Despite the significant number of registered users of fintech applications in Nigeria, many of these accounts remain inactive. This article explores the reasons for this phenomenon as well as potential solutions.
Fintech Economy in Nigeria
The growth of fintech in Nigeria has led to a large number of user registrations; however, data shows that easy access to services does not always result in active use. For example, only 8% of eNaira wallets engage in weekly transactions. Some leading fintech platforms, such as Kuda and PalmPay, report millions of registered users, but the actual number of active users is significantly lower.
Reasons for Wallet Dormancy
Key factors contributing to wallet dormancy include promotional sign-ups and one-time uses. Apps from companies like Kuda and OPay offered large bonuses to attract users, leading to increased download numbers, but this did not guarantee sustainable use. Many users sign up just to receive bonuses and then abandon the platform.
The Potential of Dormant Wallets
Dormant wallets serve as both a warning and an opportunity for fintech companies. While a high proportion of inactive accounts indicates weak engagement, these wallets can be reactivated through the introduction of new services such as regular payments, microloans, and loyalty programs, which can help boost user activity levels.
The situation with dormant fintech wallets in Nigeria requires careful analysis and action from companies. Enhancing user experience and introducing new services may help increase activity levels and reduce costs associated with acquiring new customers.
