OnePipe’s Yvonne Elaigwu talks about the Future of Payments in Nigeria

These days, emphasis is increasingly placed on inclusion but this isn’t limited to the unserved and underserved; it also includes both the male and female genders served amicably and equally. 

Even though there is still some room for improvement, there are efforts to increase the presence and interest of women in fintech and all other sectors. This is a good thing.

Yvonne Elaigwu is one such woman who is gaining ground in fintech. She studied Human Anatomy at University of Maiduguri and hopes to become a genetic engineering specialist. She began her career in operations, but she soon found her way into ensuring the functionality of every business she worked for.

My first job was an operation’s role and I quickly found that I enjoyed being a part of the team in the backend that provided the support and structure that ensures that all goes well. Each of the roles I have held since then was Operational in nature. Since then, I have been working in this field for 12 years. This includes the banking, CSR, NGO, and technology sectors. Somewhere in between these jobs, I got a master of Environmental Management degree from the University of Lagos.”

Yvonne Elaigwu, Head of Operations, is currently at OnePipe, a leading fintech API Company and Trustee Open Banking Nigeria.

Discussing the future of Nigeria’s payment system, the trends required to drive growth in the country’s fintech space and what it takes to drive the operations of a Startup in Nigeria’s unique economy, Elaigwu shed some light on the present and future possibilities of the fintech space.

Yvonne Elaigwu commented on the current status of payment systems in Nigeria today.

I’d say our payment systems are growing and evolving. Both transaction volume and value are increasing exponentially. In 2020, NIP transactions were more than N235 trillion. This is almost 100 times the amount of e-payments transactions that occurred less than 8 years ago.  The Covid 19 epidemic forced the world to prioritise contactless interactions, and payment systems were not exempt. This is probably one of the drivers of the rise and adoption of payment via transfer; PayWithTransfer.”

Ten years ago, NIP transactions were valued at 4,449,654 according to the Central Bank of Nigeria. This was less than 2% of 378,100,000.749 transactions made by ATMs and POS terminals.

Going down memory lane, Yvonne Elaigwu explained: “I can recall a time when every corner shop and salon was trying to get a POS system from their banks. It was the newest thing and everyone needed one to receive payments. The store owner and customer both relied on the POS slip to confirm that a transaction was successful.”

It’s interesting that these store owners and merchants had bank accounts but did not think to accept payments directly into them. Today, the concept of pay-with-transfer is so accepted that the cab driver, who before now would only accept cash, — and probably never went through the POS stage — would, without much ado, share an account number to receive payment for his services.

Data supports this shift and growth, the CBN report on e-payments showed that in 2020, “pay-with-transfer”The NIP volume was almost 200% greater than the volume paid on ATMs or POS terminals. It also had a significantly higher transaction value.

Businesses are more comfortable receiving digital payments. Most businesses are well-positioned to do so. This is evident in the constant growth of the volume and transaction value of all epayment platforms.

Digital Currencies

Many have thought about whether digital currencies would spread or not and if they would be eventually accepted into the Nigerian economy. Yvonne Elaigwu emphasized this point:

“I am no subject matter expert here, but it looks to me that they are here to stay. Like all new “products”, they would come with their teething problems, bugs and losses.

Costly mistakes would be made and lessons would be learnt, the Luna scenario of the last couple of days taught me and hopefully the ecosystem that ‘it’s not really stable unless it is pegged against actual money sitting in a bank account’. It’s like purifying gold, at the end of the day, impurities would be removed and a gem would emerge. Although it might take us some time to embrace a new technology as an economy or country (e.g. It can take us some time to get on board with a new technology (e.g. mobile networks or cell phones), but we eventually catch up and recover what we lost. 

“I personally believe that once digital currencies are established and become relatively more mainstream, they would be implemented and even encouraged in our country. This would probably take time, but it is very likely to happen.”

What will be the future trends in Nigeria’s financial sector?

