“Alone we can do so little; together we can do so much” This statement aptly describes the success achieved in the financial and payment landscape in Nigeria through the strategic partnership between fintechs and banks in the financial services industry.
Years ago, daring criminals would unleash mayhem on unsuspecting victims coming from banking halls and dispossess them of their valuables. This was because consumers had to move around with cash.
At the time, majority of the people living in both urban and rural areas were unbanked and did not have access to financial products and services.
But as technology evolved and digitalization of businesses became imperative to fit current realities, banks had to re-evaluate their service model and operational strategies. The need to transition into a digital wholesale banking system
Adoption of technology in service delivery such as banking, e-commerce, logistics etc. has contributed to the growth of the fintech companies. With collaboration, fintechs have increasingly developed solutions that have been deployed across industries to enhance payment collection, efficiency and fund security. These partnerships between the fintechs and industry players have helped to accelerate product innovation, drive growth and provide topnotch solutions across board.
The partnership between the fintech and the banking community has brought about innovative solutions such as funds transfer, on-demand bank statement, instant transaction alerts, payment authorization, loan request and disbursement, etc. Thanks to this innovative payment solutions, bank customers and account holders do not have to visit the banks often as they can initiate and complete transactions from the comfort of their homes.
Also, fintechs have leveraged partnerships with other service providers, such as power distribution companies (DISCOs), telecoms companies, ride-hailing services and utility companies to strengthen the payment ecosystem. These partnerships have further deepened financial inclusion and increased adoption of digital payment solutions, enhanced access to loans and other financial services such as funds transfer, bill payments, DSTV subscription, airtime recharge, and so on. These partnerships have helped the service providers collect payment seamlessly as well as allowed the customers to pay with ease.
Following these partnerships, Nigeria has witnessed an increase in the adoption of electronic payments over the last few years. Data shows the value of transactions via digital payment platforms, Nigeria Interbank Settlement System Instant Payment System (NIP) and Point of Sales (PoS) terminals rose to N60.34 trillion in the first quarter of 2021. That was a 12.55% increase when compared to the N53.61 trillion achieved in the fourth quarter of 2020.
Taking into cognizance that strategic partnerships help to strengthen payment solutions and are pivotal to economic growth, Africa’s leading digital payment and e-commerce company, Interswitch Group, has collaborated with several companies across industries to provide the broadest set of financial solutions to financial institutions across Africa.
Since its inception, Interswitch has been providing the switching infrastructure that connects different banks in Nigeria to reconcile inter-bank payments and settlements. Its solutions are also used to deliver the technology used for Automated Teller Machines (ATM) and PoS.
Following the acquisition of a minority stake by Visa in Interswitch in 2019, Interswitch is today the most valuable African Fintech business with a valuation in excess of $1 billion hence its recognition as a Unicorn. The partnership with Visa, allowed the Fintech Unicorn to expand its digital payment solutions across the continent.
Beyond partnerships with brands, Interswitch has also partnered governments across the continent to integrate its digital payment solutions to expand their inter-bank settlement capacities. These partnerships have enhanced the digital payment ecosystem, helped shape the much-needed financial transformation as well as boosted the African economy.
According to Tomi Ogunlesi, Group Head, Corporate Marketing, “Over the years, we have been making major strides in delivering world-class financial solutions to customers across the world. Through strategic partnerships, Interswitch has also reached major milestones and deepened access to financial services.”
In furtherance of its commitment to help strengthen the financial services industry, Interswitch recently revamped its developer console to improve the experiences of partners, developers and merchants who seek to integrate with their solutions.
Essentially, this platform enables developers to try out their products before going to the market. The new Interswitch APIs enable developers create innovative tools and products, and provides self-service integration, giving developers the ability to access Interswitch’s product APIs, authentication parameters, sandbox, production keys, documentation and seamless project management.
Indeed, the fusion between Fintechs, banks, and other service providers as strategic partners would not only enable them deliver satisfactory services to their numerous customers, it will help grow the payment ecosystem and also contribute immensely to the growth of the Nigerian economy.