The digital age has transformed banking, revolutionizing the way individuals and businesses manage their finances, with mobile banking apps playing a central role in this evolution.
In a country where smartphones are becoming essential for daily tasks, mobile banking apps have emerged as powerful tools for enhancing financial inclusion and convenience. With just a few taps, users can check balances, transfer funds, pay bills, and even invest, making banking more accessible and seamless than ever before.
However, like any technological innovation, mobile banking apps are not without their challenges. While they promise efficiency and simplicity, users often grapple with issues such as security vulnerabilities, limited internet access, and technical glitches.
The delicate balance between convenience and potential risks has become a hot topic in the financial sector, sparking debates about the true cost of this digital revolution.
Many decades ago, bank accounts were exclusive privilege of the rich, the educated and urban settlers. Over time the number kept increasing as banks opened more branches across the country. However, millions of Nigerians were yet unreached majorly because of their locations.
As technology keeps evolving, various platforms through which basic banking operations can be performed remotely starting emerging. One of such innovations is mobile banking app, which introduction was characterized by mixed reactions ab-initio.
Madewa Akinpelu, a resident of Lagos, is one of the millions of Nigerians who dreaded using mobile app for banking transactions largely due to ignorance, and safety concerns among other uncertainties surrounding its deployment at the time.
“Then, I didn’t even have ATM card. I preferred to withdraw my money across the counter or send one of the guys working with me. Whenever it was urgent, a friend using mobile app then helped me with instant payment and transfers.
However, an experience in 2016 was all Akinpelu needed to change his worldview about the mobile app. “Each time I sent N20,000 to him, within a week or two, he would call to demand another money. So, I decided to be sending him N5,000. At a particular time, I sent him money on Tuesday and on Saturday, he called to ask for more. I felt bad because it was on weekend, and I couldn’t do anything until the next Monday”.
“The following Monday, I went to the bank to seek information about the app and its safety. The Head of Operations explained everything to me. So, I decided to get the app.
“Since then, once salary is paid, I moved a part into the account using the app. Once my son asked for money, I transferred it to him, and he acknowledged receipt immediately. It was a turn-around for me”.
However, even as an apostle of mobile app, it has not been all rosy for Akinpelu with the app. “Most often, the bank network is bad, and I get frustrated using the app. Sometime in 2024, I wanted to pay for some goods and I was typing a wrong pin. After some attempts, my account was locked. I needed to make that payment to keep my integrity because the seller only permitted me to go on personal recognition.
“From that Friday to Saturday morning, no success. So, on Monday morning, I went to the bank to complain. I was there for three hours before I got access to the customer service unit, where I was advised to leave the app for a while as it would come up again.
“I waited till evening and tried again. It wasn’t successful. On Tuesday, I went back there ready for a fight. They wanted to stop me again, but I created a scene there and the branch manager rushed out and asked – ‘What happened? I told him the matter. He asked again – ‘weren’t you told to leave it for 24 hours before trying again’? I told him that nobody told me that. He then explained to me that every time I try to type in the pin, I extend the restoration time of my account by 24 hours”.
Rachel Nwoye (not her real name) has also had a fair share of the benefits and downsides of the app. “No doubt, it makes life easy for me. I can’t remember the last time I went to the banking all for transactions,” she happily recalled.
Be that as it may, 15th of January 2025 was memorable for her. She had approached an ATM stand in Awka, Anambra State, to withdraw some money to tackle some family and personal needs. “I slotted in my card but the machine did not pay me. I tried again and again but to no avail. So, I felt frustrated”.
Nwoye’s frustration was visible to a bystander, who offered to assist. “He asked for my card and I gave him. He did like he was cleaning it and after some time, he slotted in the card and requested that I type my secret code. I did and I still could not collect money. So, I left”.
While still regretting her inability to access funds, something more sinister happened to her. “Less than five minutes after, I started receiving debit alerts. Immediately, I lost my cool watching my hard-earned going bit by bit”.
