Increased smartphone adoption to boost financial inclusion — PalmPay

PalmPay, a financial service provider, has stated that the projected increase in smartphone adoption in Nigeria is expected to reach 65 per cent by 2026, facilitating broader access to mobile money services.

Head of Marketing and Communications at PalmPay, Femi Hanson, made this announcement during a media roundtable organised by the fintech company to discuss industry issues and projections in Lagos on Friday.

Hanson highlighted that the growth in smartphone adoption would significantly enhance financial inclusion in Nigeria.

He also noted that fintech companies would leverage technologies such as digital wallets, seamless payment gateways, and USSD to improve service accessibility.

Hanson emphasised the importance of collaboration between fintech companies, regulators, and financial institutions to foster a stable financial ecosystem and address compliance issues, which are crucial to Nigeria’s removal from the FATF grey list.

He predicted an increasing demand for affordable financial products and savings services, creating opportunities for fintech companies to offer innovative solutions.

According to a recent report, Hanson also forecasted continued growth in the agency network, which has expanded from fewer than 10,000 agents in 2015 to over 1.5 million agents by 2023.

Hanson further noted that mobile money operators would increasingly deploy Artificial Intelligence (AI) to enhance customer experiences, utilising machine learning, predictive analytics, and fraud detection.

He also underscored the diversification of digital services in sectors such as insurtech, health tech, and savings and wealth management, all provided on fintech platforms.

Hanson expressed optimism that these developments would further financial inclusion and strengthen Nigeria’s financial sector.

In terms of PalmPay’s progress, Donald Ubeh, Head of Risk and Compliance at PalmPay, stated that the company had reached 35 million users and over 1.2 million businesses.

Ubeh highlighted that PalmPay had made affordable financial services more accessible, driving the adoption of a cashless economy while empowering Micro, Small, and Medium Enterprises (MSMEs).

He also pointed to the growth of the digital economy, driven by fintech companies, as a key factor in promoting financial inclusion and improving livelihoods.

According to Ubeh, Nigeria had 150 million active mobile phone lines in 2023, with a financial inclusion rate of 74 per cent, up from 51 per cent in 2016.

He noted that agent banking accounted for 60 per cent of all mobile money transactions, with over two billion dollars in foreign direct investment and 1.5 million mobile money agents as of 2023.

He also reported that over one trillion dollars in transactions were processed in 2023, with one billion transactions processed through the Nigeria Inter-Bank Settlement System (NIBSS).

On the regulatory front, Ubeh acknowledged that while regulators had established the necessary framework for the fintech ecosystem, challenges remain in adapting regulations to keep pace with technological advancements, addressing cybersecurity risks, and ensuring financial services are inclusive.

Ubeh also stated that Nigeria had fulfilled over 50 per cent of the requirements needed to exit the FATF grey list, which the country was added to in February 2023.

Additionally, Chika Nwosu, Managing Director of PalmPay, reported that the company had facilitated six billion dollars in monthly transactions, with 16 million active users.

Nwosu noted that PalmPay had achieved a 99.5 per cent transaction success rate and a customer retention rate of 75 per cent.

He described PalmPay as a leading force in driving cashless payment adoption in Nigeria, leveraging advanced technology to provide world-class financial services to the mass market.

Nwosu expressed confidence that PalmPay would continue to expand its services and presence, having already established a foothold in multiple markets.