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Tag: BVN

  • CBN extends BVN deadline till October 31

    CBN extends BVN deadline till October 31

    •Pro-democracy group threatens class action 

    The Central Bank of Nigeria (CBN) has extended the deadline for the Bank Verification Number (BVN) till October 31.

    A statement from the CBN said the decision was due to “the passionate appeals from the public for the extension of the deadline for the Bank Verification Number (BVN) for the biometric registration exercise” after the expiration of the earlier deadline yesterday.

    The CBN said it “noticed with satisfaction the level of compliance among the banking public and also acknowledged the difficulties which the people have gone through in the last few days in the quest to beat the registration timeline. More so, arrangements are being made to enroll bank customers in Diaspora in the next few days”.

    To this end, the CBN said it “considered it necessary to grant extension for the exercise to enable all bank customers to enroll in the BVN and to facilitate hitch free completion”.

    However, before the CBN announced the extension, a pro-Democracy Non-governmental organisation – Human Rights Writers Association of Nigeria (HURIWA) “condemned the decision of the Central Bank of Nigeria to subject Nigerian account holders to untold hardship because of the deadline unilaterally imposed on the so called Banks Verification Number.”

    Customers also invaded the banks to try to meet the deadline.

    HURIWA called for “the registration to be permanent and seamless rather than being undertaken in a military fashion”.

    HURIWA urged the CBN Governor, Mr Godwin Emiefiele “to either make the BVN registration a continuous exercise or be prepared to face avalanches of class law suits and other Civil disobedience strategies to be worked out by like minded human rights activists all across Nigeria.”

    Many in Asaba, the Delta State capital yesterday visited their banks to beat the bank verification exercise.

    Traders in Onitsha and its environs also thronged branches of commercial banks to meet the deadline.

    A correspondent of the News Agency of Nigeria (NAN) who visited most banks in Onitsha metropolis on Tuesday, observed a large number of customers queuing for registration.

    NAN reports that the number of customers undergoing the process was more in old generation banks compared to their new generation counterparts.

    Some of the customers on the queue complained that the process was to slow due to internet connectivity problems; they, therefore, appealed to the CBN to extend the registration period.

    Mr Nnamdi Okoro, a businessman, told NAN in one of the old generation banks, that most of the customers had arrived the bank as early as 8 a.m., but only a few had completed the exercise at about noon.

    “All other process of the exercise had been smooth except the actual biometric and fingerprint capturing as well as confirmation from the system,” Okoro said.

    Chief Donatus Ezike, the Secretary, Plastics and Allied Products Market, Onitsha, appealed to the CBN to see the need to extend the exercise in order to accommodate millions of people not captured before the deadline.

    “I must commend the bank staff for their wisdom to communicate their difficulties to us, the customers; but it is clear with this difficulties that the CBN should see the need to extend the date,” Ezike, who banks with an old generation bank, said.

    Mr Tony Chukwurah, a staff of one of the new generation banks, said that customers had been given more than enough time to do the exercise as most banks had put out advertisements to reach their customers.

    Chukwurah, however, expressed the hope that the CBN would extend the date to accommodate those who had genuine excuse for not participating in the exercise before now.

    “This would be an eye opener for Nigerians to take civic and public exercises serious as it ought to be,” he said.

    NAN reports that the CBN introduced the BVN registration to check banking fraud associated with multiple account operation by an individual with different names, addresses and other identities.

  • CBN extends BVN deadline

    CBN extends BVN deadline

    The Central Bank of Nigeria has extended the deadline for the Bank Verification Number exercise till October 31.

    A statement by the CBN said the decision to extend the BVN registration was due to passionate appeals from the public for the extension of the exercise after the expiration of the earlier deadline on Tuesday.

    The apex bank said it noticed with satisfaction the level of compliance among the banking public and also acknowledged the difficulties which the people have gone through in the last few days in the quest to beat the registration timeline.

    It added that arrangements are being made to enroll bank customers in Diaspora in the next few days.

     

     

  • Group creates BVN registration awareness

    Group creates BVN registration awareness

    The Consumer Right Awareness Advancement and Advocacy (CRAAAI) has  urged Nigerians to go and register for their Bank Verification Numbers. Registration deadline is June 30.

    The Chairman of the CRAAAI, Mr. Moses Igbrude, who spoke  at a stakeholders’ forum on identity management in the economy, organised to enlighten Nigeria, said identity management is a broad administrative area that deals with identifying individuals in a particular system. He listed the system to include a country, a network, or an enterprise and controlling their access to resources within that system by associating, user rights and restrictions with the established identity.

    He added that the role of technology in modernising the banking sector has witnessed a paradigm shift from the traditional methods of banking to digital channels which involve enormous levels of electronic data capture (EDC) of customer’s information.

    “Everybody needs security; if people are identified before they commit any crime, the person will be identified easily. “

  • Countdown to bank verification number

    Countdown to bank verification number

    By the end of this month, about 34 million bank customers in Nigeria are expected to have keyed into the biometric data capture policy and have their bank verification numbers (BVN) or risk losing their accounts. Bukola Aroloye in this report examines the pros and cons

    LIKE other previous policies introduced by the apex bank, the Bank Verification Number (BVN) initiative announced last year by the Central Bank of Nigeria (CBN) is yet to be accepted wholeheartedly by majority of the banking consumer public. Talk of Nigerians averse to change!

