What is the largest market in Nigeria right now? Perhaps Lagos you may note. That is wrong – the largest market in Nigeria right now is Facebook Corp. Facebook Corp hosts excess of 30 million Nigerians users, far more than the population of Lagos State.
Within five years, most of the users would use messaging for commerce. Facebook Messenger would anchor those within Facebook while WhatsApp would drive the business outside of Facebook. When you add Instagram, you would agree that Facebook Corp is the largest market for any Nigerian consumer business.
Ecobank and Zenith Bank want to launch Facebook Messenger banking with MasterCard. That is a good move. As Konga learnt, its main competitor was not really Jumia but Facebook which took many of its marketplace customers. These banks want to reach out to the small businesses where they are, and most are within Facebook Corp.
“Brands and developers around the world are turning to messaging to connect with the 1.3 billion people who use Messenger each month,” said Kahina Van Dyke, Director of Payments and Financial Services Partnerships at Facebook. “We are pleased that MasterCard is developing a service on the Messenger Platform to help small merchants use messaging to manage their business and connect with their customers.”
According to research done by The Fletcher School and Mastercard Center for Inclusive Growth, of the $301 billion of funds flow from consumers to businesses in Nigeria, 98 percent is still based on cash.
That is the opportunity, and there are rooms to grow digitally and electronically. Some banks are plotting strategically, going ahead to take advantages where these customers are located:
“In line with our goal to serve 100 million Africans by the end of 2020, Ecobank is delighted to collaborate with Facebook and MasterCard to enable underserved and unbanked micro-merchants with the opportunity to open an Ecobank account almost immediately and begin to receive instant payments using Ecobank Masterpass QR on the Facebook Messenger platform…,” said Patrick Akinwuntan, Group Executive, Consumer Bank, Ecobank Group.
“Our Bank is partnering with Facebook and Mastercard to introduce Masterpass QR as a means of driving financial inclusion and creating a new payment ecosystem for MSMEs and consumers,” said Mr. Peter Amangbo, MD/CEO of Zenith Bank Plc. “This initiative will help us encourage financial inclusion within the country in line with the strategic thrust of the Central Bank of Nigeria (CBN). Buyers and sellers now meet and conclude transactions in-store, online and on social media, so we are ensuring payments can also be made on these platforms via QR codes, without having to log onto other solutions or even take a break from what you are doing on Facebook.”
Note how these banks mentioned Facebook – yes, they are actually working directly with Facebook in these products. This goes beyond MasterCard as they would not have mentioned Facebook if there was no direct coordination with Facebook. And Facebook would not be involved if there is nothing there for it. No matter how you see it, Facebook is finding ways into Nigerian banking.
This is the expected natural trajectory as the ICT utilities take over the lands. Once Facebook perfects the integration with MasterCard on Messenger, it would do same on Instagram and WhatsApp. Then, it would be opened to any financial institution that wants. MasterCard is a natural payment aggregator, agnostic of banking institutions. Facebook would be the platform while MasterCard would act as the “interface institution”[payment processing] and banks the hosts [the accounts]. The implication is that over time few would bother to notice the hosts, focusing more on the platforms [once you have set up an account and put your bank details, there is no need to even remember the bank again as the transactions would happen on Facebook while MasterCard handles the underneath processing with the banks].
The banks are doing what they have to do: with Facebook Corp, there is no other alternative – you either fall in line or you go extinct. This is going to be the future of banking in Nigeria. No one goes to a bank in China; most go to WeChat to do banking. Facebook has a plan for that in Nigeria. The plan is now under execution.