OUR BLOG POST
The Central Bank of Nigeria in collaboration with the Bankers Committee, Nigeria Inter-Bank Settlement System and other payment industry players have enhanced the payment systems by continuously providing solutions to increase the resilience of infrastructure to encourage the usage of electronic payment methods across the nation, writes Oluchi Chibuzor
With a population of over 200 million people and a large percentage with access to financial services, it has been said that Nigeria has the largest economy in Africa with significant opportunities for businesses willing to expand in the country. There is no doubt that over the years, with the provision of favourable regulatory policies by the Central Bank of Nigeria (CBN), Nigeria has made great progress in creating a robust payment system through several reforms targeted at growing the system.
In providing a sound payment system infrastructure, where stakeholders and customers can consummate business transactions with confidence, trust and timeliness, the Central Bank of Nigeria in collaboration with the Bankers Committee, Nigeria Inter-Bank Settlement System (NIBSS) and other payment industry players have enhanced the Payment Systems by continuously providing solutions to increase the resilience of infrastructure to encourage the usage of electronic payment methods across the nation.
These efforts have over the years added value to our economy as Nigeria leads in payment systems across the world. Indeed, Nigeria has leapfrogged ahead of a number of advanced economies in the area of payment innovation, especially Instant payment. In 2011, as at the time most small & medium enterprises and other service providers in the country desired a payment platform that delivers instant value; Nigeria demonstrated its quest as a forward-looking country with a vibrant financial & payment service industry.
Through the mandate of the Central Bank of Nigeria to ensure the safety and stability of the Nigerian financial system, a faster, simpler and a more efficient means of payment was birthed. The introduction of the NIBSS Instant Payment (NIP) platform transformed the way Nigerians choose to pay for goods and services at all levels. Leveraging this, NIP has provided more opportunities for financial institutions and other players within the ecosystem to innovate and provide more options for payments.
Bank Verification Number
Then came another national initiative launched by the Central Bank of Nigeria, Bankers Committee and implemented by NIBSS in 2014; the Bank Verification Number (BVN) was developed to harmonize the financial sector and improve banking operations, enhance credit advancement to Bank customers and also encourage financial inclusion.
With strong collaboration across the ecosystem, NIBSS facilitated the growth and proliferation of BVN with the management and issuance of unique identification number to Bank customers across the country. In 2015 and 2019 respectively, the Industry Fraud and Trapped Card portals were developed by NIBSS as portal services provided to the financial industry for stakeholders to monitor and report fraud; and for proper management of debit/credit cards trapped at various ATMs across stakeholders’ service point.
Addressing the need for speed and transparency in platform integration & certification as well as industry efficiency for KYC, in 2020 and 2021 respectively, NIBSS created an Industry Sandbox and a centralized Address Verification service that gives access to all NIBSS services in a single suite and allows financial institutions proactively carry out KYC (Know Your Customer) to verify their customers respectively.
Payment experts have commended the introduction of these innovative solutions pointing out that the Nigerian payment system has evolved significantly over the years leveraging the wide spread technology advancement to simplify payments and deepen financial inclusion. Sequel to the COVID-19 Pandemic, globally, research had shown a major shift to contactless payment options with a number of countries like China, India, Thailand, Ghana, Singapore, Malaysia pioneering solutions with Quick Response Code. To bridge the gap within our fast-evolving payment landscape, Nigeria has not been left out as recently we saw the entrance of a National Quick Response Code (NQR); another initiative driven by the Central Bank of Nigeria (CBN) and implemented by Nigeria Interbank Settlement System Plc (NIBSS).
Integration process for financial institutions
With NIBSS providing efficient integration process for financial institutions to leverage APIs, NQR delivers instant value for P2B, P2P and B2B transactions with a more improved customer experience. This payment option has empowered Bank customers who own smartphones to easily access information provided by merchants for the purpose of making payments.
It had long been recognized that the competition is indeed cash and we believe that cash is overripe for disruption, thus as a nation, we must embrace a cashless economy, encourage the provision of platforms to enable seamless transactions to boost business expansion where cash is efficiently disrupted. Consequently, the Nigeria payment industry has continued to introduce initiatives geared towards creating convenient ways of making payments and extending electronic payment benefits to Nigerians even at the bottom of the pyramid where usage of cash has been predominant.
Payment’s value chain
What is NIBSS’ role and every other participant’s role in the payment’s value chain?
NIBSS is a critical shared service provider and National Central Payments Solution for Nigeria.
Under what circumstances can NIBSS or any of the participants be held responsible for delayed or failed transfers/transactions?
Delays are relative, as it is the responsibility of every player in the financial system to ensure due diligence in mitigating risks.
First Publised on ThisDay