Nigerians switch to virtual banks like commercial banking apps, USSD crashes amid Naira scarcity
Nigerians are shifting their banking needs to fintech as banking apps and unstructured supplementary service data (USSD) remain unreliable amid the current cash crunch. This has made the likes of Kuda, Opay and Palmpay, among others, toast to Nigerians who are now dependent on cashless transactions.
From businesses looking to receive instant value when their customers transfer funds to individuals tired of waiting hours for merchants to confirm payment before they can leave after purchasing goods, fintech has now become the saving grace.
This has also become the harvest time for fintech, which had apparently operated on the fringes when Nigerians still preferred the “known devils to the unknown angels”.
Apart from fast transfers on the fintech apps, which have not become overcrowded like the banks’ apps, many Nigerians are rushing to fintechs for their zero-cost transfers, which is another concern for many who now have to make multiple transfers daily. basis in the absence of cash.
Frustrated with banking apps: Many Nigerians now on the fintech platforms were pushed by the frustration experienced with banking apps and USSD since the onset of the current cash crunch.
For example, Chinoso Eboh, who runs a gas filling business in Lagos, always obliged his customers with the option of transfers even before there was scarcity of cash. With his GTBank account number boldly written at the entrance of his shop, it was clear that he was ready to receive a transfer. But while a customer was about to make a transfer to his account recently, he quickly stopped the customer and gave him a Palmpay account instead. Asked why? He explained:
- “I’ve had problems with my GTB account since this cash shortage started. If a customer transfers, I might not see it until the next day and this has always caused problems. It was one of my customers who told me about Palmpay. I opened the account in the middle of February and I have received my payment immediately, the only problem now is that if the customer uses a commercial banking app, sometimes they still find it difficult to send money to me because of the problem with their app. »
For Cyriacus Okeh, who runs a provision shop, his frustration was not only in receiving money from his customers but also in paying to stock the shop. But he admitted that he never had any problem with his Zenith Bank app until the naira scarcity problem started and it became difficult to open the app let alone transfer money.
- “I had to open an Opay account because my Zenith banking app has become very unreliable. Many times I found it difficult to open the app and it caused a lot of delays every time I went to the market.
- “Although most of my clients now use transfers to make payments, it became very difficult to verify. I lost more than N10,000 in one week in February from money sent by clients, which I never received and the clients insisted that they had been debited, they even showed me their debit alerts.
- “With Opay, I credited immediately and they don’t charge me. Another good thing about it is that my phone number is my account number, so I don’t have to remember the account number. he said.
Idowu Ayanwale’s experience is no different even though she only used her First Bank app for payments. According to her, sometimes for a whole day, the app would not open and it became very difficult for her to make purchases even when she had the money in her bank account.
- “It was one of my friends who told me about Kuda. I tried it and I can say it is far better than my banking app. The transactions are seamless and I no longer have problems buying things without cash. she said.
The banks’ facilities weighed down by the pressure
Since the onset of the cash crunch at the end of January this year, customers of major banks in the country have had unpleasant experiences while trying to transfer funds or carry out any kind of transaction on their mobile apps.
Many were stranded due to non-availability of cash at ATMs and even over the counter, while transactions over the apps have become a nightmare.
While in many cases the apps won’t open at all, in cases where they do, it becomes impossible to make a transfer. In other cases where the customer can transfer, the intended recipient is not credited and this becomes a problem. Apart from the apps, there has also been pressure on USSD, which is an alternative transaction channel, leading to an increase in failed transactions over the channel.
A bank official confirmed to Nairametrics that the surge in online transactions was beyond the capacity of the banks’ IT infrastructure, hence the errors. According to him, all the banks would need to upgrade their facilities.
- He said the banks would have been able to handle the situation better without the lack of manpower in their IT departments. He noted that the IT departments of most banks have been impoverished in recent times due to the ‘japa’ syndrome which led many of the IT staff in the banks to resign to go abroad.
A warning for fintech
While fintech is currently the darling of many Nigerians, an IT expert John Akinlade said they must also look at their capacity unless they become like the banks and start having the same problem of consistent transaction failure.
- “This is the time for fintech to start expanding its capacity to cater to more customers because one thing is clear: the days of fintech acting as appendages to banks are over. Nigerians can now see what they are missing out on and many have realized that their banks cheated them through constant accusations.We can say that fintech are the main beneficiaries of this cash shortage, but they must not let this go over their heads and then forget to expand their capacity. Akinlade said.
The cash shortage in Nigeria has highlighted the importance of digital payments and the potential of fintech to drive financial inclusion and promote economic growth.
However, as more Nigerians embrace digital payments, it is important for fintech companies to expand their capacity to accommodate more customers and ensure that they do not become like the traditional banks with issues of consistent transaction failure.
With the right investments and policies, the fintech sector can continue to thrive and contribute to Nigeria’s economic development.
