The Nation Newspaper

Tag: cash-less

  • Cash-less: CBN, banks move to increase financial access points

    The cash-less banking policy entered its second phase on July 1, with the inclusion of the Federal Capital Territory, Abia, Anambra, Kano, Ogun and Rivers states. The Central Bank of Nigeria (CBN) and some commercial banks are taking steps to deepen financial penetration in the country.

    The objectives of the policy, which is in operational in Lagos, includes reduction in the level of physical cash in circulation, reduction in the huge cost associated with cash handling, thereby saving at least 30 per cent of banks’ operating costs.

    This regulation is expected to encourage the use of electronic and cheque payments for goods and services as the alternative to cash payments. Individual account holders will have a daily cash withdrawal and deposit limit of N500,000. Also, corporate account holders will have a daily cash withdrawal and deposit limit of N3million, while cash evacuation and cash-in-transit services will no longer be available to customers.

    Banks have also commenced product development to ensure that the policy succeeds. FirstBank Nigeria, First City Monument Bank, United Bank for Africa, Access Bank, Guaranty Trust Bank, Wema Bank and Diamond Bank, among others, have developed tested and viable products/services tailored towards effective management of cashless banking.

    FirstBank has rolled out e-payment platforms to provide alternative to its customers. The bank’s FirstPayLink is a consolidated Internet payment gateway that integrates various payment platforms to merchants’ websites. It allows internet payments using InterSwitch, eTranzact, Visa and MasterCard cards, thereby giving them the flexibility to operate online sales.

    “FirstPayLink is integrated into a merchant’s existing website after successful sign-up. Payments are made using InterSwitch, eTranzact, Visa and MasterCard, even as merchants are settled promptly for all payments made through the platform,” the bank’s Head, Marketing and Corporate Communications, Mrs. Folake Ani-Mumuney, said in a statement.

    She explained that the bank accepts payments for goods and services via merchants website adding that every successful payment receives an electronic receipt with a unique reference number. Also, buyers can choose from a wide range of payment processors including Verve, Visa, MasterCard and eTranzact. The target markets are SMEs, insurance companies, religious Institutions, educational Institutions, professional bodies, customers with online stores among others.

    The bank also has introduced FirstCollect which is a collection platform that gives customers the ability to monitor collections at the comfort of their offices online real time. FirstCollect is FirstBank’s e-Collection platform that is customizable and enables corporates receive payments for goods and services through FirstBank branches nationwide as well as other alternative channels like web and Point of Sale (PoS).

    She explained that corporate organisations can monitor payments from the comforts of their office and homes, and it can be integrated to their internal business application. “The product is an online-real time monitoring of payments by corporate organizations. It has comprehensive and customizable reports, customisable input data fields, uniform capture of payment details by all bank tellers to aid account reconciliation, instant email/SMS notification on payments received and integration with organizations’ core business application,” she said.

    She said that customers can pay through the bank branches, ATMs PoS, web and mobile devices. The product, she said, helps to increase organisations sales collection channels, improve service delivery to their clients, distributors and dealers even as the bank’s branches serve as payment points for the client.

    “The target markets are manufacturers with large distributor chain, government institutions for revenue collection, companies that do lots of sales, Fast Moving Consumer Principals’ among others,” Mrs Ani-Mumuney said.

    According to her, some corporate organisations have limitations with salary payments, payment to vendors and beneficiaries. Such firms want platforms that are fast, not bound by locations and are work-flow driven. This, she said prompted the bank to introduce FirstPay, a work-flow driven automated payment solution that enables corporate customers initiate payment instructions electronically from any internet-enabled computer to beneficiaries in any bank in Nigeria.

    The solution, she said also has direct debit functionality suitable for the collection of insurance premiums, utility bills and distributorship schemes. It is a proven, robust and secure end-to-end e-payment and collection solution.

    Some of the features include that it is web-based, Personal Identification Number/Token enabled, inter-bank transactions (debit/credit) possible and multiple security levels. She listed some of the benefits as instant payments to beneficiary accounts, secure with multiple factor authentication, it is available 24/7 and is simple and convenient. It can be used for collections using the direct debit functionality. The target markets are insurance companies, government Ministries Departments and Agencies (MDAs), corporate organisations, professional bodies, educational Institutions among others.

