Mena – Mahmood Ahmadu is the chairman of Innovate 1 Pay, a Nigerian financial technology (fintech) company established in 2012, providing online payment solutions for retail and wholesale mobile remittances, mobile money and currency card payments. The largest domestic service provider of this nature in its home country, the company has since spread its operations to 24 different nations.

A great advantage that emerging economies have, when they adopt breakthrough technologies, is the ability to pivot rapidly, and expand capabilities without having to worry about high volumes of existing systems and infrastructure becoming redundant. With game changing digital innovations entering the fray in recent years, it has become possible for such nations to leapfrog several generations in technology. And perhaps the best example of such exponential transformation can be seen in the African fintech industry.

In the past few years, Africa has witnessed the rise of a dynamic startup ecosystem, which is attracting huge amounts of venture capital. Tech hubs, with multiple new companies making a name for themselves with innovative solutions, have emerged in Nigeria, Kenya and South Africa, with nations like Tanzania, Ghana and Senegal close behind. In the case of fintech, the boom is also related to the sector filling a gap in services that traditional banking had not been able to address. In addition to delivering effective alternatives that have transformed the state of financial inclusion in the continent, a surge in internet and mobile penetration in Africa, has lent further momentum to the industry.

An appropriate solution meets an unusual ecosystem

The Global Findex Database 2017, the most recent version of the report which is the world’s most comprehensive record of payments, savings, borrowing and risk management, found that Africa was home to the largest unbanked and underbanked population in the world. Naturally, these circumstances present the ideal opportunity for fintech solution providers, to turn a challenge into an opportunity.

At the same time, the International Monetary Fund (IMF) has estimated that Africa has the largest informal economy of all continents. With so much commercial activity unreached by formal investment, lending and insurance services, the sheer scale of the opportunity should be obvious. The amount of venture capital available to African startups exceeded the $1 billion mark for the first time in 2018, and the bulk of these funds were captured by fintech companies. Nigeria, which is the both the most populated nation in Africa with 206 million inhabitants, as well as its largest economy, has been attracting – and generating – the largest amount of venture capital on the continent. In fact, many African fintech companies, both Nigerian and from other nations, have taken to making their mark in the Nigerian market, before they proceed to scale up operations elsewhere. 

What do these developments mean for Mena?

Markets like Africa, India and Brazil have had digital wallets and payment platforms operating successfully for well over a decade. So what does this tell us about the possibilities that fintech can unlock within the Middle East and North Africa (Mena) region? Well, the answer to that is a bit complex, given the cross section of economies that fall within the category.

For one thing, 2020 proved the contribution that fintech made to providing much needed resilience, as an alternative to traditional banking during a global crisis. African migrant workers, and those cut off from loved ones during lockdowns, used digital wallets and payment platforms extensively, to ensure that money got to their dependents. The large number of similar expatriate workers in the Mena region present a similar opportunity, given the huge volume of remittances that such individuals send to their home countries. For those in higher income brackets, services such as e-commerce and online insurance facilities – and many more emerging financial services – present an equally vibrant market, for entrepreneurs to address. 

Read Also – Mahmood Ahmadu Shares Lessons Learnt In 2020

But, perhaps the most significant lesson to be learnt from the success of fintech in Africa, is that end users have overcome any reluctance they might have had to transfer money online – especially with regards to security concerns. According to a 2019 IMF policy paper on fintech in Sub-Saharan Africa, fintech is emerging as a major technological enabler in the region. It has transformed financial inclusion indices, and is serving as a catalyst for innovation in sectors as varied as agriculture and infrastructure.

Despite a huge subset of the mobile phones in this region being ‘feature phones’ – as opposed to smartphones – Sub-Saharan Africa now has in excess of 400 million registered mobile money accounts. One of the lessons to be learned here is that even those sections of humanity who live in the lesser developed regions of the world have overcome any security related reticence. But the truly impressive feat that operators within the Mena region can emulate is, the creativity involved in delivering services within technological limitations imposed by handsets that much of the world would now consider archaic. Fintech companies within the Mena region, with significantly more tech-endowed customers to target, can learn a lot from the resourcefulness with which fintech in Africa has developed solutions that can deliver services, even if the user does not have access to a device that can host apps.

Taking inspiration from a solution driven mindset

We often limit the scope of the term ‘financial inclusion’. It should not be seen solely in terms of bringing financial services to the unbanked. On the contrary, the perspective we need to adopt should be about reaching the ‘unreached’, in more sophisticated categories of financial services. Can developers in Mena expand the reach of wealth management, online trading, travel insurance, and dozens of other specialised services, using app based platforms? Nearly all of these services have debuted as app interfaces, but often with limited options. Can fintech in Mena take inspiration from its African counterparts, and develop true functionality and convenience, in high end financial services – especially given their market has, on average, more advanced devices to leverage? The answer to that rhetorical question is an obvious and resounding yes!

Source – https://www.wamda.com/

The post Mena – learning from the African experience in fintech appeared first on Daily Concord.

