A lot of people keep asking me about what I think the future of banking and financial services is going to be in Africa and especially Nigeria as the largest market. overregulation has tried to alter the player dynamics in Nigeria but somehow "the real demographic" still emerged.
The work that OPay did in Nigeria is very significant as it revealed a truth that can't be hidden. Offline is where the action is. You go to the market, not wait for them to come to you. I have always preached this to digital startups that the app store is NOT distribution.
Conversion happens more offline than online. Even when online, the really important young demographic in Nigeria is the Nairaland demographic. Not the Facebook or Twitter demographic.
Telcos will still dominate no matter how much we delay them. They own the table that everyone is playing on. All they need to do is shift the table and a new hierarchy emerges. Telcos will, however, be restricted to the transactions space. Services are another matter.
Specialized and differentiated services will start from niches and become widespread as lifestyles change with less transaction friction. Friction is currently the dominant obstacle to innovation. Once removed and people stop think about creating platforms, new models will thrive
These are steps that will happen and it is those services that will threaten banking as we know it. It is NOT payments. The current GTbank move to split their payments business away from core banking is actually a smart move and will be smarter if they form a telco JV with it.

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More from @asemota

21 Sep
I started writing a blog post to resist the urge of doing a thread on this topic but...

...there have been conversations in twitter this morning that makes me want to to weigh in with a thread as the basis of my post titled ”There are no Africa Experts.” It is a fraudulent term.
There are also no Nigeria experts. There are people who know narrow areas of Nigeria and Africa a bit better than others but there is no real expertise if data is still a mirage. There are many knowledge gaps and jigsaw pieces strewn around. Some fit to give part of the picture.
@Jessetheranter said this below today and he is right. Media alone has shown how fragmented Africa is. If you can't find a critical mass with enough interest in specific African content to become a sustainable market, it says two things:

1. We don't have enough data

2. See 1.
Read 18 tweets
20 Sep
One thing that I have learned is to acknowledge those who have an advantage while finding my own advantage. All advantages are not equal and that is why chasing after people or competing is self defeating. Your weakness is NOT always my advantage, it can be a trap. Strength rules
The easiest place to find your advantage is to look inwards to find obstacles that you overcame when you had nothing to lose. Most people only discover places where they can excel when they remove all inhibitions. Most disadvantages are caused by ourselves. We let defeat happen.
My best man gave me this secret when doing real estate negotiations. He always gets the best deals when he is not afraid to lose the deal. Fear is why we lose. Fear of failure is why many become mediocre and never excel.
Read 5 tweets
20 Sep
The day my friend Titi Alakija told me that her great grandfather went to Kings College, London as her grandfather and father, I started to respect Yoruba people. They played this colonialism game better than us. We chose the wrong side with the Portuguese.
Those advantages of early British education were translated to the civil service and other parts of industry. I see a similar thing in Ghana with Fanti people. My wife’s great grandmother went to Cambridge and was the first headmistress in Ghana. We can't deny the headstart helps
This is only true where the colonialists tried to completely destroy local institutions and replace them. We find that those who first accepted them and decided to learn their ways became dominant at first. This is also why others who didn't the same distrust them.
Read 7 tweets
19 Sep
@EmekaOkoye has been making a steady point over the years that what we call tech in Africa is largely imported stuff and true tech from us should be about going back to first principles to create technology that works for us. The push back has been about reinventing the wheel.
The wheel works as a technological invention but there is no need for us to keep importing wheels when we can recreate or manufacture them locally. That is the entire point of the local content drive that we largely pay lip service to in Nigeria. NOTAP has been a rubber stamp.
If you look at the largest entities in Nigeria today, the technology powering them is still largely from outside Nigeria will middlemen taking a share of annual maintenance or licensing costs. I used to be one of those middlemen and made money from the support but also learned.
Read 12 tweets
16 Sep
One thing I quickly figured out in Lagos is that people don't like to think. They like others to think for them and they make money of the thoughts without paying for it. There is a perverse delight many people gain from stealing the ideas of others, then boast that it is theirs.
The only people they fear are those who can harm them physically or ruin their reputation. I sat down with a guy to discuss an idea about POS infrastructure with a bank for days and he went to SA (with his elder brother who was a state governor) to buy our competition.
When we started the telco business, I know someone who used to pay people to listen to the conversations of engineers with the competition at Pat's Bar. This guy was not even a Nigerian and he said he did the same at Michelangelo's at Sandton. Nigerians are loud and flippant.
Read 8 tweets
15 Sep
When we started the whole POS agent thing in 2014, one bank was making >90% of the transaction fees by charging 150 Naira on top of each transaction. We begged them to remove it as it would kill the business, they didn't. That was what attracted all the other sharks to us.
GTbank was the biggest of the sharks. I see Opay moving to own as much of the transaction fees as possible by getting all licenses, from PTSP to banking licenses. So, it makes sense for GTBank to do the same in reverse.
The merchant is still the key part of all this. POS with each merchant or USSD adoption by merchants will obliterate the agent business.

I wrote this below over 8 years ago -bigchief.co/the-merchant-a…
Read 4 tweets

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