Vanso @ Money 2020 Las Vegas
November 2014 was a busy month for Payment Expos worldwide and Vanso did its best to keep abreast of all the technological innovations around payments and transactions. The six key themes of #Money2020 are neatly summarised below.
In terms of what is relevant to the Nigerian financial market place, Point of Sale (PoS) Evolution is timely and is our main focus in this post. With an estimated $80m spent on the initial stampede to purchase PoS machines in Nigeria, it would be assumed that adoption and usage would be widespread. Of the 200,000 0r so machines in the market, however, it has been reported that the number that are both active AND transacting regularly is as low as 10% of this total. It is unclear whether this is due to the merchants reluctance to use them due to the associated fees or down to the cardholder’s reluctance due to a latent mistrust. It is most likely a combination of the two.The following report is from June 2013 but many of the findings are still up-to-date, so this is a debate which will keep evolving:
Meanwhile many of these redundant PoS machines are gathering dust in merchant locations with little or no return on the approximate $350-$400 dollars spent on each device. Is Mobile PoS the silver bullet to crack the Point of Sale digital transaction conundrum in Nigeria? That remains to be seen and Vanso will be evaluating the available technology to see if there is a viable solution that works for merchants and consumers alike.
Some interesting research has emerged recently which evaluates the penetration and cost of the various channels for service delivery for banks in Nigeria. While the mobile channel is relatively low here, there is no doubt that the momentum is definitely mobile and this ratio will grow dramatically, the impact of PoS is negligible and is likely to remain moribund without some evaluation and innovation of the channel:
Now consider this in light of the following graphic which looks at the relative costs per channel which does not even feature PoS!
Evolution of PoS was but one of the 6 major themes to feature in Money 20/20 2014. We do not expect the CryptoCurrency debate to become relevant to Nigeria any time soon as the country tries to re-adjust to e-money and the laudable Cashless/Cashlite Initiative! There were also some interesting discussions about the changing roles of the merchant and the card scheme operators. This will be an interesting dynamic to follow as what happens in the US is likely to influence how these relationships are played out in the rest of the world a few years down the line.