    CBN

     

    CBN Governor, Sanusi Lamido Sanusi, said the apex bank is taking steps to ensure that motor parks, new Automated Teller Machine (ATM) points, and rural areas are covered. He said the policy is designed to reduce the cost of handling cash, which is eating into bank’s profits and liquidity. He estimated that banks spent N192 billion in 2012 on cash handling, noting that this would be passed on to customers in terms of fees and interest charges.

    “The target is getting the cost reduced by 30 per cent in three years through enforcement of four-pronged initiatives, namely reduction in cash management cost, enhanced electronic payment system, Information Technology and centralised back-office systems,” he said.

     

    Agent banking

     

    The CBN has said it will be taking a second look at the Agent Banking Guidelines it issued months back. Speaking on Monday at the launch of the Geospatial mapping of Financial Institutions in Nigeria in conjunction with the Bill and Melinda Gates Foundation (BMGF), Sanusi said it is important to review the guidelines because of initial challenges the banking practice is facing.

    He said many of the prospective operators are confused over the guidelines and there is need to review it to make all aspects of the guidelines clearer. He said part of the new rule will be an automatic licence for commercial banks and microfinance banks.

    According to the CBN, the agent banking guideline is in line with the powers conferred on the banking watchdog by Section 2 (d) of the CBN Act, 2007 and Section 57 (2) of the Banks and Other Financial Institutions Act (BOFIA), Laws of the Federation of Nigeria, 2004.

    The statute empowers the CBN to issue guidelines for the maintenance of adequate and reasonable financial services to the public. The objective of agent banking, it said, is to provide minimum standards and requirements for agent banking operations, enhance financial inclusion and provide for agent banking as a delivery channel for offering banking services in a cost effective manner.

    Agent banking is the provision of financial services to customers by a third party (agent) on behalf of a licensed deposit taking financial institution and/or mobile money operator (principal).

    The agent banks are expected to receive cash deposit and withdrawal, carry out bills payment (utilities, taxes, tenement rates, subscription etc.), payment of salaries, funds transfer services (local money value transfer), balance enquiry, generation and issuance of mini statement, collection and submission of account opening and other related documentation among others.

     

    Financial Inclusion

     

    The CBN Governor has also emphasised the need for stakeholders’ support in its drive to achieving targets set in the Nigerian Financial Inclusion Strategy (NFIS).

    He said the target outlined in the NFIS strategy is the reduction of the number of adults excluded from access to financial services from 46.3 per cent in 2010 to 20 per cent in 2020. As a member of the Alliance for Financial Inclusion (AFI), he said Nigeria’s declaration was in line with the Maya declaration in 2011.

    According to him, it is targeted that at least 70 per cent of the proposed 80 per cent adult Nigerians to be financially included, would be in the formal sector, with specific targets for services such as payments, savings, credit, insurance and pensions. To achieve this however, he said there must be collaboration among all the stakeholders in the financial industry.

    Sanus said the CBN had since approved a number of initiatives aimed at improving financial inclusion. He listed some of these initiatives to include the development of Agent Banking Guidelines, tiered Know-Your-Customer (KYC) requirements to encourage Financial Institutions to reach out to under-served segments, the development of a Consumer Protection Framework under a newly set up Consumer Protection Department and a National campaign to promote Financial Literacy.

    He traced the partnership between the CBN and the BMGF to the Alliance for Financial Inclusion (AFI) Global Policy Forum in 2012, where the Foundation pledged to support the CBN to achieve the targets set out in the NFIS.

    “The BMGF identified certain areas for collaboration with the CBN based on their assessment of Nigeria’s needs with respect to Financial Inclusion as well as the capacity of their partners. These areas include; Geo-Spatial Mapping, Capacity building initiatives for the Shared Services Office (which drives the Shared Services initiatives including the Cashless Nigeria Policy) and Capacity building Support for the Financial Inclusion Secretariat (which would drive the implementation of the NFIS),” Sanusi said.