    What the BVN is all about

    The BVN project launched on February 14, 2014 by the immediate past CBN governor, Mallam Sanusi Lamido Sanusi, was driven at the time by the Bankers’ sub-committee on the Biometric project, with the then Managing Director/Chief Executive Officer, Zenith Bank Plc, who is now the CBN governor Mr. Godwin Emefiele as its chairman at the time of its introduction.

    The objective of the BVN initiative is to protect bank customers, reduce fraud and further strengthen the Nigerian banking system.

    It is the registration of customers in the financial system using biometric technology. Biometric technology involves the process of recording a person’s unique physical traits such as fingerprints and facial features. This record can then be used to correctly identify the person afterwards. Once a person’s biometrics has been properly captured, the person is given a BVN.

    Fraud is reduced because no two people have the same biometric information. With the BVN, banks will be able to check the features of a person doing a transaction against the record which the bank has captured, thereby correctly identifying the owner of an account. The BVN given to a person by one bank will apply to that same person for any bank in Nigeria.

    At the BVN launch, Mallam Sanusi had noted that Nigeria is the only country in the world to deploy biometrics data capture in its banks nationwide.

    He had promised that within two years after the launch, Nigeria would have an industry that is efficient, saying the BVN initiative would introduce limitless opportunities in Nigeria’s financial space. “I wouldn’t want us to underestimate the significance of what we have achieved. If we make biometrics the basis of whatever we do, then it will be easier to standardise and reduce cost and make banking more efficient. We will deliver services at lower cost, enhance customer service and ensure access to cheaper credit,” he had said.

    He had said that within 18 months, every single customer should have his or her biometrics taken, with an assurance that every identity would be safe.

    According to the CBN, the introduction of BVN is targeted at addressing cybercrime, ATM fraud and other kinds of financial frauds, as well as safeguarding customers’ funds to avoid losses through personal identification numbers (PIN).

    Aside this, the apex bank stated, “The BVN will also strengthen the current Know Your Customer guidelines and allow banks have more confidence in giving out loans. With the BVN, the financial history of a customer is stored at a central location and can be accessed by other banks who seek information about that customer.”

    Also with the BVN, credit history of customers who want to secure loans is made available to banks. Customers with suspicious accounts or transactions will also be tracked with the BVN, making it difficult for fraudsters to maintain bank accounts.

    To enable their customers meet up with the deadline, some banks have since late last year been offering their customers the option of enrolling on Saturday, and in addition to making the enrolment easier for the customers, the CBN, in its latest circular on the BVN, directed that for existing customers, capturing signatures and photo identification documents may not be necessary as the bank is expected to have those records during account opening.

    Since its launch, the CBN and banks have been intensifying efforts to register their customers. They have also intensified efforts in sensitising all their customers on the processes of registration. Most of the banks have indulged in multiple communication channels in wooing their customers to key in. The channels include short text messages, messages displaced on their websites, e-banking platforms, ATMs and flyers placed in strategic places in banks.

    The CBN and banks have also been educating customers on activities of fraudsters. Fraudsters have been sending bank customers emails, requesting them to supply personal details so they could be registered on BVN online. Thus, the banks have been educating customers that all BVN registrations are physical and done only at bank branches nationwide. “Bank customers should ensure that they do not respond to suspicious emails pretending to be from their banks and requiring them to provide sensitive information online as registration is only done at bank branches,” the CBN said.

    Commenting on the BVN progress, Emefiele recently said the project would enable some of the bank customers and citizens at the lower cadre of the consumption ladder get access to banking services and credit facilities.

    The CBN governor said, “This system will see the opening up of consumer credit facility and this will contribute to productivity and development of Nigeria. The banks have supported this because this is the opportunity we have been yearning for, to open up consumer credit facility. With biometrics of consumers taken, we will be comfortable to lend to customers and defaulters will be blacklisted.

    “We are saying that with this project, people will be able to buy cars easily, do mortgage easily with the kind of data that would be fed into the centralised system and access bank credit easily. By extension, we would see how it would affect productivity in the economy. Given the opportunity that we have right now, where the customers’ biometric is given, it makes it comfortable for us to lend money to farmers who need money to buy fertiliser, and to cobblers, barbers, or any form of business,” he explained further.

    Mr. Gunther Mull, Managing Director of Dermalog Identification Systems, the German company that was engaged to deploy and implement the BVN system, said the platform would make life easier for banks and their customers.

    Already the CBN is introducing measures to make Nigerians comply with the BVN, especially high net worth individuals.

    The CBN has warned that any bank customer without the number would be deemed to have inadequate know-your-customers (KYC) and this may affect his or her transactions with the bank. The regulator recently announced that from next month, banks would stop honouring transactions from N100 million and above, from customers that don’t have the BVN.

    Such transactions, according to the central bank, include but are not limited to, money transfers, loans and contingencies.

    The Director, Banking and Payment Department, CBN, Mr. ‘Dipo Fatokun had explained that the policy was introduced in furtherance of the regulator’s efforts to develop a safe, reliable and efficient payment system in the country.

    The scheme is also expected to improve the banking system’s Know-Your-Customer (KYC) requirements as stated by the Financial Action Task Force (FATF), as well as to support innovative banking solutions, especially for retail banking.

