Kuda, Digital Payment Platforms Accelerating Growth of Nigeria’s Cashless Ecosystem.

Gilbert Ekugbe

The recent new Naira design/cash swap policy of the Federal Government significantly impacted the Nigerian economy by instilling a behavioral shift from cash transactions to cashless exchanges among Nigerians.

Starting from 2020, the disruption of the ecosystem resulting in reduced person-to-person physical contacts to flatten Coronavirus transmission not only made the use of cashless payment solutions and platforms popular, it increased digital adoption by merchants, customers and players across the manufacturing, distribution and consumption value chain.

In the same token, the scarcity of physical cash and attendant hardship occasioned by the new currency policy midwifed by the Central Bank of Nigeria (CBN) on the heels of the February 2023 general elections also gave further impetus for increased adoption of digital payments in the country.

Cashless payments appear to have gone mainstream as more Nigerians lean toward the convenience of electronic channels including USSD, mobile apps, ATMs and POS terminals because they are fast and convenient.

Correspondingly, the space is also widening for technology-leveraged service providers like Kuda and traditional financial institutions, who are collectively the main drivers of the Federal Government’s cashless policy, as they raise the bar in innovative product development.

Through continuous rollout of innovative e-payment and digital solutions, fintechs and banks, as the backbone of the Financial Inclusion Strategy (FIS) coordinated by the CBN, are accelerating Nigeria’s journey into becoming a truly digitalised, cashless economy.

The Nigeria Inter-Bank Settlement Systems (NIBSS) recently alluded to the growing adoption of cashless transactions as it revealed that transactions worth N38.9trn were performed electronically in November 2022 through the NIBSS Instant Payment (NIP) platform.

According to NIBSS, the November figure brought the total value of NIP deals in the last 11 months to N345trn, and it was also the highest monthly transaction recorded on the platform so far. E-payment value also reportedly increased year-on- year by 50% compared with the N25.9trn recorded in November 2021.

As Africa’s largest economy, the future of a cashless economy looks bright for Nigeria. Kuda, the money app for Africans, seems to have seen that future by designing a multichannel campaign to deepen awareness of the benefits of cashless payment solutions among existing and new customers.

The ongoing thematic campaign dubbed ‘Cash Is Hard. Kuda Is Easy’, was designed with a view to engendering wider usage of Kuda app among existing and new customers who are looking for reliable cashless payment options.

According to Kuda’s co-founder and CTO, Musty Mustapha, the campaign was against the backdrop of the cash crunch of Q4 2022/Q1 2023 and the subsequent shift in consumer behaviour away from a widespread reliance on cash toward using cashless payment channels.

“The multichannel campaign was designed in a bid to increase usage of cashless payment features on the Kuda app and to sign up new customers who are looking for reliable cashless payment options,” he stated.

Mustapha added that the campaign was also targeted to deepen awareness and knowledge of the numerous cashless payment features on Kuda app including a chance for Kuda customers who have added their BVN to their Kuda profile getting 25 free transfers to any Nigerian bank or fintech every month.

Not only that, the Pay With Bank feature also allows Kuda customers to pay directly online from their Kuda account on websites and apps that accept payments through Paystack. Pay with USSD, another option also offers Kuda customers a convenient and fast alternative to make POS and online payments when transfers and cards are unavailable.

By and large, increased efforts by the government and Fintechs like Kuda and other stakeholders to widen access for the unbanked and unserved rural populations and underserved urban dwellers means more growth is anticipated in Nigeria’s cashless payment ecosystem.

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