Paga distinguishes itself as Nigeria’s mobile money market develops

Paga looking to become online and mobile payments giant.

Growth in the mobile money market in Nigeria has taken longer than expected – given the size and sophistication of the country’s economy – however, this is starting to change.

There are 21 licensed m-money operators in Nigeria but in practice only 3 who are operating at scale. A number of these licensed operators are doing niche services: for example, one does collections for a fast moving consumer goods company.

The 3 main players are Paga, First Monie (First Bank) and eTranzact (Pocket Moni). Paga – the fastest growing platform currently has 4,961,761 subscribers.

More importantly – is the number of active users, of which Paga has 900,000 active users (according to statistics gathered over the last 90 days).
At least 23 million Nigerians have a bank account and half of Paga’s subscribers are banked. Which implies that there is still a long way to go before the market reaches anything like its full potential.

One of the key factors for growth with this type of service is the number and spread of agents. Paga has recently inked a deal with the Nigerian Postal Service to have agents at every post office. Paga currently has 10,104 agents in 35 states, 3,000 of whom are in the commercial capital, Lagos.
Tayo Oviosu – the founder and CEO of Paga – is looking to have at least 30,000 agents by 2018.

Paga has been experiencing its fastest period of growth since it was officially launched in 2012 – (the company was founded in 2009).
Between launch date and June 2015 it had US$1 billion in transactions, however, between July 2015 and July 2016 it had US$800 million in transactions.

According to Oviosu, the platform has had “a really good adoption around money transfer and good growth in agents. The average size of a mobile money transaction varies, however it is in the neighborhood of but is around N16,000 (US$46); money transfers transactions are on average higher – N18,000 (US$55.31) but the bill payment average is smaller.”

Oviosu has indicated that in the next few weeks, there will be “big changes to the scope of the services”. The company is in addition to becoming the largest payment platform, it is working to revamp its consumer and merchant offers.
“We are really going after merchants both in store and online. There will be a new version of Paga with this functionality (with a back end option to the customer’s bank account), similar to how PayPal works. You will be able to choose where you perform your transactions from.”

In addition Paga will provide services to small and medium enterprises for their back office(s) including payroll and credit to merchants. Oviosu wants to give merchants a device that will collect payments from anybody. “We still need to finalize it”, he added.

He acknowledged that it would need a big shift for Nigerian consumers and businesses who are still heavily wedded to cash transactions, “We will need a big marketing effort and we need to think how we can move them to Paga. There is a journey we cannot skip. We have to walk it. We are laying the groundwork for the journey.”

So where does Oviosu see Paga in 3 years time? “I think we will have at least 20 million subscribers and have the single largest network of financial access points. We want 30,000 agents by 2018. We want to be the anchor to a merchant network. But there’s a ways to go.”
He could be right.

Source: Balancing Act Africa