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2016 is fast becoming a payment-focused year in Nigeria’s tech ecosystem considering the numerous updates in the ecosystem and the launch of new platforms, services, and the rejuvenation of old ones. The question being asked by many stakeholders is “what’s it about payment in Nigeria?”
Earlier this month, yet another payment startup launched in Nigeria to offer payment services, it’s called Amplify and its uniqueness is that it is focused on recurrent payment. The startup was incubated and enjoying the support of MEST Incubator. In an exclusive interview with Segun Adeyemi, Co-Founder of Amplify, he said in spite of the numerous recent happenings in Nigeria’s payment ecosystem, there are still avenues for several ‘firsts’ for Amplify.
“While most payment gateways in Nigeria are focused on ecommerce, we seek to automate recurring type transactions that currently happen via cash, standing orders and postdated cheques. Amplify is the only Nigerian payment gateway that is built specifically for accepting and managing recurring payments online,” he said.
According to him, Amplify helps businesses manage their customer’s subscription. He added that the platform allows them (customers) to create, view, upgrade, monitor, cancel, and analyze different subscription plans.
“Amplify is the only Nigerian gateway that allows businesses to connect their existing third party payment gateway (eg. Interswitch Webpay or Unified Payments) to take advantage of our other value added services,” he said.
It also provides businesses with insights and analytics that are specific to subscription businesses – such as revenue forecasts, churn rate, MRR, customer loyalty reports and more.
But why focus on recurrent payments?
Adeyemi said the decision to focus on recurrent payment was as a result of their realization of the ignored big opportunity.
“We have seen several traditional subscription type businesses pivot and explore other business models just because there was no payment solution that effectively supports them,” he said.
He added: “Our research and estimation show that recurring type of payments in Nigeria are worth over US$32-billion annually. This includes payments like monthly pension contributions, insurance premiums, loan repayments, monthly tithe contributions, cable subscriptions, internet service subscriptions, gyms and membership clubs fees and many more. A bulk of these transactions happen manually and require the customers to remember to initiate these payments on a regular basis. We are automating these processes and helping these organisations manage the payments thereby making life simple both for such businesses and their customers.”
Adeymi affirmed that they are focusing on ensuring that subscription model becomes a simple and viable option for businesses in Nigeria.
“This extends beyond just a payment gateway that supports recurring and automated payments, but providing a platform with the unique tools and features that are tailored towards helping subscription-based businesses and organizations that need to accept recurring payments.”
Do Nigerians trust local payment ecosystem enough to try doing recurrent payment online?
Adeyemi spoke in the affirmative and he supported his position by adding that Nigerians are increasingly carrying out transactions online.
“Last year, the value of electronic transactions increased to N48.93 trillion up from N43.85 trillion in 2014, which represents an increase of 11.6%,” he said. “With respect to recurring transactions specifically, there is a fast growing, sophisticated middle class, that already carry out one form of recurring transaction or the other, even if not online. There is also a large number of compulsory payments like loan repayments that happen on a recurring basis. Imagine Nigerian returnees who are used to paying for goods and services on a subscription basis that are constantly frustrated that a solution like ours didn’t exist.”
He added that unlike before, there are now a number of payment methods that supports online recurring payment that didn’t use to; and regulatory policies around the cashless economy are now supportive of automated debit using these different payment methods and seriously driving the cashless economy.
“As the penalty on cash transactions continue to get stiffer, more transactions will happen electronically and the market will continue increase,” he said.
He also affirmed that the future of the space has bright prospects.
“More innovative solutions by businesses will also drive consumer adoption faster than anticipated. People will be driven to carry out more electronic transactions, when the solution is really worth it,” Adeyemi said. “For example, a lot of Nigerians were skeptical about loading their cards on an app before the introduction of Uber. We believe there is a growing demand and the market is ripe enough to support recurring payments”.
Future prospects of payment in Nigeria
Adeyemi was confident that Nigeria has a lot to gain from its booming payment space – one of such is using the attractiveness of the payment industry to drive financial inclusion and to support the growth of businesses.
“A truly efficient payment system enables trade within a country. Another way to harness the attractiveness of the industry is to basically create an enabling environment for business and commerce to thrive,” he concluded.