    A cross section of bank’s customers who spoke to our correspondent on the BVN initiative said they welcomed the idea. While some said they have enrolled, many others admitted they haven’t enrolled. Majority of those that haven’t enrolled said they haven’t had the time to enroll but assured they will do so before the June 2015 deadline.

    Recently, the Group Managing Director/Chief Executive Officer of Fidelity Bank Plc, Mr. Nnamdi Okonkwo in a statement, accentuates this fact as he emphatically stated that the BVN programme will be used to manage the credit score of bank customers. To this end, credit report from credit bureaus, would help lenders to determine who really qualifies for a loan as identities provided by the exercise would be matched against the information. As a matter of fact, this will help check credit worthiness of borrowers as the BVN initiative will provide a centralised customer biometric information system in the banking sector which will make it difficult for people who take multiple loans with no intension of repayment to operate. There is no doubt that the activities of such people are inimical to progress in the banking sector.

    Adewale Olumide, a customer with one of the new generation bank told our correspondent she hasn’t registered but she likes the idea behind the policy.

    “Yes, I am aware of the policy. My bank has been telling me to register. I have seen the advert. I like the policy but I haven’t had time to register, but I will surely do so before the June deadline. I’m just a bit lazy about it,” she said.

    According her, perhaps it’s just the typical syndrome of waiting till the last hour and then rushing to comply. “I believe the deadline is still far. Perhaps, when the deadline approaches, those of us who haven’t registered will rush to register. It’s not a good attitude but that’s our attitude,” she noted.

    Several other banks customers said they will create time to comply before June 2015.

    Meanwhile the Managing Director of Nigerian Interbank Settlement System, Mr. Ade Shonubi spoke on the ongoing bank verification number exercise and other related issues in the banking industry during an interactive session with journalists in Lagos recently confirm that the feedback from the banks is very positive.

    “I think we should start by understanding why we are embarking on the BVN project, you will see that there is no way the Banks would not be enthusiastic about it. When the BVN project was initiated, there were three key areas of focus,” he said.

    Expatiating, he said: “First and most important of all is for us to identify our customers uniquely across Banks and across Accounts. So, once a customer enrolls and obtains a BVN, that same BVN is tied to all his Bank Accounts. Now, relating to identifying is the possibility of Banks blacklisting people who have committed financial infractions. It could be fraudsters; it could be people who have forged documents; etc. What happens today is that Mr. A goes to Bank E, commits fraud, then runs to Bank F and because there is no way of tying all these activities across, we found out that there are quite a lot of losses related to these individuals from one Bank to another.”

    Case for BVN

    According to Shonubi, “BVN removes these losses. The beauty of it all is the unique identification in the financial space. Generally, people say every Nigerian is a crook but in actual sense, maybe only one per cent of Nigerians are crooks but the remaining 99 per cent are considered crooks because of that one per cent.

    “So, BVN allows us, again, to find these individuals and to create that blacklists that other stakeholders in the financial space can have access to. With this, even foreigners through their Banks, may be able to identify fraudsters that have been tracked in the Nigerian Financial space. Secondly, the BVN would allow us begin to build retail credit.

    “Today, the Banks have concerns over identification in retail lending that is why the entire retail consumer lending portfolio is targeted at people with formal employment whose employers can serve as a point of reference. There are however a lot of self-employed people as well as others working in smaller organisations who require this, but do not have access due to the identification issue, as no bank will take the risk of lending to them – considering cases of resignation and eventual run off, how will the Banks get repayment? But with the availability of BVN, these set of individuals will also benefit from Retail Lending as identification and tracking issues will be mitigated. The third, which I have already alluded to, is we want to be able to authorise financial transactions down the road, on an Automated Teller Machine (ATM) or a Point of Sales (PoS). You can use your biometric identifier to say ‘Yes, this is me and I am authorising the payment.’ So, those are the three key focus areas that led to the BVN project being conceived and implemented.”

    In the view economic analysts, as CBN implements the BVN initiative, it has to ensure the security of the data, from rogue bankers and also importantly from damage, as has been the experience with other sectors that engaged in biometric enrolments.

    Besides, they said the apex bank should also create measures to punish banks that might exploit the information they have to blackmail customers with whom they have disagreements.

    While majority agree the BVN is a great initiative that would reduce illegal banking transactions and improve national financial intelligence gathering, they however suggest that the interests of account holders should be accorded importance so that their increased confidence in the banking system would improve the financial standing of banks.

    According to Bamide Alo, “Customers will use banks more when they know that their transactions are safe. BVN offers vast opportunities to protect customers, banks and the entire financial system.”

    The CBN, he emphasised, “should enhance the security of BVN to protect the entire financial system. It should be on the watch for technologies to keep improving BVN capacities.”

  • BVN cuts forex to $50,000

    The Bank Verification Number (BVN) initiative, when fully implemented, will help to curb arbitrage in the foreign exchange (FOREX) market and reduce the spending limit on the use of the naira denominated debit cards for transactions abroad, from $150,000 to $50,000 per person yearly. The daily cash withdrawal limit on the card was also fixed at $300 per person.

