Oluwanifemi and Emmanuel here
Today we are discussing:
- Nigeria to replace BVN with NIN
- MTN Group sells stake in BICS
- Beyond ads: Twitter’s subscription prospects
Nigeria to replace BVN with NIN
The Update: The Nigerian government has stated that it wants to replace the Bank Verification Number (BVN) with the National Identification Number (NIN). In the words of Dr Isa Ali Pantami, Nigeria’s Minister of Communications and the Digital Economy, it is a crime to open a Bank Account in Nigeria without a NIN.
According to the Minister, the BVN is a banking policy while the NIN is backed by law, so he’s urging the CBN to prioritise the NIN over the BVN.
Gazing at recent history? In 2014, the Central Bank of Nigeria (CBN) introduced the BVN, a biometric technology with a secure unique identifier. It made the BVN a prerequisite to operate a bank account in Nigeria. Following this directive, millions of Nigerians had to queue at their respective banks to get captured to prevent being disconnected from their bank accounts.
On August 28, 2014, former president, Goodluck Jonathan, launched the pilot phase of the e-ID scheme where the National Identity Management Commission (NIMC) would issue ID cards — powered by Mastercard and Cryptovision — that would serve the dual purpose of identification and payments.
Note that the NIN project started as far back as 2007, and it was supposed to address most of the concerns that the BVN came to solve. At that time, the BVN seemed like a duplication of effort.
In December 2020, the Ministry of Communications and the Digital economy ordered people to link their NINs to their SIMs, or get blocked from mobile communications. Wait, we’ve seen this before, right?
The same questions: In 2014, the question on the lips of some experts was, why double down on the BVN when the same energy could be poured into helping people get the NIN? Seven years later, we are asking, why not harmonise the BVN data and give people NINs? What happened to all the data from other government agencies?
The job of committees: The Nigerian government has set up various committees to harmonise data, with the latest being a steering committee set up in 2019. The result of this harmonisation will see Nigerians needing a NIN to operate a bank account.
In 2019, NIMC announced that it harmonised 11 million BVNs with the NIN.
Negatives: Should we expect more queues at the banks? What about the risks involved with COVID-19? I sincerely hope these concerns will be addressed.
Innovation on the way? Despite the negative questions behind this move, the future gains could be worth today’s pains. KYC and identity verification have long been a tough nut to crack for companies and governments alike. Adedeji Olowe, a renowned fintech expert, believes that if the NIN exercise is successful, it could create room for more innovation in the financial sector.
Recall that during the lockdown, several Nigerians clamoured for relief funds to be paid via BVN. Still, since there are just 46.3 million BVNs as of February 2021, it means several people outside the banking sector might not receive such benefits.
In Kenya’s financial sector, (Yes I love Kenya), the central bank of Kenya will soon require licenses for digital lenders in the country, in a bid to stem the tide of predatory digital lending.
For more context, have a look at our Editor-in-Chief’s breakdown of Kenya’s lending situation.
MTN Group sells stake in BICS
South Africa’s MTN Group has sold its 20% stake in Belgacom International Carrier Services (BICS) to Belgium’s Proximus. The sale is reportedly worth R1.8 billion ($121 million).
On BICS: BICS is a global telecommunication enabler, providing digital communications, cloud services, and IoT to telecom operators (telcos), service providers, and other global enterprises. The company is a subsidiary of Proximus, the largest telecommunications company in Belgium.
MTN keeps on trimming: The sale is touted as part of MTN’s ongoing R25 billion ($1.7 billion) divestment plan to reduce debts, simplify its portfolio, and improve its next five year returns.
Recall that in 2020, the telecom giant sold its stake in eCommerce firm, Jumia, and telecom infrastructure company, IHS Towers. MTN reportedly made net proceeds of $142 million from its Jumia sale.
The company also announced that it plans to sell its Middle Eastern operations after a 15-year controversy in the same year. The company stated that it was already in advanced talks to leave the Middle East and focus on Africa.
While the reasons are unclear, MTN has faced several controversies in the region, with allegations of bribery, terrorism funding, and US sanctions violation.
Doubling down: MTN wants to streamline its focus on Africa, its biggest and arguably toughest market. Recall that the Nigerian Communications Commission(NCC) fined MTN $5.2 billion for failing to disconnect its users. The NCC later cut the fine by 25%, and the company had to list on the Nigerian Stock Exchange(NSE).
In July 2019, the company successfully listed as MTNN and has become one of Nigeria’s most valuable companies, second only to Dangote Cement.
In South Africa, the company is currently battling its regulator over the right to bid for a 5G spectrum.
Zooming out: The business of telecommunications is tough, and capital intensive. For the big dominant players, regulators always want to keep them in check to, on paper, promote competition in the space.
Beyond ads: Twitter’s subscription prospects
The highlight: When we talk about tech companies cashing out really big from ad revenue, Google and Facebook top the list. But Twitter currently does not stand a chance with them. An EMarketer report has it that Twitter contributed only 0.8% of global ad revenue in 2019.
This explains why the company is devising ways to monetise its features without totally depending on brand advertisements. So, Twitter will probably make its high-end users pay for some of its services in the form of a paid subscription.
Twitter claims that revenue from subscriptions may be more sustainable than ads. Still, the company isn’t expecting any major shift in revenue for 2021, but it believes in the potentials. However, in its Q4 2020 earnings report, it noticed a total ad engagement growth of 35%.
Before now: Twitter has actually grappled with the idea of making people pay for the service for a while. It officially announced its intention in July 2019 and has since carried out surveys to know what users might pay for.
Prospects: From a couple of hints, especially with the Revue acquisition and integrating paid newsletters on the platform, there are chances that the company could explore subscription via the following options and more:
- Charge power users for Tweetdeck, where they can customise their dashboard to navigate multiple accounts or use the platform ads-free.
- Request users to pay a premium to use Twitter ads-free.
- Paid subscription to view exclusive content
- Tipping. Users can pay the people they follow for exclusive content. However, this is already possible where a user adds a payment plugin to receive tokens from appreciative followers. Here‘s an example.
- The ability to post longer and higher-resolution videos
- Paying for verification. Well, this sounds cool, but it looks like a privilege that can be abused.
- Subscribe to have the “undo tweet” feature. This is similar to the Gmail feature that allows you to undo send for up to 30 seconds. Many users would probably jump on this as it’s the closest thing to getting an edit button.
- Access to advanced personalised analytics.
Frankly, Twitter may not know how users will react to these monetisation plans until they are introduced. I guess, the sooner the better to give room for iteration.
What else we are following
- Is overseeing cloud operations the new career path to CEO?
- Twitter’s Jack Dorsey wants to build an app store for social media algorithms
- Keep in mind: Register for the Digital Currency Summit with this link.