Solomon Amadi, vice president for processing at Moniepoint, talks to FinTech Intel about the growth of the company, the payment infrastructure in Nigeria, and financial inclusion across the continent
It is backed by investors including QED Investors, British International Investment and New Voices Fund. It has an annual revenue of more than US$1b.
Can you tell me about Moniepoint?
Moniepoint is a business bank. We provide business banking solutions and means to make and accept payments for businesses, such as point-of-sale devices and accounts.
What is your role there?
I’m the vice president of processing and infrastructure, so I cut across several teams, payment processing, finance and switching functions. I also manage product and engineering teams.
Moniepoint is a massive company and growing fast. What has enabled this growth?
We have focussed mainly on providing financial services to the average business on the street. We operate in Nigeria, which is the most populous country in Africa (220m people).
Moniepoint provides services in remote areas where people are unable to access banking services. One reason for our growth is our speed of execution. COVID also helped people to accept digital payments.
We also have a very strong distribution network across Nigeria. That helps us to manage our relationships. We have very good relationships. This is important because our business is one that is built mainly on trust. Businesses need to trust our products to make sure they don’t have failed transactions or missing funds.
Execution is also important. We make sure we have the right infrastructure, tools, people and motivation to make sure everything works as seamlessly as possible.
You said that trust is very important. Can you expand on that?
Trust is important in any business. One of the hardest parts of business in Nigeria is gaining trust. To get the average guy on the street to trust your platform, so that they keep their funds with you or that they use your system to run their business, is not easy. We know our businesses all the way to the doorstep. We are one call away.
Being first to market also helps. Other companies catch you up, but if your customers trust you, they will stay with you.
How is the fintech sector faring in Africa?
There is an upward trend of people using fintechs. Earlier this year in Nigeria, a regulation was passed that drove people toward digital transactions. This put some limits on the amount of cash you can withdraw from the bank.
COVID also helped, as people got a taste of making digital payments and stuck with it. Fewer people go to branches to make transactions now.
There are partnerships between banks and fintechs happening, and the number is growing as there is less friction to make it happen.
One problem fintechs now have is that banks are trying to spin off their own fintech companies, which then become competitors to the fintechs.
Thankfully, we are now not a fintech but a bank. We are fully regulated so we have everything we need.
It’s worth noting that Nigeria has a very large market, so we need many companies to make sure all the consumers can be serviced.
Can you talk about financial inclusion and access to credit in Nigeria and Africa?
There is still a lot of underbanked people in Nigeria. At Moniepoint, we are trying to bank a lot of these people. We bank a lot of businesses. From an access point of view, it is easier to get to the merchant, than it is to the consumer. If all the businesses accept digital payments, it can drive transformation. This will make it easier to bank people. But there’s a lot of ground and infrastructure to cover in Nigeria.
We also give out credit to businesses to help them grow. We have been doing this for three to four years, so we have a lot of accurate data on who we can give credit to, and how much we can provide.
With the underbanked population, it is mainly people in the rural areas that have limited access to banks. They are people we have tried to service by providing means to make payments.
There is also the demography of age. Young people often move to the cities, leaving older people in rural areas who are mostly unbanked.
To help solve this problem, Moniepoint is present in all 36 states in Nigeria, plus the federal capital in Nigeria.
How has the payments infrastructure improved in Nigeria?
There has been a lot of development. There has been an increase in the adoption of digital payments and transfers, as people have become more comfortable with it. That is the main driving force of business, as people are able to use cards to make payments and transfer money digitally.
As for contactless payments, they haven’t really been adopted in Nigeria yet. But that is an area we are looking at. As people come to understand this technology and get used to it, it will be adopted. But the first step is to make sure we have the right data, and then make the shift at the right time. The average person on the street needs to be very comfortable with digital channels before you start doing contactless payments.
What needs to be done to increase financial inclusion in Nigeria?
It is increasing in Nigeria and is pretty good now. More people now have access to banking and financial services. It is increasing in other countries in Africa too, like Kenya with MPESA (a mobile money service).
Still, governments and fintechs can continue to help to provide financial services to underserved people.
Will Moniepoint branch out into personal banking in the future?
When you become a bank, there is always the thought in the back of your mind: can we serve the direct customer? Maybe in the future. Currently, I am focusing on building the business side of things. There are a lot of organisations that already do personal banking. But that doesn’t mean we can’t enter that market and do it better.