    Sterling Bank’s Executive Director Abubakar Suleiman, who disclosed this at an interactive session with reporters in Lagos, explained that with the BVN, each bank customer will have a unique identification, which will make it easy to prevent people from flouting the Central Bank of Nigeria (CBN)’s policy on the use of naira-denominated debit cards for transactions abroad.

    According to the Managing Director/Chief Executive Officer, Union Bank of Nigeria Plc, Mr. Emeka Emuwa, the decision was taken because of some cases of card abuse abroad which impacted exchange rate stability.

    The Union Bank boss had explained: “We did find that in a number of cases people were using the cards in a manner that they were not expected to use them and there have been cases of arbitrage. So, in order, to sustain stability, what was agreed by the committee was that the limit for the use of the naira debit cards would be reduced.”

    However, industry watchers argued that bank customers could attempt to circumvent this policy by opening several bank accounts and using the naira debit cards they will be given to make withdrawals above the limit.

    But, according to Suleiman, this will not be feasible when the BVN initiative is fully implemented, as each bank customer will have a BVN that will give him/her a unique identity that will be known to every player in the financial sector. Thus, when such a customer has reached the limit of his naira debit card spending abroad, he will not be able to use another card as the system will immediately recognise him.

    The BVN, which is an initiative of the CBN and the Bankers’ Committee, was launched on February 14, last year.  It is a unique identifier for each bank customer across the financial industry, making it possible to build and track customer financial history and activity. This will allow banks access to more reliable information that could inform decisions on customer loan and credit applications and other complex transactions.

    The initiative is expected to boost financial inclusion as those who have typically stayed away from mainstream banking due to low literacy levels will be able to open and access their bank accounts using their biometric information rather than traditional identification methods.

    To encourage enrolment for the BVN, the CBN had directed banks to  honour only transactions over N100 million from customers with BVN from March 2015. Such transactions,  the Central Bank said, include but not limited to, money transfers, loans, and contingencies.

    The CBN also urged bank customers to register for their BVN by this month, warning that any customer without a BVN would be deemed to have inadequate Know-Your-Customers by that date.

    The Managing Director, Nigeria Interbank Settlement System Plc (NIBSS), Mr. Ade Shonubi, said customers who have done the mandatory biometric registration at any bank branch would soon start collecting their BVN cards as the cards were already with the banks awaiting collection by customers.

    Shonubi said bank customers would not be charged for the cards.

    The NIBSS boss said: “We are giving the BVN cards out for free. The cost is borne by the Bankers’ Committee, which considers the whole biometric project very important. They have been bearing the cost; the cost of the cards, cost of almost everything else that has to do with the BVN.

    “I have got my BVN card. I would encourage bank customers to talk to their banks as well. They have been printing them and sending them to the banks to distribute to the branches where you have enrolled, you would be sent an SMS. For those that have given email address, it would be sent to their emails.”

    Indeed, investigations reveal that some banks have started giving the cards to their customers.

  • BVN cuts forex to $50,000

    The Bank Verification Number (BVN) initiative, when fully implemented, will help to curb arbitrage in the foreign exchange (FOREX) market and reduce the spending limit on the use of the naira denominated debit cards for transactions abroad, from $150,000 to $50,000 per person yearly. The daily cash withdrawal limit on the card was also fixed at $300 per person.

    Sterling Bank’s Executive Director Abubakar Suleiman, who disclosed this at an interactive session with reporters in Lagos, explained that with the BVN, each bank customer will have a unique identification, which will make it easy to prevent people from flouting the Central Bank of Nigeria (CBN)’s policy on the use of naira-denominated debit cards for transactions abroad.

    According to the Managing Director/Chief Executive Officer, Union Bank of Nigeria Plc, Mr. Emeka Emuwa, the decision was taken because of some cases of card abuse abroad which impacted exchange rate stability.

    The Union Bank boss had explained: “We did find that in a number of cases people were using the cards in a manner that they were not expected to use them and there have been cases of arbitrage. So, in order, to sustain stability, what was agreed by the committee was that the limit for the use of the naira debit cards would be reduced.”

    However, industry watchers argued that bank customers could attempt to circumvent this policy by opening several bank accounts and using the naira debit cards they will be given to make withdrawals above the limit.

    But, according to Suleiman, this will not be feasible when the BVN initiative is fully implemented, as each bank customer will have a BVN that will give him/her a unique identity that will be known to every player in the financial sector. Thus, when such a customer has reached the limit of his naira debit card spending abroad, he will not be able to use another card as the system will immediately recognise him.

    The BVN, which is an initiative of the CBN and the Bankers’ Committee, was launched on February 14, last year.  It is a unique identifier for each bank customer across the financial industry, making it possible to build and track customer financial history and activity. This will allow banks access to more reliable information that could inform decisions on customer loan and credit applications and other complex transactions.

    The initiative is expected to boost financial inclusion as those who have typically stayed away from mainstream banking due to low literacy levels will be able to open and access their bank accounts using their biometric information rather than traditional identification methods.

    To encourage enrolment for the BVN, the CBN had directed banks to  honour only transactions over N100 million from customers with BVN from March 2015. Such transactions,  the Central Bank said, include but not limited to, money transfers, loans, and contingencies.

    The CBN also urged bank customers to register for their BVN by this month, warning that any customer without a BVN would be deemed to have inadequate Know-Your-Customers by that date.

