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Recharge cards business fizzling as fintechs, banks take control



Rechargecard seller

From her usual spot at Abu-Alfred Street in the Ogba area of Lagos, Mrs. Judith was conveniently making at least N3,000 profit in a day while sitting under her MTN-branded umbrella.

But that has now become a story of the past.

Now, she hardly sells recharge cards worth N1,000 a day. People are no longer buying recharge cards as before, but they haven’t stopped making calls and subscribing for data.

For her, what started as declining sales at the beginning of last year reached its crescendo early this year when it became very difficult to sell.

She thought it was a problem peculiar to her area until recently when she met another recharge card seller from the Ojota area, who complained about the same issue. The only option left now, according to her, is to shift to PoS business.

The story was not different for Miss Folashade, an HND holder who has been running a recharge card business for about 10 years at her Agege Pen Cinema area of Lagos. But she was smart enough to start the PoS business alongside the card business two years ago when she realized sales were not as good as they used to be.

The impact of airtime top-up services offered by banks and fintech companies on recharge card sellers has been felt for several years.

However, the situation escalated early this year when Nigeria experienced a cash shortage due to the Central Bank’s policy on Naira redesign.

It was then that many Nigerians realized they could conveniently purchase airtime through mobile apps, and since then, they haven’t looked back.

The ease and convenience of buying airtime online, coupled with the risk of losing paper recharge cards if left unused, have made digital purchases more attractive. Samuel Abifarin, a student at Lagos State University, shared his perspective:

Recharge card sellers are not the only ones affected by banks’ intrusion into the airtime vending industry. Value Added Services (VAS) providers licensed by the Nigerian Communications Commission (NCC) are also expressing their concerns that banks are encroaching on their territory.

Chijioke Ezeh, the President of the Wireless Service Providers Association of Nigeria (WASPAN), the umbrella body of telecom VAS providers, voiced his apprehension that soon only banks and fintechs may be left in the recharge card business.

Ezeh argued that banks should not be allowed to sell airtime through their ATMs or USSD codes, as they do not contribute to the networks they profit from. He said:

According to an official of one of the telecom companies, who would not want to be quoted because he was not authorized to speak with the media, the era of physical recharge card vending may be coming to an end gradually, but it could also be a win-win for all.

While small businesses have lost their grip on the telecom business, a battle is unfolding between fintech companies and banks for the lion’s share of telecom subscribers in airtime top-up services.

Banks’ virtual top-ups through their mobile apps are free, unlike other services, which was initially a motivation for bank customers to continue buying from their apps.

However, fintechs are now enticing customers with attractive offers, such as cashback programs and discounts, making them the preferred choice for subscribers.

Some fintech apps offer a 3% discount, selling N1,000 airtime at N970, while others provide percentage cashback on every airtime purchase.