Since the adoption of telecommunication in Nigeria in the 2000s, the industry has not only significantly grown its market base but also improved. Right now, Nigeria is one of the countries in Africa where new technologies are being deployed as they are approved for commercial use. The country experienced it with the adoption of the 5G network, for example, even though it came at a time when the nation was on a lockdown and many conspiracy theories saturated the internet about it.
In the same vein, the future of Nigeria’s telecommunications is poised for a significant transformation. At the forefront of this change are prepaid cards and digital wallets. As the Nigerian people continue to embrace digital technology, these two elements are set to redefine the way Nigerians communicate, transact, and interact with the world. According to the United States Federal Trade Commission, a prepaid card is one that people can buy with money loaded on it and use to pay for things.
Prepaid cards have been beneficial for managing savings.
Also called a prepaid debit card or a store-value card, it is a convenient way to pay for things when one is not carrying cash. This technology does not need a bank account and the cards can be bought at stores and online. Prepaid cards have been a staple in Nigeria’s telecommunications sector for years, providing a convenient and accessible means for millions of Nigerians to access mobile services. These cards allow users to pay for their calls, texts, and data in advance. This system has been particularly beneficial for those who prefer to manage their spending and avoid unexpected bills.
However, the advent of digital wallets is set to revolutionize this landscape. Digital wallets, also known as e-wallets, are virtual platforms that store users’ payment information securely. They enable users to make transactions quickly and conveniently without the need for physical cards or cash. An example is cryptocurrency, such as Bitcoin. In the telecom sector context, digital wallets could potentially replace prepaid cards, offering a more seamless and efficient way for Nigerians to pay for their mobile services.
Several factors drive the shift to digital wallets in Nigeria.
This shift towards e-wallet is caused by several reasons. First, there is a growing trend towards cashless transactions in Nigeria. This is a result of the Federal Government’s efforts to promote digital payments and reduce the reliance on cash. The result is a conducive environment for the adoption of digital wallets. Another reason is the increase in the use of smartphones and the availability of internet connectivity. Both have made it easier for Nigerians to access online wallets.
According to the Nigerian Communications Commission, Nigeria’s internet users as of December 2022 rose to 154.28 million. This figure represents a significant potential market for e-wallet providers. Yet another reason is the COVID-19 pandemic, which lasted for three-quarter of 2020 and extended till 2021. When Nigeria was on a lockdown, the people had no choice but to adapt to the situation. So, people sought safer and contactless ways of transacting. The appeal of e-wallets skyrocketed because it was a necessity.
Ways of solving the challenges that come with its adoption.
Despite these promising trends, the transition from prepaid cards to e-wallets also comes with challenges. The first is the need to build robust and secure online infrastructure to support the widespread use of e-wallets. This includes reliable internet connectivity and advanced cybersecurity measures to protect users’ data. There is also a need to address the digital divide in the country. Although the government is working on campaigns to ensure that internet connectivity penetrates more parts of the country, access to digital technology is still limited in some rural areas. This demographic needs to be brought on board to expand the net of e-wallet adoption. Finally, trust must be built with older Nigerians who may be less familiar with the technology.