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Impact Of AI, Contactless Technologies On Banking – PalmPay CEO

Managing Director of PalmPay, Mr Chika Nwosu, speaks on the challenges facing the fintech industry, the importance of fostering financial inclusion, among other issues

Tier-1 accounts opened by mobile banking agents have been highlighted as one of those susceptible to fraudulent activities, how are you handling this issue?

Before the CBN directive, our focus has consistently been on encouraging users, particularly those in Tier-1 and Tier-2, to connect their wallets with their BVN or NIN. In a proactive effort to safeguard users from fake accounts, fraud, and cyber threats, we recently enhanced the KYC upgrade process for existing users. This ensures that Tier-1 users, who haven’t completed their KYC upgrade, can now do so effortlessly. As part of our measures to combat fraud, Tier-1 users on the PalmPay app are now required to regularly verify their BVN or NIN for transactions. Our actions align with the Central Bank of Nigeria’s policy directives, aiming to protect user data while ensuring a seamless experience for financial services.

Although these accounts are helping to deepen financial inclusion, there are concerns about safety and privacy on fintech platforms. What is Palmpay doing to address these concerns?

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Over the past four years, we have been able to build several safety features into the PalmPay app to ensure our over 30 million users transact in a secure and trusted environment. We’ve done this successfully, marrying security and safety with the customer’s experience to create a balance. We have integrated several security and safety features to protect our users from fraud, such as binding their phones to the app, auto-logout and biometrics features to confirm our users’ identity. Also, there is an inbuilt safety feature in our app that uses Artificial Intelligence to understand users’ transaction patterns to cater for incidents of fake accounts, fraud, and cyberattacks, to ensure account protection. We employ a closed-loop risk management system that involves continuous monitoring, analysis, and response to security threats. It allows us to detect and prevent risks in real-time, reducing the potential impact of security incidents. We also run a Wallet Safety Workshop to educate our users on how to safeguard their wallets.  In all of this, our goal has always been to reduce fraudulent activities and provide a safe banking environment for all.

In your view, what are some of the peculiar challenges financial operators in Nigeria are grappling with?

First, we must acknowledge that at PalmPay we don’t see challenges but opportunities. In 2019 when we started operations, network failure rates of up to 10 per cent were common. What normally many would have seen as a challenge, we instead saw an opportunity and were able to drive users to shift towards cashless payments, achieving a remarkable 99.5 per cent success rate within just 10 seconds of transactions on PalmPay. Fast forward to the cash crunch of 2023. While others grumbled, this too turned out to be an opportunity for us to showcase the company’s capabilities. It was an enabling situation for the businesses that we work with because we were ready and had the technology and were waiting for more users to experience the benefits of having a digital cashless payment platform like ours. Then there is the issue of fraud. For us at PalmPay, we continue to improve upon our app, with an inbuilt safety feature that uses AI to understand users’ transaction patterns to cater for incidents of fake accounts, fraud and cyberattacks. We also run a Wallet Safety Workshop to educate our users on safeguarding their wallets. Moving forward, we will continue to build a super app that supports the seamless sending and receiving of money, effortless payment of bills, and the ease of shopping anywhere. As a driver of financial inclusion, PalmPay will continue to focus on giving our users the freedom to take control of their finances.

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Nigeria is one per cent away from meeting its 2024 target on financial inclusion but there is still a wide gap when it comes to women and youths, according to the latest EFInA report. Are there plans to bridge these gaps?

Indeed, there is. To drive financial inclusion and improve the number of Nigeria’s unbanked has been our vision since we came into the market in 2019. According to the CBN, Nigeria stood at a 64 per cent financial inclusion rate in 2023. As a testament to our efforts in bridging the inclusion gap, 1 in 5 Nigerians use the PalmPay app because it is fun and has a transaction success rate of 99.9 per cent. In addition to this, we have a network of over 500,000 agents and 600,000 merchants across Nigeria who are bridging the gap in rural and urban areas.

What technological trends do you see shaping the future of the financial industry in Nigeria?

