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  • NIBBS’ tough stance on Fintechs…what it means for banks

    NIBBS’ tough stance on Fintechs…what it means for banks

    The decision by the Nigeria Inter-bank Settlement System (NIBBS) to disconnect switches, super-agents, and payment solution service providers from  the NIBSS Instant Payment (NIP) has placed fintechs in a disadvantage position in fight for market control, writes Assistant Business Editor, COLLINS NWEZE. 

    Michael Stevens, 30, was leaving home for work when his smartphone beeped with a familiar Facebook message alert. It was a reminder for him to send monthly allowance to his 80-year-old mother living in  Ijebu Ode, Ogun State.

    His wife, Victoria, had reminded him the previous night of the allowance and how badly his mother needed the money to pay her medical bills.

    Two payment options came to his mind. The first was to pay through internet banking platform of a commercial bank. The other two options were to use Quickteller or Paga network.

    Few minutes later, he went for the Quickteller option. Quickteller and Paga are Financial Technology (Fintech) providing mobile money and digital payment services to consumers and are top competitors to banks.

    As little as the N100 fee from the transaction seems, it represents one of the millions of revenue leakages banks are fighting back to reclaim.

    Fintechs, such as Quick-teller, MoniDey, Baxi, PocketMoni, Unified Payments, Paga, Remitta and Cellulant, are now part of the financial system, offering banking services to both the banked and unbanked.

    But that seems to have largely changed last week after  the Nigeria Inter-bank Settlement System (NIBBS) directed that Fintechs be disconnected from its NIBSS Instant Payment (NIP) platform. The NIBSS Instant Payments (NIP) is an account-number based, online-real-time Inter-Bank payment solution developed in the year 2011 by NIBSS.

    In a report titled: Aggregation, Smiling Curve and Why Nigeria Is Disconnecting Many Fintechs from NIBSS’ Instant Payment Outward System’,  Prof. Ndubusi Ekekwe explained what the policy shift means for banks and  Fintechs. 

    He said that Nigerian banking is under stress despite the “huge profits” they declare yearly and a large part of their lending funds are now with Fintechs.

    “Those profits are vapour-profits, powered by mindless fees on customers and FX-anchored arbitrages.  When it comes to real banking, which is interest-anchored banking, Nigerian banking has disappointed.

    “And that disappointment is evident as there is no catalytic project in Nigeria which any bank can come and claim that it funded. In America, banks tell you dams, bridges, etc they financed and challenged Americans to support them so that they can finance the future for shared prosperity and progress,” Ekekwe wrote.

    Other experts said banks are now competing with Fintechs and that retail banking and funds transfer have the highest likelihood of disruption at 92 per cent and 85 per cent respectively. 

    Banks are fighting back Fintech competition by digitally transforming their business model from being a ‘bank’ to being a ‘platform’. 

    The banks, they said, are taking a ‘mobile-first’ approach to reach out to consumers, by designing their products and services with the aim of enhancing customer engagement via mobile.

    Read Also: SEC partners CBN, NIBBS to eliminate fraudulent investment outfits

    The lenders are also doing social lending on Facebook where a large part of the youth population is active. The practice is dislodging Fintechs in that space where they previously used to lend to customers with poor credit scores or those unable to get loans from traditional banks.

    Like Fintechs, banks are prioritising 24/7 access and  offer services available via non-traditional channels such as social media, empowering customers to a great extent. 

    Wema Bank also introduced Alat, a fully digital platform to enable it capture the grassroots customers and the youth. Beyond the savings and investment options, Alat, mostly embraced by young people, offers complementary features that help improve and sustain saving habits.  FirstBank, Fidelity Bank and Union Banks once partnered with PayPal to enhance online payment for shoppers. The partnership enables the lenders’ customers to register for a PayPal account from their internet-banking accounts. 

    By linking their-issued debit, prepaid or credit cards to their new PayPal account, customers can then shop and pay on millions of websites around the world from their personal computers, tablets or smartphones, without having to share financial information with the seller.

  • Sterling named Nigeria’s Most Innovative Bank

    Sterling Bank Plc has won the Innovative Bank of the Year Award at the 2019 edition of the Electronic Payment Incentive Scheme (EPIS) Efficiency Awards organised by the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBBS).

