Experts predict 43% growth in fintech ecosystem – New Telegraph

by James · January 25, 2023

Financial technology (Fintech) has been projected to grow by leaps and bounds in the coming years, as it is expected to increase in revenue size by 43 percent over the next two years. Industry experts said the sub-sector will witness boom once cashless policy is enforced in the country. In the digital payments segment, the number of users is expected to reach 146.07 million by 2027, while the total transaction value in the digital payments segment is estimated to be $14.25 billion by 2023. Although the years ahead look bright for fintech in Nigeria, Analysts says that 2023 will prove to be a pivotal year for the sub-industry. According to the CEO of the Ham Institute of Cyber Security, Hanniel Jafaru, the fintech business in Nigeria is set to take a giant leap in 2023 due to the cashless policy the Central Bank of Nigeria is trying to implement. Due to the cash withdrawal limit that comes with the policy, most people will start looking at the possibility of using fintech services to carry out their transactions.

Jafaru said beyond creating virtual cards with fintech companies, individuals also had the option of creating virtual dollar cards that would allow them to do dollar transactions online. He said many had already started using virtual dollar cards made available by fintech companies. He stated that before now, to have a dollar card, the customer had to have a home account. “But for fintech companies, you don’t need a domiciliary account – you can create the dollar card and transfer your money from your regular account to the dollar card and load it using the black market rate, thus turning off the need for banking services”, he stated.

Ambrose Sartee, a venture capitalist in Lagos, said cryptocurrency was another reason why fintech would be a choice for financial transactions. He said: “Some fintechs enable individuals to make payments via cryptocurrency vircies such as Bitcoin and Ethereum. “Fintechs are integrating cryptocurrency payments into their platform; anyone who creates this type of payment system on their platform – that means users who have cryptocurrencies can pay directly to customers without having to go through the banks.” Sartee said along with the fact that Nigeria is growing, the country’s broadband penetration is growing, the Internet access speed is growing, the more people connect to the Internet, the more opportunities they will see and have the opportunity to choose. CEO of Piggybank, a Lagos-based fintech, Emmanuel Edebe, said that with the whole introduction of more artificial intelligence, there was a possibility that new fintech entrants would emerge because the cash withdrawal limit will make people see the need to strive to enter the sub-industry. “After all, it would be an incentive for people who were considering coming earlier,” he said. He said the sky was the beginning for fintech, adding that he expected 2023 to be a year of acceleration for fintech in Nigeria. Edebe said the e-naira would be another incentive as more and more people will see the need to make direct payments as opposed to using cash payments. He said he expected exchange offices to begin to see the need to have their payment machines to avoid the legal restriction. So people will prefer to go to a money changer where they can scan a barcode and make payments easier. Francis Ajuonoma, an economist, said several factors were driving the rise of fintech.

According to him, this includes the focus on underserved areas, the changing regulatory environment, APIs and customer experience. He noted that as a result, there was a lot of capital available for fintech companies to grow and expand their business, adding that such a favorable environment was expected to boost the growth and profitability of fintech this year. “It is remarkable that because of fintech, more people and small businesses have access to accounts, transactions and credit,” he said. The development of digital savings, cross-border transfer solutions and insurance also promises more income and jobs. Home to Africa’s largest population, Nigeria hosts a strong and growing fintech ecosystem largely driven by increasing smartphone penetration and a massive unbanked population. Experts said the mobile ecosystem was at the heart of fintech, driving new initiatives and collaborations, improving user experience and driving new revenue growth in key areas such as social engineering, fraud solutions, payments, digital assets, credit risk scoring and emerging technologies, including metaverse and digital currencies. According to them, the trends in the ecosystem will promote new initiatives and shape the fintech landscape.