Interswitch: repairing the infrastructure for inclusion
Accelerating financial inclusion and integrating unbanked and underbanked populations into the formal financial sector are increasingly on the agenda of many governments and policymakers in emerging markets.
In Nigeria, where an estimated 38 million people, or 36% of adults, remain financially excluded, the government has set a financial inclusion target of 95% by 2024 – an ambitious target that will require institutions to redefine initiatives and policies to accelerate the delivery of financial inclusion services.
Interswitch, the Lagos-based FinTech unicorn, seems to have answered that call, leveraging its position as the market leader in digital payment services to bridge that gap and help bring as many people into the financial and economic fold as possible.
Through its online payment platform Quickteller Paypoint, a service of Interswitch Financial Inclusion Services (IFIS), the Africa-focused company has created a strong network of banking agents – often referred to as “human ATMs” – in all 36 states of Nigeria. , offering bill payment, airtime recharge, funds transfer and remittance services to customers.
Titilola Shogaolu, head of financial inclusion at Interswitch, said the branch banking model – which is now hugely popular across the West African country – has played a key role in driving the financial inclusion program, transforming the lives of these agents due to the increase in foot traffic to their retail store and the positive impact it has on their revenue and bottom line.
“They have become socially relevant within their community because they are now the go-to person for all financial service needs of people in their local communities,” Shogaolu told PYMNTS in an interview. “And beyond financial services transactions, they also tend to offer other non-financial services transactions on their site, so invariably they become a one-stop-shop [for all their customers’ needs].”
Partnerships are key
As infrastructure can be a challenge for companies like Interswitch that depend on connectivity to operate effectively, Shogaolu said working with industry stakeholders to build telecommunications infrastructure or partnering with other organizations to set up offline payment solutions, for example, is essential to foster financial inclusion. .
When it comes to finding and onboarding new agents, ensuring Know Your Customer (KYC) procedures can be difficult to manage alone, but a partner can help make this process more seamless.
“We are able to bridge this gap and have discussions [with partners] to see where agent locations could also serve as points or where people could check in, [and in some cases] national ID can be used as a means of identification to onboard an agent,” she added.
Blockchain: not yet
In an interview with PYMNTS last December, Interswitch CEO Mitchell Elegbe spoke about the potential of blockchain technology to disrupt industries and solve many of Africa’s challenges, including in payments and other adjacent industries.
Read the Interswitch CEO interview: Blockchain Technology Could Solve Many Challenges in the African Payments Space
This is why the Lagos-based company has partnered with Interstellar, an Africa-focused blockchain organization, to develop blockchain-based infrastructure services and solutions in the region.
See also: Microsoft and Interswitch Introduce Blockchain Trade Finance in Nigeria
Previously, the pan-African digital payments and commerce company worked with Microsoft to develop a blockchain-powered supply chain finance solution for small and medium-sized enterprises (SMEs) in the country.
Asked if blockchain technology would play a role in accelerating and deepening financial inclusion in Nigeria, Shogaolu said it is something they are looking at but it will take time to materialize.
She explained that while billers and the companies they work with could use blockchain-based solutions, getting their products and services into the hands of consumers will still have to go through the agent network, which is currently not suitable. to these new technologies.
“So, will blockchain be relevant? Definitely, and that’s something we’re looking at in the future,” Shogaolu said.
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