Yvonne Elaigwu believes that Embedded Finance will soon take root and shape the Nigerian financial sector.

This would be evidenced in close partnerships between traditional banks, lenders and BaaS companies to enable merchants and “Regular” entities like the distributors, cooperative societies, farmers’ associations etc to provide financial services to the last mile customer. This would improve financial literacy and allow customers to bank more.

The thinking is that the farmer who has been “Acquisition” by his association of farmers, would know to ask that entity for a loan to grow his farm. The entity is familiar enough with him and his operations to grant him this loan.

This can also happen to the distributor, who purchases his retailers and provides them with banking services. Now, the last mile customers will be more banked and incentivised now to save their money within the banking system to make transaction trails that allow them to qualify for credit facilities that can help grow their businesses or meet their urgent needs.

“I also think that we will begin to see simplified and more secure payment methods as people continue to embrace ‘pay-with-transfer’. The data already shows that people gravitate to this method of payment, and the failure rate for card transactions is not increasing. In the future, the relevance of card payments would be minimized, thereby reducing the associated fraud incidences accompanied by card payments.”

Technology and its impact in the Nigerian financial system 

It is clear that technology can be used to reach the underbanked and educate them.

We see technology impacting Nigerian finance in the most obvious way: the rise and proliferation of technology startups in finance. The prevalence of technology has made it possible for enterprising Nigerians to build solutions that can change people’s lives.

These ventures have over the years attracted billions of dollars worth of capital into the country, provided employment to thousands of people and in 2021, technology startups contributed about 10% of Nigeria’s GDP.

Technology-driven companies continue to build and ship solutions that target the underbanked and unbanked of the country, making them available via progressive web apps, downloadable applications, USSD, and POS machines.

The chances that an individual in the remote village of Obagaji, Agatu where I come from (where there is no physical bank) with a mobile phone (any kind of mobile phone) is able to access a financial service today is very high and attributed to technology, driven by technology companies.”

Technology has made it possible for the regular person to have access to resources on financial instruments, concepts and data with which they can make informed decisions to improve their life conditions-everything is a google search away.

Do you believe there will be convergence between digital banking and the traditional banking system?

Eventually, yes. While digital banking is the “Get it now” and the future, traditional banks are here to stay and will need to come to a place (probably are in that place already) where they decide between fighting digital banks, competing against them or partnering with them.

We are seeing partnerships emerging between traditional banks and online banks in America, Europe, and Nigeria to help birth the concept embedded finance. It is a relatively new concept. These partnerships are expected to increase in number in the future.

Yvonne Elaigwu is the head of operations for OnePipe. What excites her about working in a Nigerian startup? 

Interestingly Elaigwu enjoys the challenge of building new products and systems; “the joy and feeling of satisfaction from being a part of birthing something that has the propensity to change lives and influence people and economies.”

After the Covid 19 pandemic the unified FMCG distribution platform digitized all of its operations. Omnibizz partnered with OnePipe in embedding financial services that allow customers to pay directly into their retailer’s accounts.

They can place orders and track their sales. They can pay for orders. This has decreased and will continue to lower the dependence on cash transactions, with all associated risks. It allows seamless payments, the opportunity to bank the retailer who is underbanked, and credit to help them grow their market.

What are your top strategies for managing people working with you both internally and externally.

“I default to treating people how I want to be treated, I also try to understand people and learn how to communicate with them.”

Conclusively, Elaigwu’s advice to women who choose to launch startups in Nigeria and hope to get operations of a business right, was: 

Operationally, I recommend that you quickly decide on the type and size of company that you want to create. Then find one person who can help you champion it from scratch. 

When building a startup, operational practices may not be top on the list of most important things for the company because you’ll be building products, finding product-market fit and generally just figuring out. 

With at least one resource dedicated to ensuring that you incorporate standard best practices into your operations and course-correct as you go, you are less likely to run into heavy-duty operational headaches in the future.”

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