Business

NIBSS: PoS deployment jumped by 67.1% in one year

The total number of Point of Sale (PoS) terminals deployed in the country increased by 67.1 per cent to 510,773 at the end of March this year from 305,725 in the corresponding period of last year, latest data released by the Nigeria Interbank Settlement System (NIBSS) shows.

 

New Telegraph’s analysis of the NIBSS’ data, however, indicates that the gap between the number of deployed and registered POS terminals seems to be growing.

 

For instance, while the total number of registered POS terminals as at the end of March 2021 stood at 783,136 compared with the 510,773 deployed during the peri-  od, reflecting a gap of 272,363, the number of registered POS Terminals as at the end of March last year stood at 470,122 as against 305,725 deployed, thus indicating a gap of 164,397.

 

The Central Bank of Nigeria (CBN)’s guidelines state that only institutions licensed by the apex bank to serve as merchant acquirers, can own POS terminals, “but shall only deploy and support POS terminals through a CBN licensed Payment Terminal Services Provider (PTSP).”

 

The guidelines, however, state that CBN can grant exceptions where PTSP services are not available. While the number of deployed POS terminals may be lagging registered terminals, further analysis of the NIBSS’ data indicates that there has been a steady increase in the number of deployed and registered POS terminals in the country in the last five years.

 

For instance, according to NIBSS data, the number of the electronic tools that were deployed and registered rose from 112, 847 and 131, 839 respectively in 2016 to 155, 462 and 182, 806 in 2017. It further increased to 217, 283 and 258,443 in 2018; surged to 303  162 and 446, 453 in 2019 and then jumped to 459, 285 and 690,070 in 2020.

 

In its bid to boost financial inclusion by increasing access to financial services, CBN introduced the agent banking system in 2013, under which financial institutions and mobile money operators (MMOs) could appoint third parties as agents, equipped with POS terminals, to provide financial services on their behalf to members of the public.

 

Generally referred to as PoS operators in most parts of the country, the banking agents have seen their business grow rapidly since COVID-19 spread to Nigeria in February last year. Reason:

 

With the pandemic forcing lenders to adopt Nigeria Centre for Disease Control (NCDC)-ordered COVID-19 protocols, such as social distancing and avoiding crowded environments, many banks saw an opportunity to boost their agent banking business.

 

A national daily reported in August last year that three first tier lenders – First Bank of Nigeria Ltd, Zenith Bank and Access Bank – had placed orders for a total  of 100,000 PoS terminals for their agent banking business. According to the report, First Bank, which leads the industry in number of PoS terminal, had ordered another 40,000 terminals; Zenith Bank ordered 50,000 and Access Bank ordered 10,000.

 

Apart from COVID-19 restrictions, the rapid growth in the agent banking business in recent months was also fuelled by the #End- SARS crisis which shook the country in October and November last year.

 

Crisis broke out on October 20 when security forces in Lagos allegedly opened fire on unarmed protesters at the Lekki toll gate, who had been staging a sit-in for about two weeks, calling for the dissolution of the Special Anti-Robbery Squad (SARS), a notorious Police unit that had long been accused of extortion, torture and extrajudicial killings, leading to hoodlums engaging in a looting spree and wreaking massive destruction on public and private property, but especially on lenders’ infrastructure across the country. In order to address the wanton lawlessness, many state governors imposed full curfew in their states, forcing commercial banks to announce a temporary shut down of their branches and their automated teller machines galleria.

 

New Telegraph’s findings at the time showed that in the wake of the riots, many bank customers who could not make cash withdrawals had to resort to patronising banking agents (PoS operators).

 

Analysts also attribute the rapid deployment of PoS terminals to the Shared Agent Network Expansion Facilities (SANEF) initiative unveiled by the CBN, in collaboration with banks and licensed mobile money operators in March 2018.

 

Under the initiative, the financial institutions planned an aggressive roll out of 500,000 agent networks to offer basic financial services, such as cash-in, cash-out, funds transfer, bill payments, airtime purchase, government disbursements as well as remote enrolment on BMS Infrastructure (BVN) to an estimated 50 million Nigerians.

 

Speaking at the event, the Chairman, Body of Banks’ Chief Executive Officers, and Managing Director/Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe, said: “This agreement reflects our commitment to aggressively pursue the CBN 2020 Financial Inclusion target in an integrated way with minimal systemic risk to the financial system. This initiative will also generate 500,000 new jobs over the next two years.”

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