Key highlights
- Fintech Business Development Manager at Mastercard advised banks to start investing in technology to expand their capacity now ahead of the full implementation of the cashless policy.
- The fintechs, though helped to minimize the impact of the banks’ electronic payment failure, will also need to expand their capacity.
- Adeyinka said more Nigerian businesses embracing digital payments will help the government to properly monitor the economy.
The Fintech Business Development Manager at Mastercard, Tolulope Adeyinka, has said that Nigerian banks and fintech companies will have to invest in better technology ahead of December 31, 2023, to avoid a repeat of what played out recently as a result of cash scarcity.
Speaking to Nairametrics on the sideline of the 2023 Tech Unite Africa conference in Lagos, Adeyinka said that with the plan to fully implement the cashless policy from December this year, all the banks in Nigeria would have to start investing in better technologies now to improve their capacity ahead of the time.
While noting that the recent cash crunch and the attendant crisis would have been worse but for the existence of fintech who absorbed some of the pressure that would have been on the banks’ inadequate infrastructure, he said that the fintech would also need to invest more in expanding their capacity as more Nigerians move to their platforms.
Cashless policy and naira redesign: Speaking on the contribution of the naira redesign to cash scarcity, Adeyinka said:
- “Before now, when the cashless policy was developed, it was supposed to be implemented in phases. But I think the naira redesign crashed the system in such a way that everybody in every city was looking for the same cash at the same time.
- “If we did not have fintech at that time, it would have been worse. Because you now realize that some merchants have created ecosystems where they provided additional capacity to the payment system in general. So, merchants were able to make and receive payments through those Fintech ecosystems. Examples abound but I don’t want to mention names. People now see the need for them to participate in the digital economy, because, without that, commerce cannot go.”
Investment in technology
On what needs to be done ahead of the commencement of full implementation of the cashless policy, the Mastercard official both the regulators and the operators in the financial industry need to invest in better technology.
- “It is now imminent for regulators and players in the ecosystem to see how they can invest in better technology and increase capacity. Of course, you know that the federal government has said that this cashless policy is going to be fully implemented by December 2023. So, at that time, this issue of cash is probably going to come up again. By that time, we expect that a lot of fintech and banks would have invested enough because the problem we’re experiencing now is a capacity problem. And we feel that before December it should have been resolved,” he said.
4th industrial revolution
Speaking to the theme of this year’s Tech Unite Africa conference, ‘Fast Tracking the 4th Industrial Revolution in Africa’ the Mastercard Manager said the fourth industrial revolution speaks to a revolution around digital economy, access, artificial intelligence, and the internet of things.
- “We are seeing an economy where a lot of people need to be brought into the digital space for economic activities. MasterCard has been doing a lot in this area; we are hiring more people to accommodate more people into the digital space by empowering businesses to accept digital payments.
- “We’re also partnering with a lot of enablers in the market who are helping us to reach the bottom of the pyramid customers. The bottom of the pyramid businesses is small and micro retailers. These businesses can accept payments through digital means and they are accommodated into the digital economy.
- “And the ripple effect of this is that we can now see the size of our economy because a lot of transactions that happen through cash are not captured in GDP. It is easier for governments to now see the total amount of transactions that are happening within our economy,” he said.
The Tech Unite Africa conference and exhibition is a 2-day event that kicked off in Lagos on Wednesday, March 29, and ends on Thursday, March 30, 2023. The event brings together all stakeholders in the tech industry to chart a new course for growth.