Tukur: We’re Working to Shape More Financially Inclusive Future for Africans

Kari Tukur, the Vice-President of Customer Solutions, East and West Africa, talks about fostering inclusive payment landscapes for financial transformation in Africa. Nosa Alekhuogie presents the excerpts:

Could you share Mastercard’s initiatives for advancing financial inclusion in Nigeria?

Mastercard is deeply dedicated to promoting financial inclusion throughout Africa, including Nigeria. We have introduced a range of programs and initiatives designed to enhance access to financial services, elevate financial literacy, and bolster the growth of small businesses and entrepreneurs. Our investment in technology is a critical driver of our efforts to advance financial inclusion. We are focused on leveraging emerging technologies, such as biometrics and mobile payments, to enhance the accessibility and security of financial services for individuals in Nigeria. These innovative solutions have the potential to break down barriers that hinder financial inclusion by simplifying access to financial services and facilitating seamless transactions. For example, Mastercard has partnered with Nigerian banks, merchants, and technology firms to enable contactless payments across various platforms. 

Our contactless payment solutions, including the tap on phone feature, enable swift and secure payments by allowing users to simply tap their contactless-enabled cards or mobile devices at payment terminals.

A key focal point for us is expanding access to digital payments. We collaborate closely with governments, banks, and other partners to ensure the availability of digital payment options in underserved regions across Africa, including Nigeria. Through strategic partnerships with organisations like MTN and Airtel, we provide data analytics and payment tools directly to local entrepreneurs’ phones, empowering them to manage their businesses more efficiently.

We are fully aware of the pivotal role that financial inclusion plays in promoting economic growth and creating more equitable societies in Africa. Through collaborative efforts with partners across the continent and investments in initiatives aimed at fostering financial inclusion, we are actively working to shape a more financially inclusive future for all Africans.

Could you explain Mastercard’s collaborations with local stakeholders, such as government agencies and financial institutions, to drive financial inclusion in Nigeria?

As a trusted network, we collaborate with private enterprises, government entities, and development agencies to conceive, nurture, and amplify simple yet locally relevant digital solutions. Our collaborative efforts aim to strengthen payment platforms and ecosystems, enhance financial literacy, and empower even the smallest businesses, propelling Africa’s digital transformation and creating a digital economy that benefits all individuals, everywhere.

We engage with governments as partners in developing critical infrastructure across various sectors in Africa, including transit, SMEs, disbursements, and acceptance. Through Mastercard’s Centre for Inclusive Growth, we actively support a range of initiatives that particularly benefit vulnerable communities. In Nigeria, Mastercard is actively promoting the adoption of low-cost digital acceptance solutions, such as contactless payment through tap-on-phone and Mastercard QR pay by link.

In addition to government collaborations, Mastercard partners with financial institutions like Accion Microfinance Bank (AMfB) to extend loans and savings products to low-income microentrepreneurs. Through a $12 million grant from the Mastercard Impact Fund and our partnership with Accion, we aspire to improve access to financial services for millions of individuals, including merchants, empowering them to expand their businesses. This collaboration not only addresses the financial needs of underserved individuals but also strengthens the capacity of financial service providers to cater to the unique requirements of vulnerable populations.

Moreover, Mastercard collaborates with fintech firms in Nigeria to drive financial inclusion. Our Mastercard Start Path programme, for instance, enables collaborations with fintech startups like MAX, a motorcycle-share company, to offer digital payment capabilities and installment plans. These collaborations enable traditionally unbanked individuals, such as motorcycle riders, to access financial services and build credit profiles over time.

An essential aspect of our initiatives is supporting small businesses and entrepreneurs. Our commitment to empowering these segments is evident through programmes like the Start Path accelerator, which offers valuable resources and support to startups operating in fintech and related sectors. This commitment underscores our dedication to driving economic growth in Africa.

Nigeria has a significant unbanked population. What specific strategies or products has Mastercard implemented to reach and serve this segment of the population?

Nigeria’s substantial unbanked population has prompted Mastercard to implement specific strategies and products that recognise the importance of financial inclusion for economic growth and development, particularly in Nigeria. To address the challenges faced by this segment of the population, Mastercard has executed targeted approaches.