    Sanusi said the bank was excited to be partnering with the Bill and Melinda Gates Foundation on the project, which he noted will act as a catalyst in the realisation of the targets outlined in Nigeria’s National Financial Inclusion Strategy.

     

    NIBSS

     

    The Nigeria Inter-Bank Settlement System (NIBSS) said the vision of Nigeria to be among the top 20 economies in the world providing efficient e-payment services by 2020, will be achieved. Its Executive Director, Business Development, Chritabel Onyejekwe, said the cash-less banking initiative has recorded huge success and has been able to drastically reduce banks’ operational costs significantly.

    She said NIBSS in collaboration with the CBN, banks and other international partners are committed to the journey of transformation for the e-payment industry via cash-less economy. He said all the parties agree that a lot of work needs to be done at the grassroots. She said, SIBS International, a Portuguese firm has been supporting NIBSS in achieving the cash-less objective.

     

    Offshore support

     

    SIBS International, a Portuguese firm has begun technology transfer to the NIBSS in a step aimed at promoting cash-less banking initiative in the country.

    Managing Director, SIBS International, Pedro Hipolito said the firm which does $6 billion transactions annually in Portugal alone is committed to expanding its operations in Nigeria to enable banks and other financial institutions fully integrate their processes into the e-payment system.

    He said the firm has already entered into partnership with many of the local banks to strengthen their Information Technology operations to enable them achieve a seamless e-payment operations.

     

     

     

     

     

    He said the firm has been working in Nigeria to improve its payment system since the last three years, and has also supported the CBN moderated cash-less banking initiative. “We have been collaborating with NIBSS and CBN on the cash-less banking initiative,” he said.

    Hipolito said Nigeria is making progress on e-payment: “Recall that we started this programme actually in January last year and we are only just continuing. We are only just moving to phase two, so we have learnt all the ropes in phase one in cash-less Lagos and we believe we are ready to roll out to other six locations in Nigeria.

    Mobile money

    The CBN is implementing a bank-led model of mobile money which requires that a bank deploys mobile payment applications or devices to customers and ensures merchants have the required point-of-sale (PoS) acceptance capability to carry out the transaction.

    Here, mobile network operators’ network merely serves as vehicle through which transactions take place. The model was based on the regulatory framework for mobile payment services issued by the CBN in 2009, which disenfranchised telcos from operating mobile money except through strategic partnerships with licensed operators.

    The Telcos, have consistently advised the CBN to allow them participate in the regulation of the subsector, but nothing has come out of the demand. The apex bank, which solely regulates the business, has given the Telcos little or no opportunity for control. This model has deprived the business the needed technological and infrastructural backing critical to its success.

     

  • CBN’s cash-less policy begins in six states today

    CBN’s cash-less policy begins in six states today

    The moderated cash-less policy of the Central Bank of Nigeria (CBN) begins today in the Federal Capital Territory (Abuja), Abia, Anambra, Kano, Ogun and Rivers states.

    Ahead of today’s take-off of the policy, several commercial banks have, through emails, text messages and formal letters, been sensitising their customers on the need to embrace the alternative payment options.

    The policy, which was hitherto operational in Lagos State, is aimed at promoting the use of electronic-based transactions instead of cash for the payments for goods, services, transfers, among other services. The implementation of the “Cash-less Lagos”, as it is known, began on January 1, last year. It recorded improvements in the use of Point of Sale (PoS), Automated Teller Machines (ATMs) and other e-payment tools.

    The service charges/fees did not apply until March 30, last year, to give people time to migrate to electronic channels and experience the infrastructure that has been put in place.

    The CBN Deputy Governor, Operations, Mr Tunde Lemo said the policy is expected to drive development and modernise Nigeria’s payment system in these states.

  • Portuguese firm eyes cash-less market

    In furtherance of cash-less banking, a Portuguese firm, SIBS International, has begun technology transfer to the Nigeria Inter-Bank Settlement System (NIBSS).

