Here’s a simple question: How many mobile money agents are in Nigeria at present? Well, the answer is not so simple and it depends on who you ask.
For starters, if you ask two of the institutions that are at the helm — Central Bank of Nigeria (CBN) and Nigeria Inter-Bank Settlement System (NIBSS) Plc — the total number of agents enrolled as at December 2019 is 266,039, up from 38,416 a year prior.
It seems pretty specific, doesn’t it? That’s because it is, though the data might be outdated as it was compiled more than 6 months ago. But things start to get complicated when you examine the numbers put forward by some of the licensed Mobile Money Operators (MMOs) themselves.
The Nigerian mobile money space hosts both bank-led and non-bank operators, some of which have been existing since 2010. Deposit Money Banks (DMBs) like Access Bank, Union Bank, FCMB, Zenith Bank, Ecobank, and GT Bank — some of which are among the country’s biggest banks — reportedly have a combined 14,600 agents.
FirstBank’s popular agent network, Firstmonie, claims between 32,000 to 45,000 agents present in 754 of the country’s 774 Local Government Areas (LGAs) with over 500,000 unique customers daily across the country.
Paga, one of the pioneering fintech startups that has been building agent networks since 2010, currently has around 25,000 agents. The biggest telco in Nigeria, MTN, launched a mobile money service known as MoMo last year.
Although the company wouldn’t reveal its actual numbers to WeeTracker, there are indications that MTN’s MoMo Agent network spans all the LGAs in the country.
Another MMO, PayCom Nigeria Limited (or OPay, as it is popularly known), which has been particularly aggressive about capturing the lion’s share of Nigeria’s consumer fintech segment, made a startling declaration early last month when it claimed it now has over 300,000 agents across Nigeria, all by itself.
OPay’s neck-turning declaration also has the fintech firm’s Country Manager, Iniabasi Akpan, recently revealing that the business now handles over 60 percent of mobile money transaction value and volume in Nigeria while boasting 5 million app users on its platform in another tweet.
These aren’t exactly “impossible” numbers. Fintech companies all over the world do have a thing for throwing numbers about, and most of the time, it makes sense. But this time, it’s hard to make the figures make sense.
Make it make sense
As of December 2019, official data from the CBN has it that there are a total of 25 licensed MMOs in Nigeria, all of which have integrations with NIBSS for interoperability. PayCom is one of these 25 MMOs.
Collectively, those 25 MMOs collectively account for the 266,039 agents located across the country as of 6 months ago. Now, we have a single MMO which only arrived in the middle of 2018 claiming that it currently has up to 300,00 agents all by itself. Well, that’s the OPay story.
If this were to be correct, it would mean that OPay needed only the first few months of what has been a generally rocky year to single-handedly amass more mobile money agents than all the other 24 MMOs combined. We’re talking about the year 2020 when the country effectively shut down for almost 2 months.
If this were to be correct, it would mean that there are now well over 500,000 mobile agents in Nigeria.
Thus, the Shared Agent Network Expansion Facility (SANEF) — an initiative of the CBN which has a mandate of achieving 500,000 agents by December 2020 — should be thanking OPay for basically doing 50 percent of the job. SANEF should also be rolling out the drums for hitting its target with months to spare. Do you hear the drums? Thought so.
“If we define an agent as someone who has a physical store and can perform mobile money and bank transactions for customers, which is the CBN definition, then, No. No company has 300k agents. If they did, we would see them in the field all day, everywhere.”
Those were the exact words of one top official at a leading fintech firm in Nigeria who spoke to WeeTracker on condition of anonymity.
Last October, TechCabal quoted Osagie Alonge, Director of Growth at OPay, as saying: “An agent is someone who uses the OPay platform to offer agent banking services and makes a profit from it. For us, after installing the OPay app they have to do a KYC and agent registration.”
This raises questions about how OPay goes about building its agent network which reportedly grew from 630 active agents in August 2018 to less than 5,000 in December 2018, to 40,000 in July 2019, to 100,000 in September 2019, and 300,000 most recently.
How does the startup keep count? Is it possible that its agents are outside the CBN’s radar?
WeeTracker approached the CBN, NIBSS, and SANEF for comments on the possibility of a single MMO solely accounting for up to 300,000 agents in Nigeria presently.
While the CBN and SANEF did not respond, NIBSS told us that such an MMO does not exist and if it did exist, it is not among the MMOs licensed by the CBN. In which case, someone is probably doing something that is technically illegal.
That was pretty much all they were willing to volunteer on the matter as a request for data on the state of mobile money in Nigeria for the first 6 months of 2020 was turned down. So, to quote a redacted version of Ariana Grande’s famous tweet: “What the f*** is going on?”
The game of numbers
Fintechs like to play the numbers game and why wouldn’t they? It’s an exciting game after all. The problem? That’s either when everyone begins to claim numbers that do not add up or when the numbers start to seem outrageous.
Backed by Opera, Opay kicked off in Nigeria in 2018 after acquiring a controlling stake in the then-beleaguered fintech company known as PayCom, which was founded by Telnet Nigeria in 2010.