To salvage the situation, Nwoye attempted to log into her mobile app to block the account, but the app did not respond. “That day, I regretted having the app on my phone. When it failed, I also tried to use USSD code to block the account, that also did not work. I became totally helpless”.
In her helplessness, she ran into the nearest branch of her bank to affect an account blockage, but it was too late. “I lost all the money I have in that account. If the app had worked, I would have prevented the loss of my earnings”.
While the benefits of the mobile apps are not debatable, technical glitches among other unfavourable experiences associated with them have robbed citizens of maximum benefit. A software engineer, Stanley Offor, offered detailed explanations.
“These problems stem from network downtimes. Poor network connections between banks or payment processors delay or disrupt transaction settlements. It can also result from system integration issues as some apps struggle to synchronize with interbank systems, leading to errors.
“Transaction failures can also be attributed to lack of real-time updates. Apps that do not provide instant transaction statuses often leave users in the dark about failed or successful payments. To address this, developers must implement robust error-handling mechanisms, ensure real-time notifications, and integrate automated reversal processes for failed transactions.
Mobile App Trajectory
Mobile payment history in Nigeria reflects the rapid adoption of technology and the evolution of financial services, while its mobile payment landscape has been shaped by both local and international forces, in the bid to provide convenient, secure, and accessible financial services.
Prior to 2000s, Nigeria’s financial system was predominantly cash-based with limited access to formal banking, especially in rural areas. Most transactions were done physically or via traditional banking channels like cash or cheques.
Mobile phone penetration in the country spurred the launch of mobile networks like MTN Nigeria, Airtel, and others and later triggered the adoption of mobile technology in various sectors, including payments. Between 2003 and 2005, banks started leveraging mobile phones to provide basic financial services such as balance checks and transfers between accounts to the unbanked and underbanked citizens.
The introduction of more advanced mobile services, such as internet data to the country’s telecommunications sector in 2007 paved the way for the growth of mobile financial services. From 2010–2012, mobile money services became more prominent with the launch of Verve card, an electronic card aimed at improving cashless transactions by Interswitch, Paga and Quick Teller, which started offering mobile payment solutions to the masses. Celtel Money (now Airtel) and MTN Mobile Money started experimenting with mobile money services allowing users to transfer funds, make payments, and perform basic banking activities with their mobile phones.
This informed the official launch of the Mobile Payment Service Guidelines by CBN in 2013, formalizing mobile payments in the country.
Technology of the Apps
The software engineer explained that technology plays a foundational role in creating mobile apps tailored to the Nigerian market’s specific needs and challenges. He “Developers utilize modern frameworks like Flutter, React Native, and Kotlin to build applications that are lightweight, efficient, and compatible with a wide range of devices, from entry-level smartphones to high-end models. These frameworks ensure faster development cycles and seamless cross-platform functionality,” he said.
“Cloud computing platforms such as AWS, Azure, and Google Cloud play a pivotal role in ensuring secure data storage, scalability, and real-time data synchronization. APIs like BVN validation, NIBSS (Nigeria Inter-Bank Settlement System), and payment gateways are critical for integrating secure and efficient financial transactions into apps”.
According to him, advancements in Artificial Intelligence (AI) and Machine Learning (ML) are being used to personalize user experiences, detect fraud, and optimize app performance based on user behavior. “In regions with limited internet access, offline-first app designs and the integration of USSD codes are helping bridge the digital divide”.
FinTech’s as Game Changers
Since the introduction of mobile banking apps in the country, more startups and fintech platforms have emerged focusing on providing seamless online payments for businesses and consumers and helping to push mobile payments beyond basic person-to-person transfers. CBN’s push for cashless economy in 2016 also boosted the adoption of mobile payments and generally promoted the use of digital payments for everyday transactions.
