A Year After Launch, Local Platforms Seem Ready to Embrace eNaira

Nearly a year after its launch in October 2021, Nigeria’s central bank digital currency (CBDC), the eNaira, is beginning to gain traction in the country.

Following two recent announcements in the last month, eNaira use cases have been significantly expanded, with Flutterwave and Clickatell both making moves to integrate the digital currency into their respective platforms.

Since becoming the first African nation and one of only a handful worldwide to launch a CBDC, eNaira usage has not been as widespread as the Central Bank of Nigeria (CBN) had expected. In July, CBN Governor Godwin Emefiele said that only around 700,000 people had opened an eNaira wallet despite there being around 55 million bank accounts in the country.

While Emefiele blamed “apathy” on the part of commercial banks for the slow adoption of the eNaira, until recently, the opportunities for Nigerians to transact with the new technology were lacking compared to those presented by the fiat currency.

Read more: Concerns Over Lost Fee Income Prompt Nigerian Lenders to Slow CBDC Adoption

Although an upgrade in May allowed Nigerians to pay their bills with eNaira, for everyday commerce, the fact that both the merchant and the customer needed to have the eNaira speed wallet app created a barrier to mainstream acceptance.

As in many countries, Nigeria has established payment norms and consumer preferences that are unlikely to change merely by the arrival of an alternative. For example, MTN Nigeria reported earlier this year that within two months of launching a mobile money solution, 4.2 million wallets had been opened, proving the high preference for mobile money over the eNaira.

In order to deliver its digital currency in a way that integrates with Nigeria’s booming mobile money ecosystem, the CBN has partnered with communications-platform-as-a-service (CPaaS) firm Clickatell to launch the USSD channel for the eNaira.

See also: Clickatell Partners With Central Bank to Bring Nigerians eNaira Banking

Using the *997# short code, Nigerians without a bank account or a smartphone are now able to create an eNaira wallet, paving the way for mobile money wallet providers like MTN and OPay to start integrating CBDCs into their offering and grow their eNaira transaction volumes.

But alongside empowering Nigerian consumers to make eNaira payments via mobile money, the currency also needs to be accepted by merchants to really kick off.

On this front, the decision taken by Flutterwave, a popular platform for both in-person and online payments, to incorporate the CBDC into its platform represents an important milestone in the journey to mainstream adoption.

Learn more: Flutterwave Launches eNaira Payments for Businesses in Nigeria

For now, eNaira and mobile money transactions remain separate payment options on the platform, but for how long?

Clickatell’s development of mobile money capabilities for the eNaira and Flutterwave’s integration of the currency into its platform is a start, and together they set the stage for increased usage and the possibility of merchants across Nigeria accepting mobile money payments in eNaira.

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