Yemisi Izuora
The Central Bank of Nigeria (CBN), has identified apathy, poor infrastructure as key challenges confronting e-payment system in the country.
The Apex bank, said the initiative is facing some resistance as a result of prevailing cash culture, where people preferred to transact business with cash rather than electronic system of payment which is safer and convenient.
However, the bank is picking up the pace to confront the identified challenges, which include poor infrastructure to enhance smooth operation of the system.
Speaking at the Finance Correspondents Association of Nigeria (FICAN) Bi-Monthly round-table in Lagos today, Dipo Fatokun, CBN Director, Banking and Payments System Department also said that efforts are on to get rid of fraud arising from e-payment transactions.
Fatokun, who was represented by Musa Jimoh Deputy Director Banking and Payment Systems Department, said that the Payments System Vision 2020 launched in 2013, was intended to accomplish the re-organisation of the National Payments Governance Structure and encourage more people to embrace e-payment transactions.
He said the project identified agriculture, smart cities, health, transportation, hotels, entertainment, government flow, education and Consumer Bill Payment as well as direct debits as focus areas.
However, Fatokun explained that the absence of a unique identifier in the banking industry has negative consequences on the growth of e-payments and that the need to resolve the challenge that prompted the CBN, in collaboration with the Bankers’ Committee to launch the Bank Verification Number (BVN) project. The project, he said, will help build confidence of customers on the e-payment channels and enhance integrity of transactions.
“The BVN initiative is aimed at protecting bank customers and further strengthening the Nigerian banking system by uniquely identifying all bank customers and acts as a stop-gap, prior to the full implementation of the National Identity Card system,” he said.
Also, the CBN mandated all Banks, Switches and Processors to comply with Payment Card Industry Data Security Standards (PCIDSS) and subsequently conducted an oversight on compliance which showed that most banks had been certified.
He said the certification lasts for one year and banks are currently at various levels of re-certification. He explained that PCIDSS is a global compliance standard for any entity that stores, transmits or processes card payment data.
The apex bank, Fatokun said, has also directed banks to set up systems that will enable the automatic refund of Automated Teller Machine (ATM) dispense errors to customers. The regulator has also issued guidelines for card issuance and usage meant to provide minimum standards and requirements for the issuance and usage of payment cards in the country.
“Its implementation enables issuing banks, other financial institution, processors and cards schemes upgrade and maintain their card operations to ensure optimum security, efficiency, cost effectiveness and customer friendliness,” he said.
The platform, he added, also serves as a tool for banks and other financial institutions to assess their card issuance portfolio and ensures that consumers that carry Nigerian -issued cards operate within acceptable standards.
“From a regulatory perspective; the CBN acknowledges that less than optimal, inefficient or poorly designed systems will ultimately have a negative impact on systemic stability, economic development and growth. It has therefore consciously pursued the growth of a payments system that is safe, efficient, cost effective and reliable,” he said.
He said payment systems have moved from the backroom to the boardroom of organisations given its strategic importance in today’s globalised world. He said a well-functioning payment system plays significant role in supporting the economy.
Fatokun explained that such significance prompted the apex bank to promote a payment system where the underserved and non-served are integrated into formal financial services sector.