A key initiative is the development of Community Pass, an interoperable digital platform aligned with our commitment to connecting one billion people to the digital economy by 2025. Community Pass addresses infrastructure obstacles associated with digitising rural communities, such as unreliable connectivity, limited smartphone ownership, and inconsistent identification. This platform facilitates digital access to markets, financial services, and real-time pricing information for smallholder farmers across Sub-Saharan Africa. Our dedicated digital platform, Mastercard Farm Pass, plays an essential role in enabling this access.

Another integral facet of Community Pass is the Wellness Pass feature, enabling the secure digitisation and storage of health records on a portable, offline chip. Our objective is to register 30 million individuals on the Community Pass platform by 2027, with a specific emphasis on enrolling 15 million people across Africa, including underserved and remote communities, particularly women. Through this initiative, we aim to enhance their access to digital commerce, agricultural markets, healthcare services, and humanitarian benefits by providing digital identities and an acceptance network. To date, we have empowered approximately 2.4 million individuals, predominantly smallholder farmers, to participate in the digital economy in Africa.

Mastercard’s role in this context includes partnerships with diverse stakeholders, including financial institutions, governments, and non-governmental organisations (NGOs). Through these collaborations, Mastercard facilitates technological solutions that enable financial institutions to deliver digital financial services to rural and semi-rural communities. For instance, our collaboration with financial institutions has led to the provision of mobile banking services, allowing users to conduct transactions using their mobile phones, eliminating the need for a physical bank branch.

How can partnerships between financial institutions, technology providers, and government entities contribute to accelerating digitisation efforts in rural and semi-rural areas of Nigeria?

The significance of partnerships between financial institutions, technology providers, and government entities in expediting digitisation efforts in rural and semi-rural areas of Nigeria cannot be overstated. These collaborations are pivotal in connecting small and medium-sized enterprises (SMEs) to the digital economy, driving digital innovations, and fostering transformative change. These partnerships align with Mastercard’s core pillars, encompassing the advancement of digital payment solutions for small businesses, strengthening financial security, delivering data-driven solutions, and ensuring the protection of the digital payment landscape, businesses, and customers.

As an illustration, the collaboration with NetPlus, a Nigerian startup participating in the Mastercard Start Path programme, has resulted in the introduction of a secure e-commerce solution. This partnership eliminates the need for consumers to carry cash for online purchases, enhancing financial security and enriching the digital payment landscape.

Furthermore, the collaborative effort between Mastercard and FCMB (First City Monument Bank) has introduced the Tap on Phone Payment Solution in Nigeria. This innovative program enables merchants to accept contactless payments using their Android smartphones or tablets, obviating the need for a separate hardware point-of-sale (POS) device. Since its launch, Tap on Phone has achieved remarkable success, attracting over 500,000 merchants across Nigeria, with a specific focus on reaching businesses in rural and semi-rural areas. This initiative reinforces digitisation endeavors in the country, underscoring the potency of collaborative endeavors in propelling financial inclusion and economic growth.

Nigeria has been on a digitisation journey in recent years. How has Mastercard contributed to this process and supported the country’s overall digitisation efforts?

Mastercard has played a significant role in Nigeria’s digitisation journey by contributing to the country’s overall digitisation efforts. The company has embraced partnerships and innovative approaches to drive growth in digital financial services, promote financial inclusion, and enhance the safety and security of online transactions.

Mastercard has also been at the forefront of embracing emerging technologies, platforms, and business models. The company has invested in digital wallets, account-to-account, and real-time payments, blockchain, open banking, and buy now, pay later solutions. These innovations have provided Nigerian consumers and businesses with a wider range of convenient and flexible payment options that go beyond traditional cards.

Furthermore, Mastercard has introduced omni-channel solutions to meet the evolving needs of Nigerian consumers and businesses. These solutions enable retailers, merchants, and small businesses to accept various digital payments, including e-commerce, QR codes, and contactless payments. By providing multiple ways to shop and pay, Mastercard supports the expectation of Nigerians to make purchases whenever and however they want.

Mastercard’s focus on innovation extends beyond payment technology. The company leverages its vast network and transaction insights to deliver peace of mind and trust through cybersecurity measures and to help businesses and governments make better decisions through data analytics. By continuously investing in emerging technologies, platforms, infrastructure, and fintech partnerships, Mastercard aims to provide a single platform capability across multiple use cases, improving operational efficiency and diversifying revenue for its partners.