    The firm’s Managing Director, Pedro Hipolito, said with transactions worth $6 billion yearly in Portugal, SIBS is committed to expanding its operations in Nigeria to enable banks and other financial institutions to fully integrate their processes into the e-payment system.

    The firm, he said, was in partnership with many of the local banks to strengthen their Information Technology (IT) operations to enable them to achieve a seamless e-payment operations.

    His firm, he said, had been working in Nigeria to improve its payment system since the last three years, expressing support for the Central Bank of Nigeria (CBN) moderated cashless banking.

    “We have been collaborating with NIBSS and CBN on the cash-less banking initiative,” he said.

    Nigeria, he said, was making progress on e-payment, noting that connectivity remains a big challenge to cash-less as far as Point of Service (PoS) is concerned. He said although there were over 150,000 PoS in Lagos, it is not all about number but workability of the platforms.

    There was need, he said, to ensure that Automated Teller Machines (ATMs) and PoS were in good conditions, because this would help in building confidence in e-payment in the country. He said his firm was working on bringing in ATMs that are multifunctional, with ability to receive tax remittances and biometrics that can cater for the blind within the population among other roles. He said such improved services would make life easier for the people.

    Hipolito said though ATMs were developed as just cash dispensers, they have evolved into many other bank-related functions. In some countries, especially those, which benefit from a fully integrated cross-bank ATM network, ATMs include many functions, which are not directly related to the management of one’s own bank account.

    These include deposit currency recognition, acceptance, recycling, paying routine bills, fees, and taxes, printing bank statements, pre-paid cell phone/mobile phone credit among others. He said that his firm is committed to ensuring that Nigerians get the full benefits associated with ATMs usage.

     

  • Cash-less: CBN to reduce number of cheques

    The Central Bank of Nigeria (CBN) plans to reduce the number of cheques to strengthen cash-less initiatives billed to start early next month, The Nation has learnt. Sources close to the apex bank said strategies have been put in place to reduce the number of cheques to encourage the use of Point of Sales (PoS), among other channels, to drive the cash-less initiative.

    The cash-less policy, whose implementation began in Lagos in January, last year, is aimed at reducing the dominance of cash in the system. The initiative specifies penal charges for individuals and corporate organisations that want to withdraw or lodge cash above prescribed limits.

    Under the policy, the CBN pegged the daily cumulative cash withdrawal or deposit limit for individual accounts at N150, 000 per day and N3 million per day for corporate accounts

    It was gathered that the banking watchdog was considering reviewing the activities of the security printing firms to reduce the volume of cheques in the country.

    A Director of Third Security Printing Company, Mr Jamiu Ekungba, said the decision of the CBN to de-register 12 foreign-based security printing firms recently was to promoted the cash-less policy.

    He said: “CBN said it wants to domesticate the printing of cheques, hence the decision to axe the firms. There is nothing Nigerian or domestic on the issue because the inks, paper and technology used in printing cheques are still imported. Rather, CBN was trying to reduce interface in the banking halls and further promote the cashless policy.”

    He said the United Kingdom-based outfit was one of the security firms licensed by the CBN to print cheques for the banks until recently.

    “The CBN de-registered the companies because it is not leaving anybody in doubt about the issue of the cash-less. In the next few years, the number of cheques that are going to be used for transactions will come down because the cash-less initiative is paramount to CBN,” he added.

     

  • Visa backs cash-less policy

    Visa backs cash-less policy

    Visa, a global electronic payments company, has called for an improved use of e-payment productsby entrepreneurs within and outside the country.

    Speaking at the BT Africa West Africa Expo and Conference in Lagos, Country Manager for Visa West Africa, Ade Ashaye, said the firm was committed to helping the country achieve its cash-less banking initiative. “Visa is committed to helping move Nigeria to a cash-less economy and share some of the benefits of secure electronic payments within the industry.”

    The conference was hosted in association with Future Group’s Business Traveller Africa.

    He said Nigeria is growing as a destination for both leisure and business travel, adding that rise in spending is a credit to the efforts of those promoting Nigeria as a tourist destination.