In digital payments, a prominent technological trend poised to shape the landscape in 2024 is the prevalence of contactless payments. This advancement is set to drive widespread adoption in Nigeria, and at PalmPay, we are well-prepared for this transformative shift. Our unique advantage spans both user and merchant aspects of the equation. On the merchant side, we boast a vast network of over 600,000 offline merchants across Nigeria, the majority of whom utilize POS terminals equipped with NFC payment capabilities. Concurrently, on the user side, we collaborate closely with select mobile phone brands to actively promote the integration of contactless payment features within our users’ mobile devices.

How do you see the current state of the financial industry in Nigeria?

Let me start by saying that we the players in the fintech space have made an impressive disruption to the benefit of the ecosystem. Our achievements over the years are things to be proud of. The brands we’ve built are of international standard.

To hit the target, all the players in the financial ecosystem need to collaborate for the benefit of the user and the economy. Thankfully, the government has been ensuring some form of stability with regulations. At PalmPay, we do our best to support you by powering over 1.1 million businesses, thereby creating thousands of direct and indirect employments.

As the Managing Director of Palmpay, what is your vision for the future of the company, and how does it align with the broader financial landscape in Nigeria?

We are focused on building PalmPay into a super app and continuing our technological advancement for financial inclusion across the African continent. We are not only a banking or payment app; the company has grown to become a household name, deeply ingrained in the local ways of life of our users. Looking ahead, we are poised for greater achievements. We remain committed to our mission and vision and will continue to innovate, expand our offerings, and collaborate with strategic partners to drive positive change. Driving financial inclusion is at the core of our business. We will continue to make our services accessible to as many people as possible, reaching them through our smartphone app and via our network of agents and merchants. In 2024 and beyond, we plan to grow our users past the current 30 million that we have, onboard more businesses beyond the 1.1 million which includes over 600,000 merchants and 500,000 agents that we currently have and increase our business network. We plan to ensure that every business, no matter the size or location, has access to the financial tools and customer service support that they need to succeed. This has been our drive since 2019. We got our license to operate as a mobile money operator and continue to drive our business goal into the new year and beyond.

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In an era of rapid technological advancement, how is your company fostering a culture of innovation, and what disruptive technologies do you see as potential game-changers for the industry?

Aside from contactless payment that we just talked about, which at PalmPay we are positioned to ensure its adoption, there’s also artificial intelligence. As a technology-driven company, PalmPay will keep exploring AI for in-payment and even out-of-payment. Also, we will utilize AI for big data and risk control measures.

What should we expect from Palmpay in 2024?

First, we acknowledge that 2023 was an interesting, rewarding, and humbling year for us at PalmPay. After just four years of being in operation, we have over 30 million users and successfully onboarded over 1.1 million businesses, with our business network boasting over 600,000 merchants and 500,000 agents. Today, we have 36 state offices strategically placed across the country to ensure that every business, no matter how remote, has access to the financial tools and customer service support that they need to succeed. Currently, our cashless payment ecosystem processes up to 15 million transactions daily and 6 billion USD Monthly Transaction Value, proving that our customers are choosing to stick with PalmPay, ensuring that we have one of the highest retention rates in the market. 75 per cent of our users come back to transact with us every month. More than 40 million people, representing 1 in 5 people in Nigeria, trust our network to transact, save, shop, and pay for utilities every month. This number represents the number of people who have accessed PalmPay services through either our secure and seamless smartphone apps or the merchant and agent networks. We are trusted and loved by over 30 million users, 80 per cent of whom come to us thanks to a recommendation by their friends and family, and 30 per cent of whom were financially excluded before they started using PalmPay.

We plan to keep building on these financial inclusion efforts in 2024. We are set to launch additional payment channels in 2024. We launched in Tanzania in 2023. In 2024, we will continue to grow our multi-country and cross-border presence. Our continuous drive for financial inclusion and literacy means that we will be launching new products and features on the app that would support our customers in carrying out their payment needs. PalmPay has its footprint in Ghana where we operate with an enhanced Payment service providers (EPSP) license and offer merchant acquiring solutions (All-in-one payment solutions for business) run business solutions in Ghana and the personal app which provides some bill payment solutions. Our services are being upgraded. In addition to Ghana, we have also established a footprint in the east of Africa, Tanzania, under the payment system provider license. In 2024, we look forward to establishing our footprints in more markets.

Source: Punch

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