In summary, Mastercard has contributed to Nigeria’s digitisation efforts by diversifying its payment capabilities, embracing emerging technologies, fostering partnerships, promoting financial inclusion, and providing innovative solutions for digital commerce. Through its initiatives and collaborations, Mastercard is driving growth in digital financial services and playing a pivotal role in shaping the fabric of commerce in Nigeria.

Looking ahead, what do you envision as the future trajectory of new payment technologies in Nigeria? Are there any emerging trends or developments that are likely to shape the payment ecosystem in the coming years?

The future trajectory of new payment technologies in Nigeria is expected to be transformative, driven by emerging technologies that are revolutionising the payment space. These advancements are bringing significant changes to how transactions are conducted, offering increased convenience, security, and personalisation. One key technology that will shape the payment ecosystem is blockchain and cryptocurrencies. Blockchain technology enables secure and transparent peer-to-peer transactions, while cryptocurrencies like Bitcoin and Ethereum provide decentralised payment systems. As these technologies gain wider acceptance globally, Nigeria is likely to see increased adoption and integration of blockchain-based payment systems and cryptocurrencies.

Mobile wallets and Near Field Communication (NFC) are also set to play a crucial role in the future of payment technologies in Nigeria. Mobile wallets on smartphones, combined with NFC technology, allow users to store payment credentials and make contactless payments with a simple tap or wave. With the increasing penetration of smartphones and the improvement of NFC infrastructure, mobile wallet adoption is expected to grow, transforming the way transactions are conducted in Nigeria.

Biometric authentication is another emerging trend that will shape the payment ecosystem in Nigeria. Technologies such as fingerprint, facial, and iris recognition enhance security and simplify the payment process by using unique biological traits for authentication. The use of biometrics for payment authorization can reduce fraud and provide a more convenient and seamless payment experience for consumers.

The integration of Internet of Things (IoT) payments is also on the horizon for Nigeria. IoT devices, such as connected cars and smartwatches, equipped with embedded payment technologies, will enable seamless and autonomous transactions. This means that Nigerians will be able to make payments without the need for traditional payment methods, as transactions will be seamlessly carried out through connected devices.

Voice-activated payments are another development that is likely to shape the payment ecosystem in Nigeria. Leveraging voice recognition technology, users can make purchases or send money through voice commands to virtual assistants. This offers a hands-free and convenient payment experience, further simplifying the payment process.

Artificial intelligence (AI) and machine learning technologies will play a significant role in enhancing payment systems in Nigeria. AI and machine learning can improve fraud detection, risk assessment, personalised offers, and customer support. AI-powered chatbots and virtual assistants can provide personalized payment assistance, while machine learning algorithms can analyse transaction data to detect fraudulent activities and enhance security. In conclusion, Nigeria can expect a future characterised by the adoption and integration of emerging payment technologies. Blockchain and cryptocurrencies, mobile wallets with NFC, biometric authentication, IoT payments, voice-activated payments, and AI-powered solutions will shape the digital payments landscape. These advancements will offer Nigerians innovative and efficient ways to conduct transactions, fostering convenience, security, and personalisation in the payment ecosystem.

 In your opinion, what are the key factors that need to be considered to sustain and accelerate the progress of financial inclusion in Nigeria?

To sustain and accelerate the progress of financial inclusion in Nigeria, several key factors need to be considered. Firstly, increasing access to financial services is crucial. This involves ensuring physical access to banking infrastructure, particularly in rural and underserved areas. Expanding the reach of branches and ATMs can provide individuals with convenient access to formal financial services. Additionally, promoting the use of digital financial services, such as mobile banking and digital wallets, can overcome physical barriers and reach a wider population.

Financial literacy and education play a vital role in empowering individuals to make informed financial decisions and effectively use financial services. Implementing comprehensive financial education programs and providing accessible resources can equip individuals with the necessary knowledge and skills to manage their finances, budget effectively, save, and borrow responsibly. By improving financial literacy, individuals can confidently participate in the formal financial system.