    The Managing Director, Nigeria Interbank Settlement System Plc (NIBSS), Mr. Ade Shonubi, said customers who have done the mandatory biometric registration at any bank branch would soon start collecting their BVN cards as the cards were already with the banks awaiting collection by customers.

    Shonubi said bank customers would not be charged for the cards.

    The NIBSS boss said: “We are giving the BVN cards out for free. The cost is borne by the Bankers’ Committee, which considers the whole biometric project very important. They have been bearing the cost; the cost of the cards, cost of almost everything else that has to do with the BVN.

    “I have got my BVN card. I would encourage bank customers to talk to their banks as well. They have been printing them and sending them to the banks to distribute to the branches where you have enrolled, you would be sent an SMS. For those that have given email address, it would be sent to their emails.”

    Indeed, investigations reveal that some banks have started giving the cards to their customers.

     

  • ‘How BVN will stem fraud’

    ‘How BVN will stem fraud’

    The Nigerian Interbank Settlement System (NIBBS) provides the infrastructure for automated processing, payment settlement and funds transfer. Given the ease of using the channel, more Nigerians are now embracing electronic banking. NIBBS Managing Director Mr. Folashodun Adebisi Shonubi says the platform is waxing stronger. In this interview with Group Business Editor SIMEON EBULU, he describes the Bank Verification Number (BVN) as a noble initiative that will reduce fraud.

    Is the synergy between the BVN and the National Identity Management Commission bringing about a sustainable identity management system for Nigeria?

    We need to understand the concept of identification. The National ID is supposed to be the root means of identifying an individual. That means it is general but you will always find specific ID databases that will be created. There is the National Driving licence that applies to people, who are of driving age and have decided they want to drive. They are different from those that may be banking customers that cannot drive. So, you will always have different databases. However, the idea is to have a common way of linking them. Somebody has a driving licence and at the same time has an ID for health, how do we ensure it is the same person? That is the idea behind the National ID.

    With the Bank Verification Number (BVN), we are creating something for banking customers. The purpose is not just to identify but also ultimately to use it to authorise financial transactions. This cannot be done using the National ID which would identify but it is not meant for authorising financial transactions. The BVN is a means of sharing data. When one enrolls for a BVN, we can make that information available.  If you already have the National ID and you don’t have a Bank Account, once you use it, we pull the information from the National ID and update it in creating your BVN identification. This is with the intention of making it easy for people so that when you are enrolled for one, it is easier to enroll with the other and we have actually started that process of integration.

    How will the BVN work?

    The feedback from the banks is very positive. I think we should start by understanding why we are embarking on the BVN project, you will see that there is no way the Banks would not be enthusiastic about it. When the BVN project was initiated, there were three key areas of focus. First and most important of all is for us to identify our customers uniquely across Banks and across Accounts. So, once a customer enrolls and obtains a BVN, that same BVN is tied to all his bank accounts. Now, relating to identifying is the possibility of Banks blacklisting people who have committed financial infractions. It could be fraudsters; it could be people who have forged documents; etc. What happens today is that Mr. A goes to Bank E, commits fraud, then runs to Bank F and because there is no way of tying all these activities across, we found out that there are quite a lot of losses related to these individuals from one Bank to another. BVN removes these losses. The beauty of it all is the unique identification in the financial space.

    Generally, people say every Nigerian is a crook but in actual sense, maybe only one per cent of Nigerians are crooks but the remaining 99 per cent are considered crooks because of that one per cent. So, BVN allows us, again, to find these individuals and to create that blacklists that other stakeholders in the financial space can have access to. With this, even foreigners through their Banks, may be able to identify fraudsters that have been tracked in the Nigerian Financial space.

    Secondly, the BVN would allow us begin to build retail credit. Today, the Banks have concerns over identification in retail lending, that is why the entire retail consumer lending portfolio is targeted at people with formal employment whose employers can serve as a point of reference. There are however a lot of self-employed people as well as others working in smaller organisations who require this, but do not have access due to the identification issue, as no bank will take the risk of lending to them – considering cases of resignation and eventual run off, how will the Banks get repayment? But with the availability of BVN, these set of individuals will also benefit from Retail Lending as identification and tracking issues will be mitigated.

    The third, which I have already alluded to, is we want to be able to authorise financial transactions down the road, on an Automated Teller Machine (ATM) or a Point of Sales (PoS). You can use your biometric identifier to say ‘Yes, this is me and I am authorising the payment.’ So, those are the three key focus areas that led to the BVN project being conceived and implemented.

    By June 30, every bank customer is expected to have been captured into the system. Will the deadline be extended?

    No. I think we are doing well. Just as most projects, you start slow but as time goes on, it picks up. The number of enrollment doubles every week. So, given the number of BVNs generated so far, I think June 30 is achievable.

    For those that have enrolled when are they likely to receive their BVN card?

    I would encourage customers to talk to their banks so that they can get their BVN card. The BVN cards are being printed and sent to the banks to distribute to the branches where customers have enrolled. You will be sent a Small Messaging System (SMS) and for those that have their emails stipulated, they will be sent email.

    Who bears the cost of producing the BVN cards?

    It has no cost implications to the customer; we are giving them out to the customers for free. The cost is borne by the Bankers’ Committee, which considers the BVN project very important and that is why they have been bearing the entire cost. The cost of the cards, the cost of integration with NIMC and almost everything else that has to do with the BVN is borne by the Bankers’ Committee.

