Only about 20 per cent of the total financial transactions being carried out in Nigeria are done through electronic payments channels, New Telegraph has learnt. This shows that cash transactions by individuals and corporates and particularly by those in the informal financial system through cash accounts for 80 per cent of the entire transaction volume.
These were disclosed by the Chief Executive Officer of the Nigerian Interbank Settlements System Plc. (NIBSS), Mr. Adebisi Shonubi in an exclusive chat with this newspaper in Lagos. He said, “while it can be said that there has been traction in the are of e-payment adoption in the country, it is intriguing to note that we are in competition with cash, as most transactions carried out in the country are still predominantly carried out using cash.”
He said the 20 per cent transactions are carried out on such platforms such as the Automated Teller Machines (ATMs), Point of Sales (PoS), National Instant Payment (NIP), NIBSS Electronic Funds Transfers (NEFT), E-Bills, mobile money among others. Available data obtained on NIBSS website shows that over N60 trillion worth of transactions were carried out only on two platforms – NEFT and NIP- by banking customers in 2017 alone. Transactions on other platforms are also significant, Shonubi said.
The NIBSS CEO explained that when the cashless economy policy of the Central Bank of Nigeria (CBN) was introduced effectively around 2012, there was a lot of lethargy on the pars of bank customers. “However, as more and more platforms and security are being provided towards providing safe and secure transactions for users, the confidence in the use of electronic channels continued to grow,” he said.
“I can tell you for a fact that while cases of electronic fraud appears to be rampant globally, Nigeria, today, has one of the lowest e-fraud rates due to our adoption of a more secure Europay, Mastercard and Visa (EMV) platforms for our cards and increased education among the customers.”
He also noted that convenience tops reasons for bank customers’ increasing adopting of e-payment channels for transactions.
‘I think convenience has been one of the key drivers, which, when layered on top of infrastructure, also shows that significant growth we have seen has been more from the cities, state capital because you have infrastructure that they can use to do electronic transactions whether on their mobile devices or shots where they can use their cards on Point of Sales (PoS) terminals plus the convenience where you don’t need to keep a large amount of money in your pockets anymore,” the NIBSS boss said.
“In summary, it is nice that the Senate, a few years ago, did not allow the Central Bank of Nigeria to print 5,000 Naira note because with the prices of things, if you want to carry cash, your pocket will be building.
“But instead, we have promoted system where you can take your card to purchase items worth tens hundreds of thousands of Naira without having to fill your pockets and event go the bank first to withdraw. The infrastructure has helped in the cities.” Shonubi explained, “for us to improve, we have to move them out of the cities.
The education and convenience have been further deepened this traction, we have to move them out of the cities with the convenience and education, banks have aggressively pushed. “If you look at the pages of newspapers on certain days of the week, most banks tell you about their various e-channels and they make them convenient for people to use. So, those are some of the main drivers.
“Of course, behind it, we have the CBN and some of its policy, such as the cashless policy to move from cash to the effect that if you want to do cash physically on certain thresholds, there is a cost to it.
They have tried to regulate the interchange to review the amount that customers pay to make electronic payment affordable and convenient.”
While noting that the country has a target to achieve 80 per cent financial inclusion in line with FSS 2020, Shonubi said there is need to restructure the industry especially the mobile money segment of the e-payment sector in order to achieve the targeted inclusion. He noted that one of the initiatives that had been taken to further guarantee security of financial transactions in the cashless economy was the introduction of the Bank Verification Number (BVN).
“Today, while there are over 90 million bank accounts in the country, I am happy to announce that over 31 million of this figure has been linked with BVN. However, it should be noted that not all the over 90 million accounts are active. But from the active ones, we have been able to connect 31 million with BVNs,” he said.
Shonubi stated that with BVN, it becomes easier to tie down an account suspected with fraudulent transactions.
No matter the number of time you change your account name in different banks, BVN provides the opportunity for them to be traced,” he said. Already, he said the CBN had opened a Black Book where it lodges the details of bank accounts and their BVNs found suspicious or fraudulent, stressing, “the database is, therefore, shared with all the banks so that they can deny owners of those blacklisted accounts further transactions.
“Banking transactions are a contract between the banks and their customers and can be denied further transaction deals once it is clear that those accounts have a big question mark on them,” he added.
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