Mitchell Elegbe

“Give me my tally number” – This would sound weird to millennials and young adults as the days of ‘tally numbers’ are long gone. Well, “who is the last person on the queue?” or “your machine has ‘swallowed’ my card”, may sound more familiar as people try to perform electronic payments using Automated Teller Machines (ATM) in the country.

Well, e-payments in Nigeria has arguably taken an innovative turn since one man, Mitchell Elegbe, Founder and Group CEO of Interswitch, took it on himself to champion the vision and a series of strategic interventions over almost 2 decades towards transforming and revolutionizing electronic transactions as we’ve come to know it today.

Interswitch is an Africa-focused integrated digital payments and commerce company that facilitates the electronic circulation of money as well as the exchange of value between individuals and organisations on a timely and consistent basis.

The company envisioned and midwifed by Mitchell, along with a team of young, like-minded pioneers started operations in Nigeria in 2002 as a transaction switching and electronic payments processing company that builds and manages payment infrastructure as well as deliver innovative payment products and transactional services throughout the African continent.

Interswitch Limited, now a pan-African company, provides technology integration, advisory support, transaction processing and payment infrastructure services to governments, banks and corporate organisations and high-net individuals.

Mitch, as he is fondly called, is an Electrical/Electronic Engineering graduate from the University of Benin in Nigeria.

He is an alumnus of the IESE/Wharton/CEIBS Global CEO Programme and he is a Bishop Desmond Tutu fellow of the African Leadership Institute. He had worked as the Group Head for Business Development at Telnet, a fast-growing telecommunications company, and was a Wireline Engineer at Schlumberger.

As a student, Mitch struggled to make ends meet by making a business out of dubbing cassettes he borrowed from friends but an encounter with an ATM seizing his card in Scotland inspired the idea for Interswitch.

One of his ideas as a young engineer working at the telecom firm, Telnet, at the time—modernizing Nigeria’s payment system—grew into Interswitch, which makes life easier for Nigerians of all economic backgrounds to make financial transactions, mostly, cashless.

When he envisioned Interswitch at the turn of the century, the cash that dominated Nigeria’s economy had become worrisome. An example: With banks closing on Friday afternoons, Nigerians withdrew cash to last the entire weekend. This led to crime (robberies) or getting exhausted if more expenses are encountered.

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Developing electronic payment in Nigeria required overcoming a strong cultural bias toward cash as Nigerians use cash as a solution to almost any situation including giving cash as gifts at weddings, at burials, at childbirth, and other occasions.

Smartly, Mitchell decided that the best approach is not to eliminate cash but to preach a message that there is a more efficient way to use it.

He also had to overcome scepticism captured in questions such as: ‘How do you run a 24/7 business in a country where power is not constant? In a country where telecom is still very unreliable? When the people you target are predominantly in love with their cash? How do you get the human resources needed for an entirely new area like electronic payment?’ etc.

Mitch knew that electronic payment could be appealing to banks as well as the Nigerian people because transactions are a significant source of banking revenues. He partnered with Accenture to develop a business case and a business plan.

The plan avoided the ‘one-man business’ syndrome but gave ownership to institutions that were needed from a corporate governance point of view to assist in growing the business. Banks owned about 85 per cent of the company, with one or two IT companies to ensure that proper corporate governance was followed.

This close partnership with key players in finance and IT helped Interswitch stay ahead of the competition and to avoid some of the pitfalls of sole ownership.

Even though the company was built on his idea, he began life at Interswitch as an employee with no shareholding. His priority was not ownership of the company, but rather to see out the execution of what he believed was a brilliant idea.

His stellar leadership of the company eventually earned him and his team stakes in the enterprise. With the benefit of hindsight, he is convinced that his decision to forgo ownership of the company at inception was correct and had a significant impact on the company’s stable growth in its early days.

