|By Adeola Olaniyi
Adoption figures for mobile money and digital wallet products look impressive on paper. But a growing body of evidence and a small group of practitioners watching from inside the banking system suggests the numbers are concealing a looming crisis.
Nigeria is, by the metrics that dominate headlines, a digital finance success story. As of mid-2022, the Central Bank of Nigeria reported over 80 million active mobile money wallets across the country, representing a threefold increase from 2019. The National Financial Inclusion Strategy has pointed to these numbers as evidence of significant progress toward its targets. International investors have poured billions of naira into fintech startups promising to bank the unbanked. The story, as told, is one of triumph.
The story, as experienced, is more complicated.
Across Nigeria’s major commercial banks and fintech platforms, product teams are grappling with a metric that does not appear in the press releases: activation rates. An account is opened. A wallet is registered. And then, nothing. The customer does not return. The balance sits at zero. The app is deleted, or forgotten, or never used beyond the registration screen. By the most conservative estimates circulating within industry circles, fewer than one in three registered digital wallets in Nigeria is actively transacting. The rest are statistical noise.
The question that product teams are asking or should be asking is not why adoption is failing; it is why they were surprised.
Registration and activation are not the same thing. In the Nigerian market, this distinction matters more than in almost any comparable economy, for reasons that are structural, behavioural, and deeply rooted in the history of formal financial services in the country.
For a significant portion of Nigerian adults, the formal banking system is not a trusted partner. It is an institution that has, over decades, been associated with queues, fees, unexplained deductions, and customer service that was designed to serve the bank’s operational needs rather than the customer’s financial ones. The introduction of a digital wallet does not erase this history. It adds a new layer of complexity – the technology layer – on top of a trust deficit that was never resolved.
This is the context in which a small but growing number of financial services practitioners are sounding warnings that the industry has not yet taken seriously enough. Among the most consistent of these voices is one that comes from an unusual vantage point: not from the fintech startup ecosystem, not from a consultancy firm, but from inside the operational machinery of a commercial bank.
“The wallets are being built for users who already trust digital finance. But the people we are trying to reach -– the traders, the rural savers, the first-time account holders — they are not those users. They are people for whom trust in any financial product has to be earned, slowly and specifically. Right now, the product roadmaps I see being deployed are not designed for that journey. They are designed for conversion metrics. Those two things are not the same, and the gap between them is where the activation crisis lives.” Adeola Olaniyi explained.
Adeola’s perspective carries weight because it is formed from direct observation rather than modelled inference. As a customer-facing banking professional with years of frontline experience at one of Nigeria’s tier-one commercial banks, she has spent years watching how Nigerian customers across income levels, geographies, and digital literacy bands actually interact with financial products at the point of contact.
What she has observed runs counter to the assumptions embedded in most digital wallet product strategies. “The assumption is that if you remove friction from the digital product, adoption will follow,” she explains. “But there is a category of friction that has nothing to do with the product interface. It has to do with whether the user believes that the money they put in will still be there when they want to take it out. That is not a UX problem. That is a trust architecture problem. And you cannot solve a trust architecture problem with a better onboarding screen.”
Industry analysts tracking the Nigerian digital payments landscape have begun to raise similar concerns, though typically in more measured language. A 2022 EFInA report on digital financial service usage noted that the gap between account ownership and active usage in Nigeria was among the widest in sub-Saharan Africa — a finding that has not generated the attention it warrants. The report attributed the gap to a combination of agent reliability concerns, product complexity, and what it described, with some understatement, as “residual trust issues.”
Adeola is less measured in her diagnosis. She argues that the industry is measuring the wrong things, and that this measurement failure is itself a symptom of the design failure. “The metrics that get reported are wallets opened, transactions processed, value transferred, which are all metrics that describe users who have already been acquired. They tell you nothing about the users you are not reaching, and they tell you nothing about the users you acquired and then lost. The activation gap is not visible in the numbers because the numbers were designed to tell a success story, not to diagnose a problem.”
“The activation gap is not visible in the numbers because the numbers were designed to tell a success story, not to diagnose a problem.”
She goes further, identifying what she describes as the specific inflection point at which the trust failure most commonly occurs: not during registration, but during the first transaction and specifically, during the first transaction that goes wrong.
“Every user who has a negative first transaction experience such as failed transfer, a delayed confirmation, a balance discrepancy they cannot explain becomes an ambassador against the product within their social network. In communities where financial decisions are made collectively and word of mouth is the dominant trust signal, one bad experience does not cost you one customer. It costs you twenty. This is the mechanism through which the activation crisis compounds. And it is not being tracked.”
Adeola is not, she is careful to note, arguing against the expansion of digital financial services in Nigeria. She is arguing for a different approach to that expansion — one that she summarises as building products around trust progression rather than feature completion.
“The question that product teams need to be asking is not: what features does this wallet need? It is: what does a user who does not yet trust digital finance need to experience, in what sequence, over what period of time, before they are ready to integrate this product into how they manage their money? That is a completely different design question. And it produces a completely different product.”
She describes a framework she has developed through direct observation of customer behaviour at branch level: a progressive trust model in which the product’s complexity and the depth of financial commitment it asks of the user are deliberately staged across multiple interactions, with each interaction designed to provide a positive outcome that incrementally rebuilds the trust that the formal financial system has, for many users, never fully established.
“Start with the smallest possible transaction. Make it work flawlessly. Confirm it in language the user recognises, not banking language, not app language, but the language they use to talk about money with the people they trust. Then do it again. Then add one small layer of complexity. Then do it again. The product should feel, for at least the first three or four interactions, less like a banking application and more like a very reliable person.”
“The product should feel, for at least the first three or four interactions, less like a banking application and more like a very reliable person.”
This is not, she acknowledges, a framework that is easily compatible with the growth metrics that dominate the current conversation. “Investors want to see user numbers. Boards want to see transaction volumes. Progressive trust architecture produces slower early numbers and much stronger long-term retention. The industry is currently optimising for the metric that makes the deck look good, and it will pay for that decision in attrition rates over the next two to three years.”
It is easy to dismiss warnings like Adeola’s as the scepticism of an insider who is, by professional proximity, closer to the problem than to the solution. But the evidence she cites is real, and the structural analysis she offers is coherent. More significantly, the people most positioned to confirm her diagnosis — the product teams at digital wallet providers who are looking at their own activation data, are not, at present, disputing it publicly.
If her prediction holds, the Nigerian fintech sector finds itself confronting a publicly visible activation crisis rather than a quietly managed one — the question the industry will have to answer is not how it happened, but why it chose not to listen when practitioners with direct knowledge of the problem were describing it clearly, and in advance.
The wallets have been launched. The question is whether the products inside them are ready for the users they were built to serve.
