Young Nigerians cashing in on mobile money biz

Financial service shops operated by bank agents are fast becoming a lucrative venture and an easy way to perform monetary transactions for many Nigerians. Some are registered as Firstmonie agents, of First Bank, while others use Paga, an online and offline financial platform, among others. Transactions, such as transfers, deposits or withdrawals, among other services, […]

Financial service shops operated by bank agents are fast becoming a lucrative venture and an easy way to perform monetary transactions for many Nigerians. Some are registered as Firstmonie agents, of First Bank, while others use Paga, an online and offline financial platform, among others. Transactions, such as transfers, deposits or withdrawals, among other services, are made without a customer having to physically visit a bank. Daily Trust Saturday took a look at the fast-rising trend.

In Kuje Area Council, Onyeleke Shereef runs a shop in between First Bank and First City Monument Bank (FCMB), a lucrative spot because the Automated Teller Machines (ATMs) in both always have long queues. Inside the shop, a list on the wall shows the charges for amounts withdrawn. If a customer withdraws N10,000, for instance, the charge is N200, and if N20,000, it is N250. Also, the process is simple. A customer’s bank card is slotted into a POS and the amount requested to be withdrawn is sent to the shop’s business account. The charge is collected either as cash or as part of the transfer. If successful, the customer is given the equivalent of cash transferred into the service provider’s account.

“I get roughly about fifty customers in a day,” Shereef said. But sometimes they lose them. A customer who wanted to transfer N3,000 to another account left because the N200 charge was high. “We have a lot of competition because other shops may collect less, maybe a hundred naira for the same transfer,” Shareef explained.

But Shereef revealed what he called a secret some service providers hide. “They provide a service for half the amount, but don’t tell you the bank will charge you too. But we tell our customers upfront that the bank charge is included in ours,” he said.

But what is the highest amount an individual can withdraw?

Shereef said this is all dependent on the capital available. Like every other business, the ‘money’ shops have their own share of challenges. “Sometimes the Interswitch network can be bad. For example, for the past week GTB and Zenith Bank have been debiting customers without transferring cash to us. That causes confusion between us and the customers. We tell the customers to complain to their bank. We can’t give them money until our account is credited,” he pointed out.

Despite this, people still patronize them, after all such errors take place even at the ATMs. A customer who came to withdraw N100,000 said it was a smart move for him because the FCMB Bank at Kuje, which does not permit more than a N10,000 withdrawal at once, would deduct N65 each time as bank charge, totaling N650.

Another businessman, Aminu Muhammad, boasted that his three-year-old shop is famous in Gwarinpa Market. “I have good service and I am always available, so people are always coming in every minute,” he said. But how did it all start for him? He explained that he is in collaboration with Access Bank and basically it only took opening an account with them to start-off.

Access Bank on its website, describes as its agent, an individual or business entity authorized by the bank to provide basic mobile money services to customers. In other words, an agent can be an individual, small business, companies with large distribution networks, and government service outlets such as post offices. They are empowered to provide services such as deposits, withdrawals, bill payments, enroll customers onto the platform, provide customer service and support, and educate customers about mobile money services.

An easy way of identifying an agent is when they have their financial institution’s logo visible in their shops or offices. Also, they each have unique agent numbers prominently displayed at their location.

So, aside money deposits, transfers and withdrawals, Muhammad opens accounts and makes AEDC payments, GOTV and DSTV subscriptions for customers.

At Gwarimpa Market, Muhammad competes with several other shops. But he does not regret it. Initially, he started the business when he noticed people were relying on the system, but it paid off. “I can provide any amount a customer wants if he is willing to pay accordingly,” he said, adding that the main problem he faces is that of security. “Everybody knows we deal with money here, so stealing is very common. Also, if we mistakenly mix up figures and send to a wrong account, we bear the loss.”

Yet another businessman, Hamisu, explained that a good day may mean N5,000, N3,000 or N2,000 profit. “But if I am not in luck, I may end up with N800, N500 or even less because of the competitive nature of the business,” he said. So far, the highest amount he has given to any customer is N50,000. “But if the owner is around, he gives up to a hundred thousand naira.” Also, what they don’t do is lend money out.