In 2004, Interswitch won a gold medal for innovation at the Computerworld Honors, an international award program which recognizes individuals and organizations whose achievements in ICT have impacted society. Before receiving the award, the company had seven local banks on its network.

Thereafter, the number increased to 13, and the first set of non-banks, including an ATM consortium and Globacom, a mobile telecommunications provider, were added. Today, the company has almost all Nigerian banks and 11,000 ATMs on its network.

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Eight years after it was set up, Interswitch’s shareholders decided to tweak the ownership model of the company. With the company valued at over $170 million, a private equity deal was structured and two-thirds of the company was sold to a consortium.

The equity injection bolstered Interswitch’s balance sheet and paved the way for it to begin realizing its ambition for the continent, which was soon reflected by its acquisition of Bankom, Uganda’s leading transaction switching company.

From 2014 to 2019, Nigeria’s fintech scene took in more than $600m in funding, according to a report by McKinsey, the consultancy. In the past three years, fintech investments in Nigeria almost tripled, while in 2019, Nigerian fintech took in one-quarter of all funding raised by African start-ups, the report said, Interswitch was not left out.

As a leader, Mitch fosters creativity at Interswitch and encourages employees to air their views and to pursue ideas and passions not directly tied to their job description. The company also sponsors a “Hackathon” in which its engineers work on a project for 72 hours and showcase to a panel of judges.

Interswitch has a division dedicated to training their staff, as well as third party individuals in their business operations as Mitch believes that by investing in an employee’s professional development, you are showing them that they can build a future in the company.

Interswitch also has profit-sharing policies that are tied to performance and rewards hardworking employees, allowing them to achieve additional earnings if given targets are met.

In recognition of his stellar attributes and his success with Interswitch, Mitch has won several awards including the CNBC/Forbes All African Business Leader (AABLA) for West Africa and Ernst and Young Entrepreneur of the Year Award among others.

He was named a winner in the African Banker Awards 2019 as the African Banker Icon. He was awarded the Transformational Business Award by the African Leadership Network at the 2013 Africa Awards for Entrepreneurship.

The award is in recognition of a notable business leader who has created a significant socio-economic impact in Africa by building a business with revenues greater than US$50m.

Undone, Interswitch also wants to expand and introduce the use of electronic payment into sectors like transportation and health services as he believes Fintech is yet to tap into a tenth of what is happening as far as electronic payments are concerned.

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Currently, Nigeria’s economy is dominated by the informal sector and the Nigerian government, which is now promoting a cashless economy, estimates that the direct cost of handling, processing, and managing cash exceeds $1.2 billion as at 2012.

Seeing that banks are a major source of funds used for the country’s development, Interswitch also contributes to the country’s development by working with microfinance banks as all of Nigeria’s microfinance banks are now part of the Interswitch network.

Today, Interswitch is demonstrating how electronic payment can work in Nigeria. In time past, you had to travel to a physical bank branch or office and wait in the queue to obtain money or deposit money or pay a bill.

Now, you can do these things, and more, from whatever location, at your comfort, instantly by cell phone, at an ATM, or through a wide network of merchants. You not only reap the benefits in security but also in productivity and time.

Having seized the opportunity to make a difference within the African business space, using technology and human capital development as a springboard, which is what fueled the vision that has become ‘Interswitch’ today, he strongly believes that leadership creates opportunities not only to articulate a vision for a generation but also to shape what tomorrow will be.

However, Mitchell has somewhat become disenchanted with successive years of policy failure across sectors of governance and policy in Nigeria (and Africa) that hold the greatest propensity to drive socio-economic impact if executed right; although he currently sits within the private sector, he, however, sees an impending evolution of his roles and responsibilities over the next few years, moving into the forefront of championing public-private sector-driven initiatives, evolving into key policy/advisory/consulting roles supporting the government, whilst not ruling out the possibility of getting actively involved in the mainstream of public sector leadership at some point in the future.

If Mitchell made us love the new face of payment in Nigeria, little wonder what he will bring into public sector leadership.