    According to VisaVue Travel data, Nigeria’s top three source markets of spend on Visa cards were the United Kingdom, United States and South Africa. Visa cardholders from these three markets account for 60.1 per cent of total spending by international Visa cardholders in Nigeria.

    ”What was great to see was the various players in West African business travel coming together under one roof, debating the issues, looking for solutions and engaging with existing and potential clients,” said Dylan Rogers, of Business Traveler Africa.

     

  • CBN promises hitch-free cash-less banking in Rivers, Abuja, others

    CBN promises hitch-free cash-less banking in Rivers, Abuja, others

    The Central Bank of Nigeria (CBN) is working towards making the introduction of cash-less banking in five states and the Federal Capital Territory (FCT) on July 1, hitch-free, its spokesman, Ugochukwu Okoroafor, has said.

    The states are Rivers, Kano, Anambra, Ogun and Abia.

    Speaking with The Nation, Okoroafor said with the Lagos experience, the roll out in those states would be successful. He said more publicity and Point of Sales (PoS) terminals would be deployed when the project takes off in those states.

    Okoroafor said: “Part of the arrangements made so far include; increasing the number  of Point of Sale (PoS) terminals in these states, making enough publicity to create awareness and the need to embrace the cash-less idea, among others. We have learnt our lessons and we do not want a repeat of what happened in Lagos when cashless was introduced early last year. I can say that we are ready for the take off of cash-less project in the seven states.”

    According to him, problems that marred the exercise in Lagos have been outlined, discussed and solutions adopted to make cash-less successful.

    CBN, he said, was working with banks on the deployment of PoS terminals, adding that wide consultation is going on to ensure prompt and adequate delivery.

    “The banks have the responsibilities to deploy PoS terminals, hence the decision of the CBN to involve them strongly in the exercise. We are seriously working with them on the issue. Also, CBN, banks and the Bankers’ Committee are putting in place measures to create enough awareness by way of educating people via various channels before and after July this year.”

    The Chairman, National Electronic Fraud Forum (NeFF), Mr Emmanuel Obaigbona, said the body was ready to ensure the success of electronic payment transactions.

    Obaigbona said  NeFF was charged with educating and informing banks on various electronic fraud issues and trends; proactive sharing of fraud data/information among stakeholders to ensure prompt responses and limit losses and formulation of cohesive and effective risk management strategies.

    The cash-less policy, whose implementation began in Lagos in January, last year, is aimed at reducing the dominance of cash in the system. The policy specifies penal charges for individuals and corporate organisations that want to withdraw or lodge cash above prescribed limits.

    Under the policy, the CBN pegged the daily cumulative cash withdrawal or deposit limit for individual accounts at N500,000 per day and N3 million per day for corporate accounts.

     

  • Visa canvasses more cash-less banking for travellers

    Visa canvasses more cash-less banking for travellers

    Visa, the global electronic payments company, has called for an improved use of e-payment products by business travelers both within and outside the country.

    Speaking at the BT Africa West Africa Expo and Conference in Lagos, Country Manager for Visa West Africa, Ade Ashaye, said the firm is committed to helping the country achieve its cash-less banking initiative.

    “Visa is committed to helping move Nigeria to a cashless economy and share some of the benefits of secure electronic payments within the industry.”

    The conference was hosted in association with Future Group’s Business Traveller Africa. He said Nigeria is growing as a destination for both leisure and business travel and rise in spending is a credit to the efforts of those promoting Nigeria as a tourist destination.

    According to VisaVue Travel data, Nigeria’s top three source markets of spend on Visa cards were the United Kingdom, United States and South Africa. Visa cardholders from these three markets account for 60.1 per cent of all total spending by international Visa cardholders in Nigeria.

    “What was great to see was the various players in West African business travel coming together under one roof, debating the issues, looking for solutions and engaging with existing and potential clients,” said Dylan Rogers, of Business Traveller Africa.

     

  • Bankers’ Committee to engage NCC on cash-less policy

    The Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido has said that the Bankers’ Committee is currently working with the Nigerian Communications Commission (NCC) and other service providers to ensure that some of the challenges of cash-less policy are addressed.