Beginning in July 2018, OPay started using a network of agents to take its financial services to Nigerians while eyeing the huge unbanked population. By early 2019, it took things to another level.
Within a short period of time, OPay raised up to USD 170 Mn in funding while aggressively pursuing growth across several verticals including e-hailing, food delivery, payments, and many others. This was to push the wide-spread adoption of its digital wallet.
No doubt, the startup sort of waltzed into public consciousness in such a short time but there have always been questions around the company’s seemingly bloated figures.
While announcing its funding round in July 2019, the company disclosed that it processed USD 5 Mn worth of transactions daily. In August, the then-Director of Operations at ORide, Ridwan Olalere, said the figure had doubled to over USD 10 Mn daily.
During Opera’s Q2 earnings call in August 2019, Chief Financial Officer, Frode Jacobsen, revealed that OPay’s daily transaction value was around USD 7 Mn. Three different figures, but that’s not the point.
To take the cautious approach, assuming OPay did at least USD 5 Mn daily between January and December last year, that roughly amounts to USD 1.8 Bn (NGN 695.5 Bn).
For context, Paga has been around since 2012 and has reportedly done USD 4.16 Bn (NGN 1.5 Tn) in transactions to date. Flutterwave, the B2B fintech company, says it has processed over USD 2.5 Bn (NGN 900 Bn) after 100 million transactions since 2016.
WeeTracker reached out to Paystack — a Nigerian payments processor that is understood to be processing OPay’s transactions — to verify the numbers. Paystack declined to comment.
Six months ago, OPay’s Country Manager, Akpan, revealed some “facts” behind the company’s business at a Digital Summit organised by KPMG in Lagos. One of his claims was that the company had hit 100,000 agents as of September 2019 and has gained 66 percent share of the market volume.
But this does not quite fit into the country’s official statistics which placed the total number of mobile money agents in Nigeria at 147,093 between January and September 2019.
By taking out OPay’s self-acclaimed 100,00 agents, there will just be 47,093 agents left to go around. Not enough to account for FirstMonie’s 45,000 agents, Paga’s 24,000+ agents, and the 14,600 agents associated with other bank-led mobile money services in the country, not to mention other MMOs.
What’s that saying: “Numbers don’t lie, people do,” right?
What’s going on, really?
An explanation for OPay’s staggering agent numbers is that the company is probably piggybacking on other established MMOs but nowhere has the company ever made any such explanation.
Another possible explanation for OPay’s self-acclaimed domination of the mobile money space is that despite the “Lagos Okada ban” which rocked the company’s most visible vertical, ORide, the startup has always been about payments and has successfully penetrated the market with serious visibility offline. But this is too vague to justify the numbers.
Akpan even said that despite the decline of ORide and the financial shocks that came with COVID-19 and consequent lockdowns, the company’s core payments business is having its best year yet, growing 400 percent in April 2020 compared to a year ago. Quite plausible, but still unverifiable — mostly because data on e-payments in Nigeria is somewhat foggy, and in some cases, way outdated.
For example, checking the CBN’s website for available data on non-cash retail payment channels in Nigeria takes one back to the end of June 2014. Ironically, that’s the most recent data. Could it be that such data gaps are providing the leeway for institutions to game the system? Perhaps we’ll never know.
It’s symptomatic of a bigger problem, one that has something to do with the uncertainties that enshroud the methodology and metrics backing Nigeria’s e-Payment statistics. These uncertainties are especially evident in the discrepancies surrounding mobile money data.
By definition, Mobile Financial Services (MFS) or Mobile Money refers to a range of financial services that can be offered across the mobile phone. Three well-known forms of MFS are mobile money transfer (MMT), mobile payments, and mobile banking.
While MMT addresses person-to-person money transfers, mobile payments refer to person-to-business payments that are made with a mobile phone. Mobile money agents are typically fronts for depositing and withdrawing physical cash. In many cases, they also assist with payments.
Fundamentally, what constitutes mobile money transfer, mobile payments, and mobile banking in Nigeria is still a grey area, as it appears they all get mixed up.
Indeed, a high-ranking official at one of the top fintech companies in Nigeria, who spoke to WeeTracker, said, “Do we know the total mobile money transactions in Nigeria? No one has this number.”
On the NIBSS website, there is up-to-date data on the value and volume of “all mobile inter-scheme transactions” — a combination of all the MFS. But the most recent specific data on mobile money transactions is six months old.
According to the CBN’s statistics, the most recent mobile money data available is dated December 2019. The total transaction volume (Jan-Dec 2019) is approximately 377.3 million (up from 87.1 million in 2018) and the total transaction value (Jan-Dec 2019) is NGN 5.1 Tn (up from NGN 1.8 Tn).
We’re halfway through 2020 and there’s still no data for the current year. When up-to-date numbers do arrive, it is hoped that everything will add up. If they do, then it makes perfect sense. If they don’t, it would imply that someone is not telling us everything.
For now, though, it seems like nothing makes sense and it’d be best to take the numbers from OPay and others with a pinch of salt.