    Is NIBSS not concerned about the rising cases in banks?

    We are very worried and what gets us even more concerned is that as one executes Electronic Transactions, a lot more people are participating in that space and cloud. So, it is easier for the Banks to invest in new technologies to protect themselves. But now, every business person wants to create a website to sell their products and wares and some of them may not have the capacity to invest in technologies to protect themselves. Thus once one of them creates a point of leakage, it affects the whole chain. To curb this, one of the initiatives the Bankers’ Committee is putting in place is the anti-fraud platform that payment transactions are connected to; such that if one has a transaction that is fraudulent, it flags it off immediately.

    It allows us to identify cards that have been reported as fraudulent; it also allows us to do analysis of a particular location or website where fraud is frequently reported for proper monitoring and this initiative is not only for cards. What we are implementing, which is very unique in almost all areas is to centralise handling of cards, electronic payments and PoS. Most of the solutions available elsewhere are mainly for cards but we have to modify it to allow transactions on other electronic payment platforms. It can create patterns and also highlight suspicious transfers and payments.

    Most of these frauds are more or less insider-related and with click of the computer, the money is gone.

    Is there no way to set a limit or threshold on the value of transactions allowed at a particular time? This is part of the area the Anti-Fraud initiative caters for. We agree there must be a limit, either in frequency or value; all transactions going through the Anti-Fraud Systems are tracked such that if it exceeds that frequency or limit, it is flagged.  We are currently building rules now in collaboration with the banks, such that when the system receives transactions that are outside the agreed parameters, this transactions are blocked or flagged and the banks are advised immediately. It is very difficult to say you want to eliminate fraud, but with all these being implemented, it is our expectation that fraud will be highly mitigated.

    What have been your challenges?

    Well, as a banker coming into a processor environment, I think the biggest challenge so far is trying to get the industry to understand what we at NIBSS are trying to do. Unfortunately, those who do not understand our business strategy perceive us as being in competition and that the competition is disruptive because it affects the way they were doing businesses before.  Even for some banks, we are seen as removing what they would have considered as propriety or niche because we try to create a uniform platform for the industry. We are however driven by the Bankers’ Committee. If they say roll out this service, our aim is to go-head with rollout as quickly and as efficiently possible.

    Misunderstanding has been the biggest challenge by far in the industry. Some of my colleagues who are bankers ask: ‘What exactly is NIBSS doing there?’ And for us, the answer is very simple. We are a shared service platform that is supposed to reduce the cost of providing financial services by banks to the public. So, once we reduce that cost for the banks, they are in a position to pass this, in either pricing or better quality service to their customers.

    A lot of noise was made by the shared services on reducing cost in the system, why is it that there is no more emphasis on it?

    This is actually ongoing. The Central Bank earlier reviewed bank charges downward and has recently also reduced the Merchants Service Charge (MSC) on PoS transactions from 1.25 per cent (of transaction value, pegged at N2,000) to 0.75 per cent. Every year, there have been reductions in charges that are being implemented in various ways. As NIBSS, we are constantly reviewing our service charge. Then, there is the other side of improved services. Unlike what obtained two years ago, if everybody wants to make a payment now, you either use NIBSS Instant Payments (NIP) or NIBSS Electronic Funds Transfer (NEFT). A lot of individuals are not aware that this is a significant benefit. There are very few countries that have similar platforms. In the past, it would take you up to a week before the beneficiary receives value, but with these platforms, value is received in seconds or hours depending on which of the platforms used. So, this is efficiency and it is part of the things that we provide for the industry. But people don’t qualify it because they don’t see it exactly that way.

    Why is it that merchants hide their PoS and they don’t ask you to use it until you demand for it?

    There are cultural issues with anything you are trying to do nationwide, across boundaries, across regions and across communities. There are always cultural issues. When we started this journey with PoS three years ago, the major problem was network and a lot of efforts were made – working with the network operators to stabilise the network. The essential problem we are contending with now is more of a cultural issue; let us use the petrol stations for instance. A customer will not be offered a PoS terminal for payment unless you ask and insist on it; this is because when one buys fuel, first; they encourage you to fill up, and the total amount will always be rounded up; secondly, they never have balance to give you back if you need to collect balance from the amount you are required to pay after your tank has been filled. So, who gets the balance? It is the attendant? But with electronic payment, you will be paying the exact amount utilised. When you sum up all these balances in the range of N5 or N10, it becomes significant daily for the attendant. As such, naturally, the attendant will be reluctant about offering a PoS for payment.

    How do you hope to change the apathy towards PoS usage?

    As part of the activities to enhance this culture change and increase adoption, we are currently working with the CBN and the Commercial Banks to provide the Electronic Payment Incentive Scheme (EPIS) for Sales Personnel, Merchants and Cardholders. The Component of the scheme targeted at the Sales personnel/attendant is called the ‘Tipping Point’. This component is such that whenever payments are made on PoS, the sales personnel/attendant collects points which they can redeem for a certain reward. It makes them understand that even though they do not collect the little balance (change) from their customers, if they encourage eectronic transactions, they would still be able to get some reward. Part of the loyalty scheme is also targeted at encouraging all cardholders that use their cards to make payments so that by insisting on using your card for payments, you get some of your cashback and you can also collect points that you can redeem for a reward. In addition to this benefit, for every electronic based transaction paid for from your account, it is COT free. So, these are some of the initiatives that are going on quietly behind the scene, which we would unveil very shortly.

