Why fintech business will be lucrative in 2023
The financial technology (fintech) sub-industry is tipped to be one of the few segments of the Nigerian economy that will enjoy boundless growth in the coming years.
According to Statista, the neobanking segment is expected to show revenue growth of 43.4% in 2024.
In the digital payments segment, the number of users is expected to reach 146.07 million by 2027. The total transaction value in the digital payments segment is estimated to be $14.25 billion in 2023.
2023 will be decisive: Although the years ahead look bright for fintech in Nigeria, analysts say 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 have the option of creating virtual dollar cards that will allow them to do dollar transactions online. He said many people have 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 with 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 eliminating the need for banking services.
What experts say: Ambrose Sartee, a venture capitalist in Lagos told Nairametrics that cryptocurrency is another reason why fintech would be a choice for financial transactions. “Some fintechs enable individuals to make payments via cryptocurrencies such as Bitcoin and Ethereum.
Fintechs integrate 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 that along with the fact that Nigeria is growing, the country’s broadband penetration is growing, Internet access speed is growing, the more people connect to the Internet, the more opportunities they will see and have the opportunity to make a choice.
Emmanuel Edebe, CEO of Piggybank, a Lagos-based fintech, said that with the whole introduction of more artificial intelligence, there is the possibility that new fintech entrants will 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 considered coming earlier.
He told Nairametrics that the sky is the beginning for fintech, adding that he expects 2023 to be a year of acceleration for fintech in Nigeria.
Edebe said the e-naira will 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 expects the operators will start 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 are driving the rise of fintech. This includes a focus on underserved areas, the changing regulatory environment, APIs and customer experience. As a result, there is a lot of capital available for fintech companies to grow and expand their business. He noted that such a favorable environment is expected to boost the growth and profitability of fintech this year.
It is noteworthy that because of fintech, more people and small businesses have access to accounts, transactions and credit. 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.