Tailored financial products and services are essential to meet the diverse needs of the population. Developing affordable and accessible savings accounts, microcredit facilities, insurance products, and investment options can address the specific requirements of individuals, small businesses, and farmers. By catering to their unique financial needs, tailored products can encourage greater financial inclusion and engagement.

Collaboration and partnerships among various stakeholders are critical for driving financial inclusion. This includes collaboration between government agencies, financial institutions, technology companies, and NGOs. By leveraging the expertise, resources, and networks of different entities, sustainable and scalable solutions can be developed and implemented. Public-private partnerships can also play a significant role in expanding financial services and reaching underserved communities.

Creating a supportive regulatory and policy environment is necessary to foster financial inclusion. Clear and inclusive regulations that promote competition, innovation, consumer protection, and data privacy are essential. Regulatory frameworks should encourage innovation in fintech and create an enabling environment for the development of digital financial services. By establishing favorable regulations, policymakers can facilitate the growth of inclusive financial services.

Investments in financial infrastructure are crucial for advancing financial inclusion. This includes building robust digital payment systems, ensuring reliable internet connectivity, and secure data storage facilities. Developing comprehensive financial infrastructure will enable the efficient delivery of financial services, particularly in remote areas. Prioritising infrastructure development and bridging the connectivity gap can ensure that financial services are accessible to all.

Building trust and ensuring security are paramount in promoting financial inclusion. Implementing robust cybersecurity measures, consumer protection regulations, and strong data privacy frameworks are essential. By safeguarding financial transactions and personal data, individuals and businesses can have confidence in participating actively in the formal financial system.

Lastly, it is crucial to prioritise the inclusion of marginalised groups. This includes women, rural communities, low-income earners, and people with disabilities. Tailored financial literacy programs, specific products, and targeted initiatives can address the unique challenges and barriers faced by these groups. By actively including marginalised populations, financial inclusion efforts become more comprehensive and equitable.

By considering these key factors, Nigeria can sustain and accelerate the progress of financial inclusion. Empowering individuals, promoting economic growth, and fostering a more inclusive and resilient financial system will contribute to a prosperous and equitable society.

With the rise of digital payment technologies, what challenges do consumers and businesses in Nigeria face in terms of security and fraud prevention? How can these challenges be addressed to ensure a safe and secure digital payment ecosystem?

With the rise of digital payment technologies in Nigeria, both consumers and businesses face significant challenges related to security and fraud prevention. The increasing adoption of digital payment methods exposes them to various cybersecurity risks, including data breaches, hacking, malware attacks, phishing, and identity theft.

To ensure a safe and secure digital payment ecosystem in Nigeria, several measures can be taken. First, education and awareness programs should be implemented to raise awareness about cybersecurity risks and fraud prevention measures. Providing resources, online courses, and workshops can help educate consumers and businesses about safe digital payment practices.

Second, strong security standards and practices need to be established. Mastercard has collaborated with organisations like the Global Cyber Alliance to help set baseline security controls and encryption protocols for secure digital payments. Encouraging the adoption of strong security controls, encryption protocols, and secure authentication methods will significantly enhance security levels.

Third, collaboration and partnerships between organisations, academic institutions, and government agencies play a crucial role. These partnerships can promote knowledge sharing, research, and the development of innovative solutions. Collaborative initiatives, such as the partnership between Saïd Business School, University of Oxford, and Mastercard, can equip executives with the necessary cyber knowledge and tools to effectively tackle emerging threats.    

Fourth, investing in advanced fraud detection technologies and processes is essential. By detecting suspicious activities promptly, businesses can mitigate risks. Services like Mastercard’s Ethoca Alerts, which enable quick resolution of consumer disputes, can protect businesses from potential chargebacks and fraud-related losses.

Finally, conducting regular cybersecurity readiness assessments is vital. Initiatives like RiskRecon, in collaboration with small business associations and issuers, can provide free assessment services to identify vulnerabilities and offer tailored recommendations for improvement. This proactive approach assists businesses in strengthening their security practices.

By implementing these measures, Nigeria can establish a safe and secure digital payment ecosystem. Mitigating cybersecurity risks, raising awareness, promoting strong security practices, and fostering collaborations will help protect consumers and businesses, instilling confidence in digital transactions.