    What is the volume of transactions that pass through your platforms?

    Transaction volumes are growing consistently month-on-month; this shows that adoption and confidence level are on the rise. We have actually commenced publishing transaction values and volumes on our website (www.nibss-plc.com.ng) and we would be publishing more for the public to see. The only platform that has not seen significant growth is ‘cheque’ and that is not strange as more people are rapidly migrating to the Electronic Funds Transfer platforms as well as other e-channels due to the convenience and speed experienced. So, I can tell you we have seen tremendous growth in the past years.

    What other innovations is NIBSS initiating in line with electronic payments system in Nigeria?

    The answer is whatever innovation the banks want us to implement we would definitely put in place. Our intention is to make the mobile money platform a lot more efficient and seamless in the country. In view of this, we are currently working closely with the Mobile Money Operators to make it possible and easier for customers to make payments with their phones when purchases are made just the way you use your cards. That will encourage the usage of your phones to do transactions because we believe that mobile is key, especially for financial inclusion. In addition, we have commenced regular sessions with software developers, encouraging indigenous innovative ideas and application development that can run on these platforms, thereby encouraging them to increase their scope and do more in terms of employment as we firmly believe that technology is one of the new frontiers for economic growth. As a purely Nigerian company for Local markets, we encourage the local companies to be partakers and be involved in the payment industry.

    There seems to be some kind of rivalry between banks and mobile money operators over  who should drive financial  inclusion. What is your take on this?

    I don’t agree with you. I don’t think there is rivalry. Some mobile money operators have some misconceptions about their licences. We have situations where some of them believe they got a Banking Licence. Yes, it is possible to get a Financial Services Licence but Mobile Money Licenceis not a Banking Licence. In essence, they are a transaction company. Customers have the balance with the bank but we are creating a platform for Mobile phone users to transact on it through Mobile Money. Due to the initial low cost of securing the licence, some people rushed into it without understanding that it is a retail business and retail businesses have longer gestational period. We have situations where many of them were not adequately capitalised. For that reason, you find entities searching for quick wins – rather than go to the rural areas where this was intended for they commenced doing business in the cities, where they believe there are millions of people, half of who already have basic understanding of the technology and most of who already have smart phones which will translate into quick business for them. Unfortunately for them, these people already have relationships with banks.

    So, why did you initiate the mobile money option?

    The objective was to encourage the unbanked to come into the financial space, and enjoy the benefits of financial services (such as micro credit, micro loans, online selling and buying/payments, etc) using wallets; not the same customers that the Banks are targeting who already have Bank accounts and who are using their phones and applications already provided by the Banks. That is why it appears there is rivalry between banks and mobile operators.

    So, we sincerely hope that with the collaboration in creating Shared Agency Network, it would be easier for instance for me to go to the rural areas, create one Agent Network then all other Mobile Money Operators can connect to that Agent and I would get paid because if other Mobile Money Operators are not allowed to connect to that Agent platform, there will never be enough business for the Agent to begin to see the profit.

    Some of these new initiatives are being built to improve the industry; we all basically encourage the Mobile Money Operators to create a niche for themselves, otherwise it most likely will remain a big issue in the industry.

     

     

  • BVN ’ll improve loan access, says NIBSS chief

    The Bank Verification Number (BVN) will facilitate financial stability, Nigeria Interbank Settlement System (NIBSS) Managing Director Mr. Ade Shonubi has said.

    He said once banks could identify and blacklist fraudulent customers through BVN, they would be encouraged to give loans to credit worthy customers.

    BVN, he said, is an initiative aimed at protecting customers and strengthening domestic banking.

    Shonubi noted that apart from the challenge of identifying customers, a major hindrance to retail credit was the perception that most Nigerians would always look for ways of failing to repay loans. BVN, he added, would address this problem by identifying and distinguishing between fraudulent and honest citizens.

    He said: “When the BVN project came up, there were three key things. First and most important of all is for us to identify our customers and to identify them uniquely across banks and across accounts. So, once you have BVN, even if you have 10 bank accounts, it is the same BVN that will be tied to the bank accounts. Now, relating to identifying is the possibility of banks blacklisting people who have committed financial infractions. It could be fraudsters; it could be people who have gone to forge documents because what happens today is that the same guy will go to a bank, commit fraud, then run to another bank because there is no way of tying all these activities across. So, we found out that there were quite a lot of losses related to these individuals from one bank to another.”

    Consequently, he said BVN will allow lenders to start building retail credit.  “This is because a concern for bank is, if I lend you money now and you go away, how do I identify you? So, you find that the entire retail consumer lending is to people with formal employment, that is why you see everybody running to the oil companies to say ‘let’s give your staff car loan; let’s give your staff consumer loan; let’s give your staff TV loans.’ But there are a lot of self-employed people working in smaller organisations, who should also benefit. “Nobody wants to take the risk on them because if they resign today and run away, how are you going to get your money? Once they have bank accounts, the BVN allows us to identify them.”

