Nigeria is becoming a hotbed of mobile payments development, with the nation’s largest banks and wireless telecom companies launching a mobile payments platform this month on the heels of recent initiatives from Visa and Mastercard.

Nigeria’s largest banks, along with four major wireless telecom operators are collaborating on mCash, a mobile payment platform that asks consumers to send codes via their handsets to complete low-ticket retail purchases.

Backed by the Central Bank of Nigeria and the Nigerian Inter-Bank Settlement System, mCash relies on Unstructured Supplementary Service Data (USSD), a basic approach to texting that enables users to send funds in real time on any type of handset, including non-smartphones. Six Nigerian banks so far have also launched mCash and many more are poised to do so, in conjunction with telecom providers Airtel, Etisalat, Globacom and MTN, according to the mCash website.

The headquarters of the Nigerian central bank in Abuja, Nigeria
The headquarters of the Nigerian central bank in Abuja, Nigeria IMAGE: Bloomberg News

To participate, merchants must register with their banks to accept mCash payments, and receive an eight-digit seller code. Consumers who enroll must add funds to their accounts at outlets of local banks or bank agents, enabling them to make purchases through their linked mobile phone number by entering a transaction code, plus the retailer’s code.

Nigeria's Fidelity Bank is one of several participating banks that rolled out mCash, short for “microCash,” in Lagos after a pilot with several local merchants, Fidelity said in a Nov. 7 press release.

“MCash is a new product that further eliminates the need for cash by offering a simple digital payment solution to the customers of deposit money banks no matter the type of phone being used,” said Gbolahan Joshua, Fidelity's chief operations and information officer, in the release.

Nigeria, Africa’s most-populous country, is driving rapid development of mobile payments for diverse participants targeting a large, unbanked population. Visa in August launched the mVisa mobile payments platform in Nigeria. Mastercard, which based its first integration of Masterpass with QR mobile payment via Ecobank Group in Nigeria, recently extended that service to 32 more countries in Africa.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry