Nigerians will going forward, pay for both inter-city and intra-city transportation electronically, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has said.
Emefiele, who made this known at the inauguration of the Payment System Vision 2020 (PSV2020) in Lagos, said the new shift is in line with his determination resolve to reduce the use of cash not only in transportation but across other segments of the economy including salaries payment in government agencies.
He said a pilot implementation will soon be organised with various transportation companies. “I am aware that a lot of traction has been gained on this initiative, on air transportation, but a lot still remains to be done on such other means as land, water and rail,” he said.
Emefiele also restructured the Payment Systems Strategy Board (PSSB) to replace the National Payment Systems Council (NPSC). The PSSB will be the pinnacle organisation for the governance, management and operation of the Nigerian Payment Systems and will in line with global best practices, provide strategic direction for the National Payments System in the country.
Aside transportation, he said the CBN is also developing electronic payment methods that would support the agriculture value chain and develop a cashless model for Smart Cities. The focus, he said, will be on both existing cities and “greenfield cities”, to ensure that less cash is used as a means of payment (retail outlets, and food).
The CBN boss also hinted that going forward, end-to-end electronic channels will be adopted for all forms of salaries, pensions, suppliers, individual & business taxes payment and collection of revenues by private and public sector organisations.
“There will also be a collaboration with key pilot hotels and other key entertainment venues such as restaurants, cinemas, sports centres to promote the ‘cashless initiative’,” he said.
Emefiele said plans are ongoing to design and develop an electronic fund transfer system which utilizes multiple channels in processing electronic payments that supports the educational ecosystem with components such as grants, scholarships, consultancy services, Internally Generated Revenue (IGR), tuition and administrative fees.
On the health sector, the CBN boss said the regulator will provide solutions that support the provision of personal and medical information and payments for health and medical services. He called for increased usage of bill payments programmes across suitable industry segments such as insurance, pensions, telecommunications, Cable TV and utilities.
The CBN boss also instituted Working Groups and Governance Scheme Boards to help the new initiatives work. He said the West African Monetary Zone (WAMZ) Special Interest Working Group, has been engaged to ensure consistency between domestic and WAMZ payment initiatives; the Legal Special Interest Working Group meant to promote the appropriate legal framework for payment systems; Information Security and Risk Management Special Interest Working Group which will develop and implement Information Security & Risk Management Framework for the payments system.
Equally, the Public Awareness Special Interest Working Group is to act as a respected spokesperson for the payments industry, on behalf of the CBN and industry participants while the Securities Settlement Working Group will create ‘best-practice’ solution for securities market-side and investor-side clearing and settlement.
Emefiele said that under the previous PSV2020 plan, the management of the payment systems and reporting structure was that of the Infrastructure and the Initiative Working Groups, reporting to the Payment Infrastructure and Strategy Committee (PISC). The CBN boss said that the implementation of the new structure will result in a significant increase in participant’s engagement in the development and operation of the payments schemes.
He said the selection and appointment into the various boards and initiative working group was done after extensive deliberations/consideration of the importance and the role played by the individuals or the organizations they represent.
He said the new policy shift will facilitate economic activities, by providing safe and efficient mechanisms for making and receiving payments with minimum risks to the CBN, payment service providers and end users.
Emefiele said the project will also make payment platforms available to all sectors and geographies, banked and unbanked, and conforming to internationally accepted regulatory, technical and operational standards.
He said the PSV2020, was created to make the Payments System ‘Nationally Utilised and Internationally Recognised’. “It is gratifying to note that our country is acknowledged as a major economic force within Africa, but also increasingly becoming an active player in the global economy. To participate actively, our payments system must be successfully benchmarked against the global best practices, as in most developed nations of the world. We have made some significant achievements so far in this journey, but a lot still remains to be done,” he said.
The Board, he said, shall be chaired by the Governor of the Central Bank of Nigeria. It has the Honourable Minister of the Ministry of Communication Technology; the Accountant General of the Federation; the four Deputy Governors of the Central Bank of Nigeria; the Chairmen of the four Payment Scheme Boards among others as members.
“The PSV2020 initiatives were intended to benchmark the existing core payments infrastructures in Nigeria against international best practices. The primary reference point was the Core Principles produced by the then Committee on Payment and Settlement Systems (CPSS) of the Bank for International Settlements (BIS),” he said.
He however said that through the implementation of the original PSV2020 initiatives by the CBN, in association with the banking community, the country has witnessed an impressive growth of electronic payments and a shift from the overwhelming dominance of cash as a means of payment.
He said that the implementation of Nigeria the Uniform Bank Account Number (NUBAN), deployment of a new RTGS that is built on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging standards, introduction of the cash-less policy, deployment of the Scripless Securities Settlement System (SSSS), introduction of Cheque Truncation, reduction of clearing cycles for ACH payments &cheque from three days (T+2) to next day (T+1) and settings of limits on encashment of third party cheques and a maximum cap of N10 million for cheque payments, to encourage the use of electronic payments channels a among others are some of the achievements recorded in implanting the cash-less policy.
Emefiele said despite these feats, there is need for more work. He described the PSV2020 as a product of a detailed assessment of the Nigerian Payments infrastructure adding that the CBN had demonstrated over the years to be a strong catalyst for the adoption of electronic payments in the country.