The Head of Finance, Oakland Multipurpose Cooperative Society Limited, Hauwa K, Jubrin explained that there is a gap between banks and people who need banking services. “That is why I registered as a Firstmonie agent, so I can bring banking services to the doorsteps of such people.” She added that the bank determines what they charge customers. “We charge low because banks are everywhere in Utako.” Oakland charges N200 for withdrawals between N5,000 and N100,000 and the highest amount allowed is N500,000.

You do not have to be an Accounting graduate or financial expert to give the business a try. Hadiza is a typical example. A fashion designer, she is also a Firstmonie agent, and so far, running the business from home has been looking up for her.

According to information found on First Bank’s website, Firstmonie agent network is a channel through which First Bank expresses her commitment and passion to broadening the opportunities and access to financial services for every Nigerian and African; especially within the low-income segment (popularly referred to as the unbanked and under-banked population). One of its objectives for using agents is to reduce reliance on over-the-counter transactions in their branches, while at the same time providing personalized services that promote convenience.

Nigerians like Hadiza have taken up this opportunity. Because there is not a single ATM around her neighbourhood, people patronize her. One of the few challenges she faces, however, is the incidence of fake transactions, particularly in making transfers.

“Staying in the barracks makes the business more profitable for me, as I am the only agent here in Apo,” she said. Every day, customers queue at her doorstep to make transactions.

Folake Adebiyi who patronized Hadiza and made a withdrawal of N1,000 said she got the exact amount she requested for. Hadiza on the other hand received the bank charges as her profit. This is so because she registered with the bank.

In Mararaba, a town in Nasarawa State bordering the capital city, Angela Ugwu is yet to get her license but is already in business. She explained, however, that the bank surveyed her business environment before granting her permission to commence. “There is high level of patronage, although the risk is great,” she said. Customers do not make use of their ATM card, rather she transfers money from her account and receives cash from them (customers). Sometimes, there might be an error in the process and the customer can go to the bank and reverse the process. Also, some customers give fake money after one must have done the transaction.

University graduates are not left behind. Another Mararaba resident, Muhammad Abdullah, started his business in 2018 when he was unable to get a job. He is now an agent of Heritage Bank and has a CAC certificate which gives him the legal right to engage in monetary transactions, sell phones as well as its accessories. Presently, he boasts of 20 to 25 customers in a day and profit is based on bank charges. The downside as far as he is concerned is when he mistakenly sends money to a wrong account and he has to bear the cost. “This happens by mistakenly typing in a single wrong digit,” he said.

Like Abdullah, Christopher Sunday is also a graduate who is now an agent for Heritage Bank. He paid up a fixed amount to the bank within three months before he was able to start his business. Other services include subscription payments of for cable TV several and more.

Some, like Mubarak Fashola registered with an online financial platform known as Paga. According to the information on its website, founded in 2009, Paga aims to make financial services available to all Africans who have access to mobile phones. They work in partnership with select banks, microfinance institutions, and all mobile network operators.

Paga works on the most basic SMS enabled phone and on all mobile networks so customers have the liberty to have their Paga account available, regardless of what phone or network they are using. Their core offering for customers is a money transfer service, where one can send money to anyone with a mobile phone. This can be achieved by anyone with a Paga account or through an agent. Other services include buying or sending airtime credits, bil payments, and retail payments.

Fashola needed to have at least N400,000 in his account before he became a Paga agent. Then, there was less competition and he made up to N400,000 in a month. Now he makes below N200,000. His reason for starting the venture is simple: he saw a need within his environment and took advantage of it. In his case, the amount of money a customer can withdraw depends on the POS used. With a Sterling Bank POS, it is N500, but a Paga POS allows up to N1m.

However, new to the business, David Jide in Kado Estate argued that the financial service business is not profitable because of the Firstmonie policy, another service operated by First Bank, where charges have limits. For example, if a customer withdraws N1,000 and the service charge is N100, the bank gets N52.

But kiosks, and even small offices, continue to open across the city, and across Nigeria, especially in suburbs and some rural areas, with a variety of logos showing financial institutions offering services to customers via the young Nigerians cashing in on the trend.