    Sanusi said this at the fourth annual investors’ forum organised by Renaissance Capital (RenCap) in Lagos. The CBN governor expressed satisfaction with the level of progress made on the cashless policy.

    “The numbers done in terms of Points of Sale (PoS), Automated Teller Machines (ATMs) are very remarkable. We started last year with 5000 PoS machines, we ended the year with 165,000 PoS machines. Mobile banking for example, in January was doing N4 million per month, by December last year, it went up to N8 billion. It is moving up and we hope it continues,” he added.

    Sanusi stressed that some of the challenges confronted by the policy had to do with telecommunication. He said: “If you want to move data for example, you need more bandwidth. It is not enough to have PoS terminals, or to have ATMs, there is need to expand the bandwidth. There are operational issues, simple things such as: my name is Mohammed Michael in one bank and there is Michael Mohammed in another bank, you will be amazed that you do a transaction on the PoS and you have operational issues because the name doesn’t match. So these are all small things that we discovered. We can say that we are not where we want to be, but definitely we are inching closer and we will get there”.

  • NIBBS laments cash-less slow pace

    The Nigerian Inter-Bank Settlement System (NIBSS) Plc has lamented the slow pace of cash-less policy in Lagos.

    Executive Director, Business Development, NIBSS, Mrs. Christabel Onyejekwe, said efforts must be made to avoid similar problems in other states where the policy would be introduced. These include Rivers, Kaduna and the Federal Capital Territory (FCT).

    She said problems such as poor awareness, among the informal sector, lopsidedness in the programmes of the banking operators, have affected the policy.

    She called for more proactive measures in the implementation of the policy in Nigeria, adding that Nigerians would accept it well in future. She said there are challenges with interoperability of networks from the telecommunications operators, urging stakeholders to tackle those challenges.

     

  • Banks’ customers pick holes in cash-less policy

    Banks’ customers pick holes in cash-less policy

    The Central Bank of Nigeria’s (CBN’s) cash-less policy designed to reduce cash-based transactions is having difficulties in meeting customers’ expectations, The Nation investigation has revealed.

    Many banks’customers have raised issues with the services rendered by their banks in the course of the one year the policy has been in operation in Lagos State. They said the policy is “anything, but efficient at the moment.”

    One of the customers said he was compelled to wait for five days before he could get access to money that was “supposedly wired to his account in his presence.”

    He said: “I went to the bank (name withheld) with a friend who had just sold his car to a buyer for N4million. He insisted that the money be transferred to his account on-line. This was done, and we all witnessed it. The buyer’s account was debited immediately,” he added.

    “On the assumption that his account has similarly been credited (although he had not been alerted), he travelled out of the country. Four days later, the money had not hit his account,” he said. He said it was not until the fifth day that he was eventually credited with the proceeds.

    It was gathered that this has been the experience of many customers who have to wait for days, before they could access the money sent to them through the e-payment platform. Several other customers complained that remittances to their parents for the Christmas and New Year period were never delivered until several days later.

    When confronted, a spokesman for one of the banks, who pleaded that his identity be veiled, blamed the incident, which he admitted is a common occurrence, on equipment,

    Asked to explain why a system that can debit one’s account would be unable to credit another’s, he insisted: “It was a systemic challenge that the industry is grappling with and strenuously striving to resolve. It is not peculiar to this bank alone. It’s an industry issue,” he added.

    The Central Bank of Nigeria’s (CBN’s) spokesman, Ugochukwu Okoroafor, told The Nation there have been teething problems, but they are being overcome. He said the cash-less banking initiative did not exist before and, therefore, there is always time to learn.

    He said there is no system that is free of problems, “but the most important thing is that e-payment has made banking easier for bank customers,” . He assured that the banks have structures in place that make it possible for them to rectify any problems encountered by their customers.

    A customer of one of the first generation banks, Martins Obi, said banks have to ensure that they offer the best of services because such would enhance financial inclusion.

    He said many of the banks were yet to be acquainted with demands of the policy, urging that they make upgrade of their facilities a priority.