Experts project 43% growth in fintech ecosystem – New Telegraph
Financial technology (Fintech) has been projected to grow in leaps in the next few years as it is expected to increase in revenue size by 43 per cent in the next two years. Industry experts said the subsector would witness boom as cashless policy is enforced in the country. In the digital payments segment, the number of users is expected to amount to 146.07 million by 2027, while the total transaction value in the digital payments segment is projected to be $14.25 billion in 2023. Although the years ahead appear bright for fintech in Nigeria, analysts say 2023 will prove to be a pivotal year for the sub-industry. According to the Chief Executive Officer of the Ham Institute of Cyber Security, Hanniel Jafaru, fintech business in Nigeria is set to take a giant leap in 2023 because of the cashless policy the Central Bank of Nigeria is trying to implement. Due to the cash withdrawal limit that comes with the policy, most persons will begin to look at the possibility of using fintech services to carry out their transactions.
Jafaru said beyond creating virtual cards with fintech companies, individuals also had the opportunity to create virtual dollar cards that would allow them to do dollar transactions online. He said many people had already started using virtual dollar cards made available by fintech companies. He stated that before now, to have a dollar card the customer would need to have a domiciliary account. “However, with fintech companies you don’t need a domiciliary account – you can create the dollar card and transfer your money from your regular account into the dollar card and load it using the black market exchange rate, thus knocking off the need for banking,” he stated.
Ambrose Sartee, a venture capitalist in Lagos, said cryptocurrency wass another reason why fintech would be a choice for financial transactions. He said: “Some fintechs are making it possible for individuals to make payments via cryptocurren-vircies such as Bitcoin and Ethereum. “Fintechs are integrating cryptocurrency payments in their platform; anyone that creates this kind of payment system into their platform – it means that users that have cryptocurrencies can make payment direct to clients without having to go through the banks.” Sartee said coupled with the fact that Nigeria is growing, the country’s broadband penetration was growing, the Internet access rate is growing, the more persons that get connected to the Internet the more opportunities they will see and have the option of making a choice. The CEO of Piggybank, a Lagos-based fintech, Emmanuel Edebe, said with the whole coming on board of more artificial in-telligence there was a possibility that there would be new fintech entrants because the cash withdrawal limit will make people see the need to strive to enter the subindustry. “After all, that would be an incentive for people who were considering coming in earlier,” he said. He said the sky was the beginning for fintech, adding that he expected 2023 to be a year of acceleration for fintech in Nigeria. Edebe said the e-naira would be another incentive as more and more people would see the need to make direct payments as opposed to the use of cash payments. He said he expected the bureau de change operators would begin to see the need to have their payment machines to avoid the legal limitation. So people will prefer to go to a money changer where they can scan a barcode and make payments easier. Francis Ajuonoma, an economist, said several factors were driving the rise of fintech.
This, according to him, includes the focus on underserved areas, the changing regulatory environment, APIs, and customer experience. He noted that as a result this, there was a lot of capital available for fintech companies to grow and expand their businesses, adding that such a favourable environment was expected to increase the rise and profitability of fintech this year. “It is noteworthy that because of fintech, more people and small businesses have access to accounts, transactions, and credit,” he said. The development of digital savings, cross-border transfer solutions, and insurance also offers the promise of more income and jobs. Home to Africa’s largest population, Nigeria plays host to a strong and growing fintech ecosystem which is largely driven by increasing smartphone penetration and a massive unbanked population. Experts said the mobile ecosystem was at the heart of fintech, powering new initiatives, and collaboration, enhancing user experience and driving new revenue growth in key areas such as social engineering, fraud solutions, payments, digital assets, credit risk scoring and new technologies including the metaverse and digital currencies. According to them, the trends in the ecosystem will foster new initiatives and shape the fintech landscape.
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