    The BVN involves the registration of customers in the financial system using biometric technology making accounts more secure by using unique identifiers such as fingerprints.

    As part of efforts to encourage enrolment on the BVN, the CBN directed banks to only honour transactions over N100 million from customers with BVN from March this year. Such transactions according to the apex bank, include but not limited to, money transfers, loans, and contingencies, among others.

    The regulator also urged all bank customers to register for their BVN by June this year, warning that any customer without a BVN would be deemed to have inadequate know-your-customers (KYC) by that date.

    Analysts have also described the BVN as a ‘silver-bullet solution’ to many of the challenges in the banking industry. The BVN is a unique identifier for each bank customer across the financial industry, making it possible to build and track customer financial history and activity. This will allow banks’ access to more reliable information that could inform decisions on customer loan and credit applications and other complex transactions.

     

     

     

    The initiative, which was launched on February 14 2014, will also encourage financial inclusion as those who have typically stayed away from mainstream banking due to low literacy levels will be able to open and access their bank accounts using their biometric information rather than traditional identification methods.

    The NIBSS, which is owned by the CBN and all licensed banks in the country provides the infrastructure for automated processing of data, such as customers’ biometric information, settlement of payments and fund transfer instructions between banks, discount houses and card companies in Nigeria.

     

  • ‘BVN boosts retail credit’

    ‘BVN boosts retail credit’

    The Bank Verification Number (BVN) policy is expected to boost retail credit in the banking industry, the Managing Director of the Nigeria Interbank Settlement System (NIBSS), Mr. Ade Shonubi, has said.

    The NIBSS boss, who is responsible for the implementation of the BVN, in a statement, explained that once banks are able to identify and blacklist fraudulent customers, they would be encouraged to extend loans to those customers that are credit worthy and do not have any record of being delinquent borrowers.

    He said the BVN protects bank customers and strengthen the banking system. Shonubi noted that apart from the challenge of identifying customers, a major hindrance to retail credit in the Nigerian environment was the perception that most Nigerians are crooks who would look for ways of failing to repay loans.

     He pointed out that the BVN would address this problem by helping to identify and distinguishing fraudulent Nigerians from law abiding and honest citizens.

    He said :”When the BVN project came up, there were three key things. First and most important of all is for us to identify our customers and to identify them uniquely across banks and across accounts. So, once you have BVN, even if you have 10 bank accounts, it is the same BVN that will be tied to the bank accounts. Now, relating to identifying is the possibility of banks blacklisting people who have committed financial infractions. It could be fraudsters; it could be people who have gone to forge documents because what happens today is that the same guy will go to a bank, commits fraud, then runs to another bank and because there is no way of tying all these activities across. So, we found out that there were quite a lot of losses related to these individuals from one bank to another.

     

  • E-PPAN alerts of fraudsters using BVN

    E-PPAN alerts of fraudsters using BVN

    Electronic Payments Providers Association of Nigeria (E-PPAN) has warned customers to be wary of fraudsters pretending to be carrying out Biometric Numebr Verification (BVN) registration to access details of customers’ bank accounts.

    Its Executive Secretary/Chief Executive Officer, Mrs Regha Onajite urged bank customers to do their BVN with their banks, warning that unscrupulous elements are hiding under the guise of the exercise to defraud customers.

    Mrs. Onajite, who spoke in Lagos during an interactive session with reporters, said: “One thing they (fraudsters) use to catch their unsuspecting victims currently is the ongoing Bank Verification Numbers (BNV) registration. Everybody is supposed to do the BVN and I urge Nigerians to go and do this exercise with their banks. It only takes few minutes to complete the process.

    “No bank will send you an email to go online to put in your details all in the name of registering for your BVN. So we must be very careful about giving information out.”

    E-PPAN is particularly worried that as the Easter festivities gather momentum, bank customers are more likely going to use these alternative channels to either withdraw or make payments. It has therefore offered tips to customers so that they will not be defrauded by cyber crooks.

    She said banking customers should not be carried away by ongoing general elections and Easter celebrations from taking proper protection of their personal sensitive data connected to their financial activities.

    She said:  “This is the period of election and there is a lot of anxiety. We are trying to change to a new administration or retain the existing one and because we are anxious about our political future, a lot of people may ignorantly open the flanks of their financial security.

    “We should always be on the alert because the fraudsters are always on the prowl. Because fraud happens when there is a state of less security, you be on your guard; protect yourselves, personal details because once you are able to protect our personal details, it reduces your chances of being defrauded by 50 per cent and even by 80 per cent.

    “So, the other 20 per cent would be handled by the financial institutions through different measures they have put in place to ensure that their customers are safe. Electronic payments come with a lot of convenience. Speed is one of them.

    “It, therefore, means that if somebody is about to get your details or cards and access your channels of payment, the person will also be able to conveniently and speedily steal your money.”

    She urged customers to be couscous of the increasing wave of phishing. “You need to protect yourself always. Do not open unsolicited emails; do not respond to them, don’t feel your information online as this may be phishing, and you may leak your personal financial details in the process”

    She said with electronic payments, a lot of banking customers have got increased financial security since they carry less cash and rely more on electronic platforms for their transactions, warning that during festive periods, cyber crimes always peak because people like to buy things online and do fund transfers to friends, parents and relatives.