Bold, a digital payments platform, has launched a new mobile app that it claims will transform digital payments in Nigeria. The company says it doesn’t aim to compete for a share of the existing market merely. Rather, it plans to create new markets by creating better payment solutions that reach previously untapped users.
The fintech market in Nigeria is clearly ripe for growth. On a macroeconomic level, Nigeria is Africa’s fourth-largest economy by the latest projections. Additionally, a string of socio-political and regulatory factors have helped to create a favorable environment for the growth of fintech as a major driver of the Nigerian economy. These factors include the COVID-19 pandemic, the Central Bank of Nigeria’s sustained cashless drive, a broad adoption of the internet and tech, and an expanding youthful population.
Recent figures provided by the Nigerian Interbank Settlement System underline just how much growth the industry has experienced. In 2023, the total value of all transactions processed by the NIBSS was 600 trillion Naira. This figure represented a 65% increase from 2022’s high of 387.1 trillion Naira, which represented an incredible increase of 914.3% from 2021’s transaction turnover.
Clearly, the digital revolution is alive and well, but according to Glad Akhison, founder and CEO of Bold, the digital payments industry is still operating below its potential. “We’ve studied the industry and our competition,” he says, noting, “The truth is that despite all the laudable innovation that we’ve seen over the years, the digital payment offering in Nigeria is currently far from adequate.”
Akhison and his team have identified two gaps that they aim to fill. The first is a gap in service. As he puts it, “Digital payments are currently too clunky and costly. Imagine you go to a store and try to pay for some items. You’ll have to use your ATM or make a bank transfer. Neither of these processes is seamless, so you may find that your account has been debited but the merchant hasn’t received the funds. These sorts of kinks make payments unnecessarily complex and inefficient.”
“What makes matters worse is that simple transactions like using your debit card to pay for a bar of soap are more expensive than they have to be because both the consumer and the merchant bear fees for the same transaction.”
Secondly, Bold aims to address what it has identified as a marketable gap in the reach of current digital payment solutions. Despite the astounding growth of the digital payments industry as highlighted previously, a significant chunk of the Nigerian economy remains unbanked.
According to the most recent reports from the World Bank, just 36% of Nigerian adults have access to formal financial services, leaving a huge untapped market that Bold now has its eyes on. And the company may be on to something. Smartphone and internet penetration are currently outpacing the rate of adoption of conventional banking, which means that digital payment solutions that do not rely on the infrastructure of the conventional financial system could be the banking paradigm of the future.
This is a sentiment that Akhison says drives his company’s innovation. As he put it, “We’re looking beyond being just another mobile payment app. We’re thinking of ways to completely change the way payments are done in Nigeria and across Africa, by introducing scan-to-pay devices that allow you to make payments with a single tap of a button on your phone. It’s faster, much more reliable, and appealing to all segments of the market, including those segments that have been traditionally reluctant to go to the banks.”
In addition to its scan-to-pay devices, Bold will be offering users charge-free transactions, making the cost of shopping significantly cheaper, a value proposition that is sure to lure the average Nigerian. It’s early days for the company, but with a vision this bold, Nigerian consumers will hope the company delivers on its promises.
