How growth of offline payment can drive financial inclusion

Nigeria has made significant progress in its journey towards financial inclusion, with the ambitious goal of reaching 95% by 2024. Dotun Adekunle, the Senior Vice President of Offline Business at Flutterwave, emphasizes the importance of sustaining the momentum in agent networks and offline payment solutions to achieve this target. Adekunle commended the growth in financial inclusion from 46% in 2008 to around 30-35% currently, showcasing a positive shift. The increased adoption of agency banking, rising from 80,000 in 2008 to over 1.4 million by the end of 2021, signifies the expansion of financial services to rural and suburban areas in Nigeria. While acknowledging the progress made, Adekunle emphasizes the need to address the challenges in both the banked and unbanked segments of the market to ensure holistic financial inclusion. He highlights that 60% of commercial transactions in Nigeria are still cash-based, underscoring the need to combat cash dependency and promote digital payment solutions. The interview also delves into the disruptions expected in the offline payment segment, with emerging technologies like biometrics, NFC, and QR codes poised to transform the payment ecosystem. These innovations, coupled with efforts from businesses, fintech companies, government, and regulatory bodies, are crucial in driving the shift towards a cashless economy. Adekunle emphasizes the importance of collaboration between the private sector and regulators to create an enabling environment for financial innovation. He applauds the evolving regulatory landscape, where various regulators are aligning their efforts to support fintech solutions and frameworks. The launch of the Central Bank of Nigeria's regulatory sandbox is hailed as a significant step towards fostering innovation in the financial sector. The sandbox provides a platform for testing new solutions and services, allowing companies like Flutterwave to explore and launch products even without full regulatory approvals. Adekunle expresses optimism in leveraging the regulatory sandbox to drive further advancements in offline payment solutions and enhance financial access for underserved populations. For Flutterwave, the regulatory initiatives present an array of opportunities to expand its presence in the offline payment space. The company, predominantly known for its online payment services, is strategically venturing into offline transactions to cater to a broader spectrum of users, including small retailers and informal businesses. By leveraging mobile technology, Flutterwave aims to facilitate seamless payments across various channels, including micro-enterprises and informal markets. The interview concludes with Adekunle's anticipation of increased competition and investment in the offline payment sector, as more players enter the market. With the impending influx of Payment Service Banks (PSBs) and foreign investments, Adekunle foresees a dynamic landscape in the coming years, heralding a promising outlook for the growth of offline payments in Nigeria.