Niyi Toluwalope, the chief executive officer of eTranzact Plc, a leading payment services provider in Africa, has emphasised the importance of investing in infrastructure and technologies that simplify access to digital payments.
Speaking recently on Channels Television, Toluwalope highlighted that such investments are crucial for bringing more people into the digital payment space, which, in turn, will spur significant business growth.
Toluwalope stated that financial inclusion creates many opportunities. Nigeria, with its large population, has much to offer through financial inclusion. With over 200 million Nigerians and 140 million mobile phone users, there is substantial potential for financial inclusion.
Of the 140 million, only about 60 to 65 million are banked, leaving another 65 to 70 million driving the informal economy.
Bringing even a small percentage of these individuals into the financial services ecosystem can create a billion-dollar business.
“One of the great things here is financial inclusion—how to get the bulk of the citizens into the financial services ecosystem to enable them to make payments, save, access insurance, credit, and other services that can drive entrepreneurship, support SMEs, and boost the economy,” Toluwalope noted.
He further explained the remarkable transformations seen over time in digital payments. eTranzact facilitates seamless electronic transactions daily, and one of the key drivers is the investment in technology that allows these operations to be seamless.
Building trust and confidence in the ecosystem is crucial for encouraging those who are excluded to become included and participate in financial transactions.
When asked whether Point-of-Sale (POS) systems pose a risk to financial inclusion in the country, Toluwalope replied,
“I wouldn’t see that as a risk; it’s an enabler. You want to bring people who have never trusted brick-and-mortar financial institutions into the financial services ecosystem. Expecting them to use a complex machine they have no connection with is unrealistic compared to a POS terminal operator who sells goods in a rural ecosystem.”
He referenced a 2012 study highlighting the cultural need to handle currency, which significantly affects the adoption of cashless systems in Nigeria.
Trust and convenience are critical. POS terminals offer trust because you see the person you’re transacting with, and they are convenient— they’re available at all times.
You can even call the operator late at night if you need cash. Investing in technology that simplifies access and infrastructure for digital payments will lead to a surge in business growth.
Toluwalope believes that while these technological features may involve less cash, there will still be some cash involved.
“Even in more advanced countries with widespread digital payments, cash is still used to some degree depending on the demographic. This is critical for Nigeria because reports indicate that money in the informal sector is almost as significant as that in the formal sector but not captured in formal trading.”
Commenting on eTranzact’s performance, Toluwalope said,
“For us, the numbers are impressive. Consistently, for the past 16 quarters, eTranzact has exceeded its expectations. We started our transformation journey in 2019, revamping our strategy to focus on switching infrastructure, merchant marketplace, merchant activity, and then direct-to-consumer services, which include our financial inclusion business and our digital bank.
“We are a switch, a central infrastructure, a backbone for the industry. We’re leveraging that to build merchant-acquiring activity and transform the financial inclusion space. We’re also using it to build our digital bank, creating several features for a wide demographic of Nigerians to conduct financial transactions. Somehow, we are not affected by most of these headwinds because our business is just like the food business. People eat at whatever ceremony. And so it is the same with payments.
“Every time you’re making a payment, you could reduce the frequency or increase the value, but at every point in time, you’re making payments. We are a switching infrastructure. We sit at the back end of all the debits, credits, and all the settlement positions. So, eTranzact will always be crucial in the financial landscape”.
