to global solutions and also links solutions that hitherto operate in silos.
Our card technology is able to connect to several financial institutions that provide digital payment services and in a very secured manner.
How is VISA collaborating with financial technology (FinTech) and technology startups to drive digital pay in Nigeria.
We do a lot of collaboration and provide access to FinTech and technology startups. In February 2016, we launched the VISA Developer Platform, which invariably opened up the fringes of our system to enable creative developers to be able to access our strength of capabilities. So we welcome technology solution developers who have ideas that are marketable, with commercially viable product.
So the VISA Developer Platform will enable young developers have access to our Application Programming Interface (API) solution, that will help the developers to become more creative. Aside API, we have Developer Centres in Dubai, London and other parts of the world.
Startups and SMEs are important in any nation building. How do your solutions address their financial needs?
We are not oblivious of the fact that SMEs and technology startups are key to the rapid development of a nation. They need money to grow their business and our APIs will address most of their concerns. We have a solution called VISA Direct that allows the subscriber to facilitate financial processing. With VISA Direct, SMEs can carry out point to point transactions conveniently, through receiving and sending money from their mobile phones conveniently.
Technology is evolving and at the same time disruptive but most people see the disruption aspect of it as positive while others view it as negative. What is your position on this?
Technology is actually evolving and no one can hold back the power of evolving technology, especially technology in the digital space. It is difficult to hold back innovation and creativity that evolving technology is bringing to the digital payment space. As VISA, we welcome the disruption that the evolving technology it is bringing to the digital payment space, because it has changed a whole lot of ways of financial transactions, making such transactions faster and easier. What I think is that service providers must collaborate to empower the customers more with their solutions. Those who feel that emerging technologies are disservice because they are taking away their business or eating deep into their revenue generation like what the WhatsApp and Skype calls are to telecommunications operators, then I think the best way is for service providers to collaborate with each other and find new and interesting ways of providing services to the customers. VISA, for instance, is in collaboration with Apple, Samsung and Android and we are open to more collaboration.
There is a general belief that the millennials constitute huge percentage of the unbanked in Nigeria. How will VISA connect this vibrant group into the financial ecosystem that is driven by digital pay?
As a payment solution organisation, VISA ensures that it has easy and quick payment solutions for every category of people in Nigeria, including the millennials and the unbanked. We have packages for millennials that might have been financially excluded. There is need to grow awareness among the millennials and VISA has programmes built around financial literacy, and through our financial partners, we are able to promote awareness campaign among the millennials. The financial literacy programme gives access to financial activities and brings the millennials on board to be part of the digital pay system.
How will you assess digital transformation in Nigeria and that of other regions in Africa and the entire globe?
Nigeria has recorded some remarkable successes in digital payment system and digital transformation, even though we are not there yet, when compared with developed countries that started digital payment long before Nigeria. But in comparing the success made so far in Nigeria with that of other West African countries, it is clear that Nigeria is even the most advanced country in digital payment system in Africa. Nigeria has the largest number of digital payment cards issued in the whole of West Africa. Then in the sub-Sahara Africa, some regions like South Africa in Southern Africa and Kenya in Eastern Africa, are doing very well. Although we still have a long way to go in Nigeria but we have the opportunity to leapfrog and correct the mistakes made by other countries when they first started with the digital payment system. For example, Nigeria was able to leapfrog from Magnetic Stripe cards to Chip and Pin cards, which greatly reduced fraud in the financial system. Nigeria needs to adopt relevant digital pay solution that will further drive digital transformation across all sectors of the Nigerian economy and it is for this reason that VISA is investing heavily in more digital pay solutions.
Is the security of digital cards a determining factor in the growth of electronic payment system, especially in e-commerce?
Security is always a concern in the digital space and the adoption of relevant digital pay solutions is the key to addressing security concerns. The right solution should be put in place to protect the entire payment systems. VISA for instance, has digital solutions that detect and arrest fraudulent activities before they happen. We have solutions like VISA Risk Manager and VISA Advanced Authorisation that help to equip the banks with the ability to write rules on our platform that would prevent certain fraudulent financial transactions from occurring. We also have solutions that help bank customers to set payment limits on their accounts, and to also restrict the use of their cards in certain high risk locations, and this is helping our customers a lot to reduce financial fraud, especially with unauthorised payment, depending on the customer spending culture.