Viruses and pathogens are known to live on surfaces for up to 48 hours. Some researchers are speculating that the Covid-19 virus could survive even longer on certain materials. Paper money, reportedly, can host live viruses for 17 days.  Polymer notes are believed to be thrice as clean, yet they too can carry certain pathogen from anywhere between six hours to a day. The only way to minimize infection is for the authorities to promote contactless cash transactions. Even then, there is the danger of microbes being transferred by cards at ATMs and checkout registers, in supermarkets and stores.

A solution whose time has come

While we have seen a growing shift to cashless transactions in recent years, the current situation demands that we should renew efforts to totally digitalize payment systems, while ensuring that are accessible to everyone, to help protect us from the current pandemic. As we begin to accept the major changes this disruption has already caused in our lives, as the ‘new normal’, Fintech companies around the world are working with governments and banks to make the switch to a seamless cashless culture possible. The main thrust is on ensuring that the elderly, those underserved by traditional banking, and the most vulnerable segments of our society are not left behind.

There are many benefits to a cashless society. For one, it can provide the opportunity for governments to set out more easily enforceable fiscal guidelines, to help strengthen the economy and make it more transparent. During a recession people tend to hoard cash, forcing governments to lower interest rates in a bid to stimulate the economy. Going cashless would mean that people would not be able to take money out of the financial system, taking considerable stress off central banks and the lending mechanism. A cashless society would also make it harder to evade taxes, conceal earnings or illegal transactions. Cash payments can be anonymous, which creates avenues for white collar crime, including fraud, counterfeiting, bribery, corruption, and even terror funding. Fintech models can offer fraud-preventing technology and encryption, biometrics and Blockchain technology, to make payments and transactions safer than ever.

So what’s the downside?

Of course, one can point out a few problems that could arise from a totally cashless society as well. Innovation brings with it a degree of risk and concerns over privacy. How do we know that the payment gateway we decide to use will protect our data? Technology cannot be totally glitch-free and data breaches can occur – especially with hacking being a perennial menace. Using online payment portals also increases the risk of cyber-crimes such as identity theft, and fake transactions. For conspiracy theorists there is Big Brother’s surveillance tactics where your every move, financial or otherwise, could be tracked by the state.

While these concerns are all possible to address, the Covid-19 crisis is highlighting another very important limitation widespread deployment of cashless Fintech innovations currently face. While the more affluent sections of society are already able to access the latest technology and digital tools, sections of society that are economically vulnerable could find themselves even more marginalized. The need for Fintech solutions, which every consumer, from the daily wage or migrant worker to small business owner can access, is a bottleneck that remains to be addressed.

An inclusive and empowering solution

While Europe, North America, Japan, and most other developed economies, are going increasingly cashless already, emerging economies like India, Brazil and several African countries – including Nigeria, Kenya and South Africa – have been leading a quiet digital payment revolution of their own. India has been ahead of the curve since demonetization was imposed in November 2016. Digital India has been the government’s flagship vision of transforming the country into a digital society and economy. Several South American nations have made substaintial strides in recent years as well. Fintech innovators in Africa have also been earning themselves a name, as enablers of accessible grassroots money transfers mechanisms, in largely informal economies, and in the context of the largest concentration of humans underserved by traditional banking.

Looking beyond this current health crisis, the evidence for cashless mechanisms enabling a fairer and more financially inclusive model of the economy, is mounting.  The advantages extend to small and medium enterprises as well, including reduced operating costs and enhanced efficiencies. However, the execution of such a transformation will need the insightful and proactive joint efforts of governments and Fintech innovators. As mammoth as the task may appear on the surface, the widespread financial inclusion and small scale entrepreneurship it will empower, make a more than compelling case for taking on the challenge.

Read Also – Mahmood Ahmadu Features in Dele Momodu’s Thisday Newspaper Article

About Innovate 1 Pay

Nigerian Fintech company and payment services provider Innovate 1 Pay was established in 2012. It provides online payment solutions for retail and wholesale mobile remittances, mobile money and currency card payments. The largest domestic service provider of this nature in its home country, the company has since spread its operations to 24 different nations and trades in over 60. The company’s online wallet accepts Visa, MasterCard, Internet Banking, debit and credit cards, as well as offering customers the ability to store money in an online wallet, for easy and secure payments. The Innovate 1 Pay payment gateway is a comprehensive one-stop solution, enabling quick foreign currency transfers and offering touch points integrated with several banks, payment processors, mobile money operators and more.

About Mr Mahmood Ahmadu, Chairman of Online Integrated Solutions

As the Chairman of Innovate 1 Pay and Online Integrated Solutions, Mr Mahmood Ahmadu’s entrepreneurial vision has empowered financial inclusion across Africa. Under his stewardship Online Integrated Solutions has emerged as a ‘one-stop-shop’ for Caribbean and African businesses, and a point of contact between these regions and global markets, particularly the Middle East and Far East Asia. With an MBA from Nassarawa University in Nigeria, Mr Ahmadu invested in his first successful company in the early 80’s, emerging as a bright star among earlier pioneers of trading in GSM, in northern Nigeria. He launched Innovate 1 pay in 2012, as a pioneering African Fintech company, with a vision to pursue holistic global integration of underserved markets. Mr Ahmadu is a strong believer is giving people and businesses the tools to empower themselves and leverage their talents, to becoming competitive innovators at a global scale.

