Contactless payments have the potential to transform the mass transit system in Nigeria and enable governments to introduce welfare measures in the form of subsidized pricing to cushion the effect of the removal of subsidies on household incomes
The Vice President and Head, Visa Consulting & Analytics, SSA, Olubunmi Kuku, who disclosed this in a presentation, said transportation is a key sector of the economy contributing 2.2% to Nigeria’s GDP.
Quoting the National Bureau of Statistics, she said commercial road transport had a market value of N3.9 trillion as of 2022.
She, however, observed that the sector remains highly fragmented and dominated by commercial and minibuses popularly known as Danfo & Korope respectively which account for more than 70% of the entire motorized commercial traffic volume in the country.
“While there have been various initiatives to formalize the sector through updated laws, route management systems and the inclusion of the private sector in government bus programmes, there have been mild gains in terms of impact.
“Contactless can be key to institutionalizing an efficient market structure enabling real-time visibility in transport systems, data-driven decision making on route management and targeted audience engagements for other stakeholders.
“Most importantly, contactless can enable governments to introduce welfare measures in the form of subsidized pricing to cushion the effect of removal of subsidies on household incomes,” she said
She opined that contactless has been a key success factor for highly efficient transport systems globally with the top 10 cities in the Urban Mobility Readiness Index of 2022, all using contactless as an enabler to gain efficiency through the reduction of queues for tickets and collection time associated with cash payments.
She added that contactless has also enabled data collection in these systems to make better decisions on route and traffic management, stressing that Transport for London (TFL), which is ranked 10th on the Index, grew from 2,586 journeys in 2012 made using contactless to 2.5 billion journeys as of 2022 highlighting the impact of the technology.