 All right, we're back with breakfast and plus CV Africa and of course a very interesting conversation up next We talked about payment gateways and of course the financial sector in the country how medium small medium micro and medium scale enterprises rather can participate in this digital Financial sector in terms of payments. Well, Nigeria has over 44 million micro small and medium enterprises These are known as MSMEs and most of them lack access to the digital economy a global interconnection of Computers and networks network infrastructures through which goods and services change hands across the world. Well The in recent times the central bank of Nigeria has introduced Measures to deepen and expand financial inclusion to connect Nigerian businesses to the digital world Also the Nigerian Communications Commission as well as the central bank of Nigeria They have partnered to ensure that licensed mobile network operators and make Available telecommunications infrastructure and services to deposit money banks To drive micro small medium and large businesses now today's global economy is driven in the digital space provided by companies with The requisite infrastructure for electronic payments and e-commerce How can micro small and medium enterprises in Nigeria gain access to the digital economy? It's a focus on this first segment of the second discussion rather on the breakfast this one I'd like to say good morning to our guest who is with us in the studio We're so happy to have him after some some years or months of having your own zoom Shagwin shopping time is the chairman of ACT network and but for the purpose of this discussion, you know How do you like the listeners to the school dress you my principal partner would be John Scott consulting Where where a financial consulting firm amongst other things, you know, so trusty this falls very comfortably within me I wear a lot of hats But I mean you are saying to me before you we started a conversation It was quite easy for you to get to the office because the roads are quite free public holidays. All right So happy holidays to you. Thank you. All right Independence in Nigeria. I'm telling maybe if we had more of these payment gateways working for the MSM is people stay at home more Absolutely, and it was to be more free like you wanted to be When we talk about payment gateways for those who want to know what we mean, what are the payment gateways? So basically, you know When you have these types of conversations, it's important to recognize that we're speaking with a large vast public So some will be experts and some will know absolutely nothing about what we're talking about So I usually want to come from that perspective So to the layman to the average person out there a payment gateway simply Let's look at it and break down that name. So a payment gateway So it's basically a gate that allows payments to happen between parties different parties Parties in this case will be a merchant A Customer or a buyer and then there are two their respective Sources of money Where they keep their money? So where you keep your money could be cash in your pocket It could be your bank account, you know So for the merchant usually it will be there back bank account somewhere about for the buyer It could be you have cash on you and then you take the cash there And somehow that cash, you know, maybe using a pure service can get converted and then transferred to the gentleman that you're buying from Or it could be from your bank account And then if it's from your bank account the money must move from your bank account through the payment gateway To the bank account of the merchant. So basically the gateway service providers will sit in between The various parties. I mean we've come a long way from the early days of cashless policy Was it solo though or San Ducey? Well, the two in 2012. Yes indeed. So that's all of them And people were okay. They don't want us to don't take our money away or people were not too comfortable and you know We're not understanding what it meant to wear a bit apprehensive, but we've come a long way now You're able to move around without money in pocket for it. The whole year What are the advantages of integrating the MSM is in Nigeria into the various payment gateway services in the country? Okay, so I think it's important to first of all understand that a lot of SMEs are integrated in you know some measure or the other What we want to do is to achieve a greater degree of integration For a larger number of them just like you said, you know for the four million SMEs in Nigeria is a huge number And then very crucially most of them operate in the informal economy And I think this is where the the conversation about the benefits come into play Depending on whose statistics you're looking at we all know the problems with data that we have in Nigeria But depending on who you're talking to The informal economy is between fifty fifty seven fifty between fifty five six sixty five percent of the of the size of the entire economy You know So which means the larger chunk of economic activity is not being captured by government for tax payment purposes And for data statistics generating generation purposes So if we're able to bring more of the MSM is you know using This payment gateways into the formal sector the the the benefits to the economies, you know, it's It's it's it's tremendous From the revenue side for government. It means that you can tax These people more and when we say taxes we're not talking of anything onerous As we speak today anyway most MSM is paid taxes to somebody but usually it's not government Usually it's it's non-state actors. So it's not captured. Yeah, so it's not captured So government loses their revenue and here we are, you know, Nigeria is running a deficit of as much as 33 trillion Naira, I mean, it's it's ridiculous Meanwhile, we have so many people operating in the economy who are not captured in tax net So if we're able to bring the MSM is into the tax net with the, you know, instrumentality of getting them on integrated into the payment gateways Then everybody benefits including they themselves, you know So so I think for me that's a key benefit. Of course, there is also the issue of velocity of transactions if you're able to bring people on board into the into the The various payment services available Then you can do more transactions Just like you said, you know From the comfort of your room from the comfort of your home from the comfort of your office You can do your transactions. Thank god that, you know, with covid Logistics services also exploded. So, you know bikes delivery bikes and all of that is it It's a normal thing in Nigeria today Well, at least in Lagos and then I think other parts of the country are catching up as well So which means that if MSM is Are able to take full advantage of the payment services that are available And then integrate themselves into the logistics service that are available Then people can do far more transactions because they don't have to suffer the inconvenience