In 2020, the country’s fintech ecosystem experienced rapid growth with companies like Paystack, Flutterwave, Opay, and Kuda offering mobile banking services without physical branches. The continuous growth of smartphones, mobile networks, and internet access are fast making mobile payments a norm among growing number of Nigerians.
For Joseph Victor, a financial analyst, the emergence of fintech’s has brought about financial inclusion as the likes of Opay, Palm Pay, MoneyPoint, Carbon, FairMoney among others have brought hundreds of thousands of customers into the circle through their mobile apps.
“Their user design is top-notch. The apps are user friendly young and old users can easily navigate them. Without physical offices, they’ve gotten infrastructures to serve people through the mobile app. Unfortunately, we still have some few commercial banks whose apps are difficult to use,” he noted.
“With the fintech’s, transactions drop in seconds. Where there are technical glitches and recipient did not receive the value while the sender has been debited, the money remains within the system. Although frustrating, with follow-up, most of the banks including commercial banks now do reversal. Reversal is instant in most cases”.
“Commercial banks are being compelled to better the user interface of their apps and make them easily accessible and easy to operate,” he noted.
He however affirmed that it is not yet uhuru. “100% perfection might not be achieved because Nigeria is still a developing country, and it takes a lot of skills, technology to combat these situations. With thousands of transactions happening within seconds, the system might get overloaded, and you have delays. But that does not happen all the time”.
The tech expert, Offor, explained why the fintech’s have gained so much popularity in app deployment. “FinTech’s focus on user-centric features, speed, and simplicity with their apps providing seamless onboarding, intuitive interfaces, and innovative solutions tailored to the Nigerian market, such as micro-loans and utility payments.
“Commercial bank apps are secure and regulatory-compliant, but they often lack the agility of fintech apps with many of them having outdated interfaces, limited features, and slower customer support. Commercial banks are relatively lower in adopting technological innovations,” Offor noted.
Transaction Volumes Growing Steadily
In the 4th quarter of 2021, around 204.7 million electronic payments were made in Nigeria via mobile apps. The data show that online transfers accounted for the largest number of transactions, compared to other e-payment channels. Nigeria Interbank Settlement System (NIBSS), data shows increase from 26.6 million in 2021 August 2021 to 66.7 million in August 2022. Its value also rose from 719.4 billion to 1.8 trillion in 2022.
Additionally, the 2021 Global Findex report by the World Bank revealed that higher adoption of mobile money is driving the growth of account ownership in financial institutions particularly in Sub-Saharan Africa (SSA) countries like Nigeria. It showed that the country’s banked population increased by 15.6% from 29.7% in 2011 to 45.3% in 2021.
“Mobile money has become an important enabler of financial inclusion in SSA especially for women as a driver of account ownership and of account usage through mobile payments, saving, and borrowing,” the report added.
Nigeria’s mobile banking usage surged by 230.72% year-on-year in January 2023, despite multiple reported failures. In January 2023, mobile gateways were used 108.14 million times, from the 32.69 million times they were used in the corresponding period in 2022. Within the period, the value of mobile transactions also surged to N2.37 trillion from N1.05 trillion in January 2022.
The introduction of the new cash withdrawal limit policy has encouraged the use of banking apps and mobile gateways as more bank customers embrace mobile banking for their transactions. “The maximum weekly limit for cash withdrawals across all channels by individuals and corporate organizations shall be N500,000 and N5m respectively,” the policy states.
Concerns around Mobile Payments
While mobile phones are widespread, internet access remains a barrier for some Nigerians, especially rural dwellers and undermines acceptance of mobile apps among them. Besides, mobile payment system has been characterized by growing fraud and security concerns. “Nevertheless, the government continues to fine-tune regulations to ensure a balance between innovation and consumer protection,” the financial expert noted.
As mobile payments growingly become integral to Nigeria’s economy, offering easier, faster, and more inclusive financial services to citizens, respondents conceded that with further investment in infrastructure and regulatory improvements, the future of mobile payments in Nigeria looks even brighter.
