Many banks and e-payment companies take for granted the need to incorporate in their payment portals and deposit slips the purpose or narration for every transaction. Some that add such narration do not make it mandatory for customers to complete such column before a transaction is approved. This makes it difficult to capture the exact purpose for each transaction creating account reconciliation hurdles for their customers and funds recipients. Assistant Business Editor, COLLINS NWEZE writes that the practice has exposed many companies with large volume inflows to internal and external frauds and make account reconciliation cumbersome.
Payments are the centre of financial system stability and sustainable business growth.
To get economy right right, one needs to get payments right, including ensuring that every transaction goes to the right recipient.
Doing that aids reconciliation, reduces internal and external frauds and guarantees the integrity of every payment.
That explains why customers are demanding that banks and other financial institutions should insist that completing the narration (purpose) of every payment- deposit or electronic transfer must be made compulsory for such transaction to be approved.
Findings showed that customers that receive funds from many clients and vendors find it very difficult to distinguish between payments from different customers, when the narrations are not specified.
When that happens, transaction reconciliation becomes very cumbersome difficult, sometimes leading to loss of funds.
On its website, Remita, a digital payment company, said funds can be received conveniently by customers.
“Let your customers pay you easily at any time and from anywhere through the widest number of payment channels available today on a single application,” the company said in a message on its website.
But many companies that transact through Remita are having challenges reconciling huge collections from different customers because many of such customers do not specify the purpose of payment to guide the funds recipient account reconciliation.
The question many companies that receive funds from Remita are asking is: why are such transactions from unspecified sources approved?
Also, people who provide goods and services to an extended target of customers and prospects can get their payments via Remita while monitoring all transactions from initiation to payment in real-time.
“We securely make payments to suppliers, vendors, staff and other billers into their accounts in any bank or mobile wallets, around-the-clock, including after official work hours, weekends and public holidays,” the company added.
An Executive Director, in one of the top publishing companies, said reconciliation of payments from different advertisers who fail to specify the exact adverts being paid for has become a herculean task.
“We have payments that come from Remita, and several banks which we find difficult to identify who paid and for what purpose. That is why banks and payment companies need to make it mandatory that for every payment to be approved, the purpose for such payment must be specified and included in the payment portal or filled in the deposit slip, where cash payment is involved,” the source said.
The source disclosed that in many occasions, the company has contacted Remita to unravel senders of some payments with unspecified narration.
“We talked to Remita and some banks about some payments without known senders. That takes time and energy. Sometimes, we get positive feedback, at other times, our demands are not met, leaving the transactions hanging,” the source said.
Some banks also make it mandatory for transaction initiators to include narration (purpose) of payment in every transaction.
For instance, internet banking on Zenith Bank portal requires that the purpose of every transaction must be included before the payment is approved.
In GTBank, the transaction initiator can skip the purpose of transaction and still get the transaction approved.
An e-payment analyst, Stevens Moris, said banks’ portals should make it compulsory for transaction initiators to include purpose of transaction before approvals are secured.
“I expect that as the years progress, transfers either through Automated Teller Machines (ATMs), mobile phones, or web payment should include the purpose of transaction which should be made compulsory before transactions are approved,” he said.
He said that when payments without narration stay for long could be claimed by the fraudulent person (s) who understand the loopholes in the system.
He said it is not the technology that is breaking down but the way that people use the technology.
Moris explained that payments go back thousands and thousands of years. “I mean, as long as people trade, they had to do payments but values for payments must go to the right recipients,” he stated.