of traffic and what have you to get The things done, you know, so and then, you know, the economy grows thereby One question I've always I haven't cracked this question and I'm hoping you can crack it for me over the years Mobile money What is the problem? Go to other African countries. It's working perfectly Nigeria they've halved they've puffed The mobile networks they've tried they've done advertisements and people are not buying it. What is the problem? Why is mobile money not catching up among MSM is because that is where if you look at that sector in other African countries It's it's catching up. Yeah I think it's just a later option in you and I think we will catch up um, so so just like you say if we if you bear in mind that um One internet penetration is increasing significantly um Not the subscriber base of the country has exploded in the last 10 years. I think we're we're talking about one 160 something million subscribers on the on the various mobile telecoms networks right now Active ones, you know, so that is a veritable base as far as the mobile money service is concerned, but We started the game a bit late In places like Kenya, that's the normal way of payment for most people now bearing in mind that um, even in the hinterland You're even the farm the farmer the lady that goes to the farm The fisher man or the fisher woman, whatever they are. They have mobile phones They may not be smartphones, but they have mobile phones. Um, so Um, the mobile money service, you are right It needs to do better, but I think they're on the right path. So it's like MPS Yes, so in Nigeria, I mean, I don't want to do I know your policy because they've spent so much money, you know, one of them did Harvard's, you know, some of them are doing they're really doing well if you look at the numbers It's fairly the growth statistics. Really? Yeah, for example The first quarter of This year compared with the first quarter of last year was a 172 72% growth in number of mobile money transactions That's that's huge because that's you are almost Doubling in fact, you are more than doubling the volume of transactions and the value of transactions happening via mobile money Service providers. There seems to be a high adoption of this POS method of of You know sending money and receiving money and it's it's almost like a little bank I mean that that's phenomenal. Isn't it? What is what is behind that? And is that the the way we should go or should we encourage, you know a change in strategy? Why why is that catching? No, I think we have to move For that down the value chain the payment service value chain, you know from that because for me I have a problem with that because it's still cash Um based based it's cash dependent heavily and there's a huge problem with that, you know So we need to move people from doing POS based cash transactions to moving money from accounts Even if they're mobile money accounts and I think that's why this mobile money service providers are crucial to the entire electronic payments ecosystem Right now There's this fraud that happens, you know People you lose your phone And this smart boys Very quickly, you know, I mean, I don't know how they do it in seconds They've hacked your password and everything and they moved your money When they move your money, how do they get it? The POS cash transaction providers So so they withdraw they they transfer the money to a POS person Even when they hack people's accounts, let's forget the phone You know where if you are careless with your pain or you're careless with your password into your internet banking or your banking app Services These guys go into your account declare your account and when you check how the withdrawals were done you find people's names But if you pick those people up you discover that they're POS service providers Who who will say they didn't they don't know the guy that we do Yeah, so you have nobody to catch you So it has to we have to move beyond the cash Finally, because I'm two way out of time. I mean even our friends in black also use that as a way to To they can't be traced. I had a story this morning about, you know, policemen going around with POS Oh, yeah, you know, I mean they just get it from the operator and say we'll pay you something. Just let's hold it I mean this is gone. So the the the entire payment I think the important thing to just bear in mind is that msm is There's so many of them out there, you know, whether it's clothes you're selling whether it's cakes you're selling You know, whatever it is that this services payment is available across all platforms your instagram account You can make payments directly from there your web your whatsapp business account You can make payments directly from there directly from there So so you can make purchases on instagram on whatsapp I think on facebook as well twitter hasn't caught up with that yet, you know, so I would want to encourage msm is take full advantage of these things because you have your social media following How are you converting that to cash? You know, the payment services are there for you to to use again We can't mention the brand names of these payment service providers But just do a small google search and you and you get the information Integrate that into your account and then you can get your money finally If you just sit in the sentence of the government policy, what can the authorities do to to make sure that msm is Quickly quickly and faster integrated into the payment gateways. I think that the Policy environment we have to give credit to the cbn I think the policy environment as it stands now is Robust enough what they probably can't do better now is Enlightenment they need to you so for example what I'm saying now a lot of people may not be aware that they can make payments from Their whatsapp business page, you know, so or they can receive payments from their whatsapp business page so The cbn and other policy, you know drivers can do a better job of enlightening the large msm population You know using maybe the associations and all of that Nassmi And all of them smize, you know To get you aware of this thing so that they can take more advantage of it Interesting Shagun shop it on amongst other things. It's a chairman of art network. There's something you mentioned before we We said I said principal partner Woodridge and scott consultant Woodridge and scott consultant. We'll keep that in mind Thank you so much for your time And I think we've learned quite a number of things from you About making payments quicker on social media. That's really amazing. Absolutely All right, and that's the sides of our package right here on the breakfast in plus tv africa It's a good way to end If you're a micro small and medium enterprise to take advantage of the payment gateways to make a business faster make faster sales My name is kofi bartels to remember you can follow us on social media on facebook twitter and instagram at plus tv africa on youtube At plus tv africa and past tv africa lifestyle. We'll return tomorrow. Good morning