    The CBN EPIS Efficiency Awards, now in its fourth edition is held annually to celebrate financial institutions, merchants and all other stakeholders at the forefront of driving electronic payments in Nigeria.

    Sterling Bank beat all other Nigerian banks in the innovation and platform efficiency categories. The awards were presented by senior officials of CBN and NIBSS at an elaborate event which held at Eko Hotels and Suites, Lagos over the weekend.

    Group Head, Transaction Banking at Sterling Bank Plc, Abidemi Asunmo, said the bank has always been at the forefront of efforts to provide customers with unique electronic payments channels that promote financial inclusion.

    “Understanding each customer while providing bespoke solutions to suit them is at the core of all we do at Sterling Bank and we are delighted to be recognised as the leading innovative bank of the year by the CBN and NIBSS. We will continue to ensure that our customers enjoy the best of services through our various portals including Specta and I-invest, among others.”

    According to NIBSS, the awards are based on objective analysis of all e-payment data collated by NIBSS over a full calendar year in addition to public voting and surveys administered to industry stakeholders for transactions within the year under review.

    Speaking at the awards ceremony, Mrs. Aisha Ahmad, Deputy Governor, CBN, said NIBBS would retain the vision for the future. She advised banks and other merchants to scale up their capacities to innovate as well as enhance capacity to handle large transaction values.

    The Deputy Governor enjoined stakeholders to look at issues of interoperability, cyber security framework, collaboration and shared threats to their security systems.

     

  • Why e-transactions may experience hitches- NIBBS

    Customers may experience hitches in e-transactions, including Point of Sales Machine (POS) and USSD transfer and issues with bank agents.

    Representative of the Nigeria Inter-bank settlement system Plc, NIBBS, Lilian Phido who disclosed this to The Nation over the weekend, assured customers that failed transactions would however be reversed.

    Explaining why customers who paid for goods or  services through the available e-payment platforms  may get their transaction reversed after parting with the goods causing losses to companies should customer fail to notice payment reversal or fails to make another payment or never realises the error.

    Phido refuted the rumor that most companies and customers are skeptical of using the electronic transfers or payments, saying that the volume of usage is increasing by the day.

    “People still use e-banking and we know this for a fact because on a daily basis that the volume is increasing. We have a website where you can see live data about this. You can see what is going on by the day. By minutes, by seconds the volume is growing. On the website, you can see what happened last year and what is going on today. They still use it because, they know that the benefits are endless and outweigh the problems,” she stressed.

    Emphasizing the benefits of the payment platforms, she took this reporter back to the past where she said some years ago, women couldn’t go to the market without carrying cash but today “many of us are comfortable going to the market without cash in our pockets as they have confidence that they can buy and pay either through the USSD platform or the POS machine so it is growing on a daily basis.”

    Speaking on why transactions can fail on the platforms, she said “because it is a machine, one way or the other at some point there might be hitches coming from the machine but that doesn’t mean that people are not using the platform or embracing electronic payments anymore.”

    Concerning failed transactions, she stated that on many occasions the money is almost immediately reversed, adding that the person has to return the goods or make another payment if he or she is honest.

    She emphasised that subsequent transactions done immediately after that may be successful.

    She attributed other cause be from the account holder, or the bank; saying that a machine must experience hitches sometimes.

    She said that the failure can happen to anyone, no matter who it is because the machine does not recognise anyone or give anyone a special transaction.

    Speaking on what the industry is doing to ensure the reduction of these failed transactions, she said every day the industry is putting measures in place to perfect the transactions and find solutions to all issues with the e-transaction in Nigeria. “This is so that we can increases people’s confidence and trust in us.”

    “If I bank with bank A and you bank with bank B and you want to send me money, you initiate the transaction and I get the money, but if during the process there is a hitch, the transaction may not be successful. What we do at NIBBS is to make sure that the transaction is successful. At NIBBS we have put in place modern world-class infrastructures for handling inter-bank payments in order to remove potential bottlenecks associated with inter-bank funds transfer and settlement,” explained Phido.

    Advising people on what to do when their transaction fails, she said the first place to visit is your bank when your transaction fails, stressing that in rural areas or places where you don’t have banks, that you can contact the bank agents present or you reach your bank through social media or placing a call to your account officer.

