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Spurred by online retail and reduced costs to customers and finance authorities alike, technology innovation in the financial sector is a rapidly evolving phenomenon in Nigeria. This comes at a time when the country is desperately searching for new economic drivers to offset the downturn in the price of oil, which accounts for almost four-fifths of government revenues according to the Financial Times.

The internet has been a key sector in this regard. Internet penetration is impressive; after doubling from 32.22 million to 64.42 million throughout 2013, it now stands at around 70 million, or around 40% of the 173 million population.

With such a rapid increase in internet penetration, Nigerian entrepreneurs and international conglomerates alike are scrambling to provide online services to Nigeria’s increasingly tech-savvy population.
Financial services giant MasterCard is working with the government to integrate payment cards into Nigeria’s national ID scheme. This represents a tremendous opportunity to integrate the population into the financial system. Once it is fully implemented, the project will allow 100 million Nigerians to access financial services, according to the Financial Times. For its part, PayPal announced this year that Nigeria has already grown to become its second largest market in Africa, just a year after it was launched.

In parallel to the proliferation of bankcards, local banks and start-ups are exploring avenues for mobile banking transactions. With inexpensive data phones and a young population, Nigeria represents a ripe market for online businesses.

A 2015 report by PwC entitled “The future shape of financial services in Africa“ confirms that, “The local retail banking sector is increasingly making use of new technology such as ‘Mobile Money’ platforms,“ as customers increasingly rely on their mobile phones for daily banking.

Nigeria has spawned a bevy of start-ups that facilitate online transactions. Paga is one of the many payment services in Nigeria that allow users to send money or make payments without a bank account. The email-based CashEnvoy enables businesses to receive online payments from their customers.

It is through e-commerce that the market shows most potential. is an online shopping and daily deal site in Nigeria that combines e-commerce potential with an understanding of Nigeria’s realities. In a country where fear of internet scams are rampant, facilitates the process by sending couriers to deliver goods purchased online and pick up payment. They cut through traffic on motorbikes, reducing waiting times, and boosting efficiency.

Social media, particularly market leaders Facebook and Twitter, also bring a range of advantages to Nigeria’s financial sector. It speeds up information exchange, therefore reducing the cost of advertising to businesses. It opens up new avenues for research and development, as well as customer reviews.

Challenges still exist. There is a major disparity between urban and rural areas, with poor broadband infrastructure penetration outside the cities. Confidence in internet security is still an issue, with customers having (not unfounded) concerns of fraudsters. Even innovative solutions to bypass these issues, such as’s courier service, are not without their challenges; thefts of couriers is a common concern for the company.

But with challenges come opportunities. There is tremendous potential for technology in Nigeria, Africa’s largest country and economy. In light of dropping oil prices, Nigeria’s new finance minister said that raising non-oil revenues was her top priority. This bodes well for businesses looking to alternative sectors, including online services. With the middle class spending “nearly half their monthly income on electronics,“ according to Renaissance Capital investment bank, the future is bright for technology in Nigeria.

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