“The payments experience in Nigeria is broken, with lengthy queues for bill payments and clumsy airtime recharges taking up the customer’s time and money.”
That’s the view of Oshone Ikazoboh, co-founder and chief operations officer (COO) of mobile payments startup Zoto. Available on Android or iOS, Zoto has over one million registered users, and is licensed by the Central Bank of Nigeria (CBN).
“It has made payments simpler, cheaper and faster, and more importantly accessible to anybody with a smartphone,” Ikazoboh told Disrupt Africa. “Our strategy is to take advantage of Nigeria’s mobile revolution and play a deeper role in the digital and commercial lives of our customers through payments anytime, anywhere.”
Some of Zoto’s key services include airtime and data recharge, postpaid bills, TV subscription, broadband bills, electricity, movie tickets and betting. In the near future it also plans to disrupt merchant payments, credit, P2P transfers and other financial service categories, Ikazoboh said.
The startup began operations and now has a team of 30. Ikazoboh said it has learned a lot over the last couple of years in “understanding the power of people in making or breaking a business”.
“As a result, we have worked hard on people, culture, and our purpose. Deep customer focus has been a core to us from the beginning – be it merchant partners or customers,” he said. “I think we are 10 per cent there and have a long way to go. But I am very sure we will set the platinum standard for a phenomenal customer experience in the payment segment.”
There is certainly a large hole to be filled. Only 44 per cent of Nigeria’s population is banked due to the high cost of opening accounts, as well as inadequate number of physical branches.
“This has led to a cash heavy economy, resulting in systemic inefficiencies, leakages and cost to government in the form of printing and maintenance,” Ikazoboh said.
“On the user front, it is inefficient to use cash and it is not uncommon to see people standing in a queue for many hours to make bill payments and use tedious scratch cards and USSD for recharges.”
Digital payments, on the other hand, are picking up in Nigeria.
“In the utility bill payments segment alone, we expect service uptake around 46 million households by 2020,” said Ikazoboh. “Moreover, the smartphone is increasingly becoming important in Nigeria, with 80 per cent of web traffic in Nigeria coming from mobile, and average time spends on smartphones standing at about 193 minutes. It is increasingly becoming the lever operating e-commerce and digital enablement.”
Ikazoboh believes Zoto is able to fill this gap by providing easy, fast and secure payments, anytime, anywhere.
“It leverages the ubiquity of the mobile networks, creating a number of innovative usage cases for the socio-economic upliftment of poor and helps to strengthen various initiatives to reduce the role of cash in the economy,” he said.
“We feel there is a massive potential to grow beyond P2P payments and airtime recharge and become ecosystem enablers for merchant payments, person-to-government payments, transit payments, as well as insurance and micro-credit services.”
More than 80 per cent of Zoto’s users are Lagos-based, but Ikazoboh said the product can easily be replicated elsewhere in Nigeria and in other West African countries. Zoto charges a commission on merchant payments and a convenience fee from users on bill payments and bookings.
“Users don’t feel the pinch because we get discounted rates from our telecom partners which we pass on with the marginal commission,” Ikazoboh said. “We have witnessed a year-on-year growth of 200 per cent in order volumes, processing five million orders in 2017. We are on the path of scaling up and profitability shall follow. The journey has just begun of revolutionising the way Nigerians pay.”