    She said that why it takes time in most cases to reverse a failed transaction is if the banks are not the same, adding that there are so many fraudulent people, hence the issues have to be well investigated by the other bank before the money is sent back to the person’s account.

    “We are doing everything in our power to curtail fraud that may arise from using this platform. All the industry players including the banks are all doing so much to reduce fraud every day.

    “In the future the story will be more interesting “because five years ago we didn’t know that we could pay for vegetables through e-transaction so five years from now, it will also be different but may be easier and faster.”

  • SEC partners CBN, NIBBS to eliminate fraudulent investment outfits

    SEC partners CBN, NIBBS to eliminate fraudulent investment outfits

    The Securities and Exchange Commission ( SEC ) on Wednesday said that the commission was partnering with other regulatory bodies to get rid of fraudulent investment outfits in the Nigerian capital market to boost investors’ confidence.

    Mr Mounir Gwarzo stated this at the 2017 World Savings Day and Financial Literacy Week held in Lagos.

    Gwarzo said that the commission was working with other regulatory bodies to combat proliferation of fraudulent investment outfit in the nation’s capital market.

    Gwarzo, who was represented by Mr Henry Rowland, Director Investment Services, SEC, stated that the commission was committed to ensure zero tolerance to fraudulent activities in the market.

    “We are partnering with CBN, NIBBS, PENCOM, CSCS and other regulatory bodies to combat the negative effect of fraudulent investment outfit in the market.”

    He, however, stressed the need for prospective investors to seek the help of financial advisers while investing in the capital market to confirm those financial outfits that were registered with the commission.

    According to him, these advisers would help ascertain the true position of any investment outfit before any financial transaction can be carried out.

    On the importance of savings, he said that savings played an important role in determining the one’s future and urged students and youths to embrace savings culture.

    Mrs Oluwatoyin Sanni, the Chairperson, Financial Literacy Committee, called on investors to ensure that the companies they want to buy shares from file returns and records of their performance, profitability and dividend payment on  quarterly basis.

    “Prospective investors must check the quality of board of companies, the directors, the profile of the chairman and other corporate governance issues relating to the firm.

    “Again, check the business model of the company you want to invest in, how does the business plan work, how does the plan translate to profit.

    Look at the past, present and future of the company if the business lines, products and services is relevant in today’s world,” Sanni said.

    NAN

  • 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.

     

  • EFCC, NIBSS, others to fight e-fraud

    The Nigerian Electronic Fraud Forum (NeFF) is partnering with the Economic and Financial Crimes Commission (EFCC), Central Bank of Nigeria (CBN), Nigerian Inter-Bank Settlement System (NIBBS), among others, to check electronic payment frauds and related offences.

    NeFF’s Chairman Mr Emmanuel Obaigbona, told The Nation that the development was borne out of the need to boost confidence in the electronic payment system.

    He said: “We are trying to bring together the tradition of electronic payment system in Nigeria. We are seriously working with the EFFC, NIBBS, CBN, owners of switches, and industrial workers on the issue of checking electronic payment frauds. We are working on how to educate the law enforcement agents, and the judiciary on what e-frauds is all about.“

    According to him, the body has created a lot of awareness on fraud issues to enlighten people on the causes of e-payment frauds.

    “We have tried to let people know some of the likely fraudulent activities, arising from the use of electronic payment channels such as Automated Teller Machines (ATMs), Point of Sale (PoS) terminals, mobile phones, among others. Also, we have taught them how to mitigate such risks to stimulate the growth of the financial system,” he added.

    Obaigbona said the relevant stakeholders were being carried along to check fraud in e-payment transactions.

    He said the anti-fraud committee set up by the CBN to tackle e-payment frauds has been working to proffer solutions to the problems, adding that the committee has been consistent with its mandates to fight e-payment frauds among the stakeholders in the nation’s financial chains.  580

    Similarly, an official of the Shared Services Office, Governor’s Department, Mr Chidi Umeano, said the committee, which has been upscaled to e-payment fraud forum has, as members, managing directors of the banks, and the electronic payment card companies, such as MasterCard, Visacard among others.

    He said the forum holds meetings regularly to discuss and fine- tune plans on how to solve problems relating to e-payment frauds in the industry.

    “There has been growing concern on the part of the forum to address the issue of frauds relating to electronic payment transactions in Nigeria. The forum hopes to provide solutions to the problems”, he said.