Be that as it may, Offor sought close attention to certain issues still hampering mobile payment adoption among Nigerians. “Limited broadband penetration in rural areas means that many users rely on slower, expensive mobile networks, which impacts app performance and discourages usage.
Many Nigerians consider data expensive, leading to hesitation in downloading or using data-heavy apps. Besides, a significant percentage of smartphone users in Nigeria have low-end devices with limited processing power and storage. Apps that are not optimized for such devices often crash or perform poorly.
“Fraudulent activities, including phishing and unauthorized transactions, undermine trust in mobile apps, especially financial ones. Most apps are designed in English and overlook the diverse languages and dialects spoken in Nigeria, such as Hausa, Yoruba, and Igbo, limiting their reach especially in areas where these local languages are predominantly spoken,” Offor said.
Regulatory efforts
Over the years, the Central Bank of Nigeria (CBN) has taken numerous steps to create a conducive environment for mobile financial services, while also regulating the space to ensure consumer protection, financial inclusion, and the overall stability of the payment system. In the early 2000s, the CBN issued its first formal guidelines which primarily centered around mobile banking, while in 2011 it issued the “Regulatory Framework for Mobile Payments Services. This framework provided the guidelines for mobile operators, financial institutions, and third-party payment providers to work together, ensuring that mobile payments could be offered in a safe and organized manner.
The Apex Bank in 2013 released the Mobile Payments Service Guidelines, which set out specific standards for mobile money services, mobile wallets, and mobile banking. This critical step formalized the mobile payments ecosystem and ensuring that mobile money operators (MMOs) and service providers complied with the regulations.
One of the CBN’s most significant efforts was the introduction of the Cashless Nigeria policy in 2012 to reduce the reliance on physical cash for transactions and promote the adoption of electronic payments, including mobile payments. The policy also placed limits on cash withdrawals for both individuals and businesses, thereby encouraging mobile and digital payments, particularly in underserved rural areas.
In 2011, the CBN approved the mobile money policy, which allowed non-bank institutions to operate as MMOs, making financial services available to Nigeria’s large unbanked population through mobile phones. It later in 2018 launched an initiative expanding mobile money services by allowing telecommunication companies and fintech firms to partner with banks to offer mobile money services.
In July 2021, the bank launched the regulatory framework for mobile money services to among other objectives provide an enabling environment for the adoption of mobile money services and reducing cash dominance in the Nigerian economy.
Way Forward
To minimize technical issues and improve user experiences, Offor recommended some strategies. “Connectivity concern can be addressed by designing apps with offline capabilities, such as caching data for offline use, and support for USSD transactions.
There is need to also prevent fraud by using advanced security measures like multi-factor authentication (MFA), tokenization, and biometric verification to reduce fraud.
“There should be localized testing of apps across various Nigerian regions to account for different internet speeds, device types, and user behaviors. Regular updates are equally solicited through constant monitoring of app performance and release of updates to fix bugs, enhance security, and introduce new features.
“Very importantly, I strongly recommend collaboration with telecom providers to ensure apps run efficiently on their networks, especially during peak usage periods,” Offor advised.
In anticipation of further inclusion, the software engineer spoke of the possibility of creating apps that are accessible to both banked and unbanked citizens. “Such an app could integrate mobile money services, partner with telcos to include mobile wallets like MTN MoMo and Airtel Money.
“It also leverages USSD codes by ensuring that the app works for users with feature phones by integrating USSD functionality for essential transactions as well as builds partnerships with agent banking networks to facilitate cash deposits and withdrawals for unbanked users. It can also ensure inclusive user interface by creating multilingual interfaces to cater for users who are not proficient in English”.
“Onboarding must equally be simplified by using features like facial recognition or NIN integration for seamless registration without traditional banking requirements. By combining fintech innovation, telco infrastructure, and user-friendly design, such an app could bridge the financial gap for millions of Nigerians,” Offor submitted.