Source – http://uaebusiness.com/

The post Fintech Can Secure The World From The Economic Impact Of Pandemics appeared first on Daily Concord.

Compare these unequivocal statistics to those from a very different cross section of users in India, one of the most rapidly changing of all emerging markets, and the numbers are equally staggering. According to TechSci Research, digital banking will  grow at a CAGR of over 22% in India, between 2019 and 2024. Taking a global view of the trend towards digital Fintech solutions confirms that the UK and India are not peculiar examples of enthusiastic digitization over the period in question. EY’s Global FinTech Adoption Index 2019 report found that 64% of digitally active consumers across 27 countries were already using digital banking solution – a near doubling of the figure within the previous two years.

However, with the Covid-19 pandemic transforming the economic climate around the world, in very fundamental ways, these reports and estimations – optimistic as they already were, at the time – might well fall short of the real world changes we witness.

An agile solution, for the most vulnerable market segments

Given the social distancing and self-quarantining practices, which have come to be the foremost defence against the spread of the virus, some of the advantages that Fintech solutions present to customers are obvious. However, it’s the post-pandemic reactivation of the global economy that may end up being an even more appropriate context, for a further surge in the adoption of digital banking and payment solutions.

Small and Medium Enterprises (SMEs) represent in excess of half the GDP of most countries and seven out of every ten employment opportunities. Due to their dependence on physical shopfronts and minimally automated production, these have been some of the hardest hit businesses, because of the extended lockdowns the world is currently experiencing. Government relief packages notwithstanding, the long term survival of the crucial section of economic activity depends on the creation of a viable new model, which is compatible with the inevitable limitations the world will be forced to operate within. According to the International Finance Corporation (IFC), a humungous $5.2 trillion per year is required to address the unmet financing needs of SMEs worldwide. Given the existentialist threat that the Covid-19 pandemic represents to these businesses, the urgent need to bridge this gap cannot be overstated.

The need for Fintech and legacy banking to collaborate

Although they were see as disruptors to the status quo until recently, the efficacy of Fintech innovations is not solely restricted to giving individual customers and SMEs access to capital and financial inclusion. On the contrary, according to Capgemini’s Open X Readiness Index – which benchmarks the capability of traditional banks to collaborate with startups – 48% of Gen Y and tech savvy customers are likely to switch their banks, in part due to their inability to integrate well with digital payment platforms. The inability to adopt some of the more flexible and leaner banking and payment options, which Fintech service providers are making available to their customers, could spell disaster for traditional banking. At possibly the most delicate time for the global economy in more than a century, any such upheaval could have catastrophic real world consequences.

Read ALSO – Mahmood Ahmadu Features in Dele Momodu’s Thisday Newspaper Article

However, such integration had already come up against challenges, even prior to the very sensitive economic environment precipitated by the pandemic. According to the annual World Fintech Report 2020, also issued by Capgemini, there were several hurdles to the closer integration of established banks and Fintech innovators, prior to the pandemic. For instance, the study found that a mere 21% of banks thought their existing digital systems were agile enough to collaborate with the new breed of innovators, and 70% of Fintech companies expressed serious reservations about the culture and organizational structure of their bank partners.

Nevertheless, for the global economy to remain resilient in the face of the current disruption and its aftermath, the wholesale integration of digital payment platforms and banking solutions, into the existing financial system, is inevitable. In a recent report, Amsterdam based VC Finch Capital projects that while some initial pain will be involved for both Fintech disruptors and traditional banks, a very significant upsurge in the digitization of the global banking services will be integral to restoring some semblance of normalcy, post Covid-19.

Agile, low cost, accessible and egalitarian

In the road to recovery, post Covid-19, if those most vulnerable at the bottom of the economic pyramid were to fall down, the entire edifice would collapse. With 36 million unemployment claims reported in the US – ostensibly the world’s leading economy – such a possibility cannot be dismissed as alarmist. At such a time, the sizable injection of liquidity, which governments around the world have initiated, needs to be bolstered by blanket financial inclusion and flexible payment options. It is in this context that Fintech has emerged as an enabler of the most appropriate solutions for navigating the current crisis, as well as ushering in a world of empowered new possibilities, beyond these immediate concerns.

As the Chairman of Innovate 1 Pay and Online Integrated Solutions, Mr Mahmood Ahmadu’s entrepreneurial vision has empowered financial inclusion across Africa. Under his stewardship Online Integrated Solutions has emerged as a ‘one-stop-shop’ for Caribbean and African businesses, and a point of contact between these regions and global markets, particularly the Middle East and Far East Asia.

Views in this opinion-ed are those solely from the guest author 

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