The Chief Technical Officer of Synkron Solutions Limited, Oladipo Olasemo has said that micropayments can drive the future of the Nigerian economy if applied judiciously.
Olasemo told Thisday that the revenue potential inherent in micropayments is huge as it covers both the banked and the unbanked populace. The majority of the revenue is expected to originate from the unbanked .
According to Olasemo, there are over 64 million Nigerian adults who have never been banked, and the private sector understands that the Nigerian microfinance industry estimated at NGN N900 million is profitable.
The unbanked money in circulation is estimated to be N1.2 Trillion as at May 2009, this figure according to him is growing and would serveto strengthen the financial system if platforms such as micro payments are used as a tool to channel such money into the mainstream economy.
Micropayments are regarded as financial transactions involving very small sums of money. Globally, micropayments refer to transactions of less than 12 USD.
He stated that the major challenge facing the feasible application of micropayments is the need to keep costs for processing individual transactions low which is impractical when transacting very small sums of money typical of the nature of the micropayment system.
Several attempts have been made to make such systems financially feasible to the providers such as the bill to phone model that companies like zong and boku have employed.
Largely, micropayments have been used for online transactions in the social community space on websites like www.facebook.com where users can purchase virtual items in games like mobwars, premier football and Farmville to name a few. It's foray into the print media for pay per view content has been very discouraging as users would simply navigate to another website where they can get the content for free.
According to him, one important aspect of micropayments is the fact that its definition varies from person to person. Micropayments has had its share of attempts at standardisation, notable among these attempts is the micropayments per fee specification of the W3C (World Wide Web Consortium) which includes a Common Markup for Micropayment Pay-Per-Fee Links as well as a description of a wallet handler that serves all requests for the per-fee service. However, he said that since vendors implement disparate proprietary micropayment infrastructure, this has prevented the adoption of W3C's specification.
“In Nigeria, online payment has been wrought with several cases of fraud, especially with the use of debit cards. Consumers are no longer comfortable with such medium of payment and often ask themselves if it is worth it to expose private information to consummate transaction on the web for low value transactions. “Some people argue that billing for small portions of a product or service reduces the need for security. In this context, security is defined here to be the ratio of security cost to protected value of the transaction.
“The security challenges above beg for a new channel to consummate low value transactions that is radical and innovative enough to provide musicians a platform to sell their music, software developers their small applications, photographers their pictures and all other content providers a medium that is fast, convenient and easy to use without the restrictions of the traditional payment systems”, he said. |