Notwithstanding the push being given the electronic payment system, experts say growing the financial sector of the economy through an efficient e-payment scheme can only be achieved through motivation and effective collaboration among stakeholders, ADEMOLA ALAWIYE writes

One of the biggest and growing technological innovations in the area of banking, finance and commerce is electronic payment. This form of banking, which has continued to gain recognition and acceptability in Nigeria, has several advantages, compared with the traditional means of payment.

e-payment refers to the technological systems that enable bank customers perform financial transactions electronically.

 Consequently, experts and operators in the e-payment industry have stressed the need for a strategic agenda to consolidate the recent gains and fast-track the country’s move towards an efficient electronic payment system.

The Committee of e-Banking Industry Heads, recently said that for the nation to achieve an efficient e-payment system, there was the need for a programme of incentives for electronic payment usage, including  a balancing of cooperation with competition, massive education and enlightenment; expansion of service offerings on electronic payment channels, especially Point of Sale terminals; a business approach to electronic payment; and full adoption of electronic payment by the government.

Experts at the second annual conference of CeBIH, tagged, “Developing a market structure that works: Challenges and Prospects for the Nigerian Payment System,” stated that while there were still a lot of challenges in the quest to move the country from cash to electronic payment, there had been significant achievements, especially in the deployment of electronic payment channels, like Automated Teller Machines, Internet, Point of Sale and electronic money transfer.

The Managing Director, Nigeria Inter-Bank Settlement System, Mr. Ade Shonubi, said there was the need to have a plan to drive e-payment in the country, adding that the improvement that had been made so far in the sector was as a result of collaboration among stakeholders.

Shonubi said, “Developing a Nigerian payment system that works requires unbiased regulation and oversight over the financial system practitioners by the regulatory authorities; collaboration between major stakeholders in the e-payment value chain. CeBIH needs to get more involved and should set industry targets with NIBSS which they both should work towards on a recurrent basis.”

Speaking in the same vein, the Chairman, CeBIH, Mr. Chuma Ezirim, said while collaboration was needed to set standards and build infrastructure to reduce cost for the industry, there was, nevertheless, the need to balance cooperation with competition.

He said, “Centrally-agreed common features can sometimes hamper product and/or service differentiation and innovation at the individual service provider level. A key question is what factors the authorities and key stakeholders should consider in balancing cooperation and competition in retail payment systems.”

Ezirim added that while it was the responsibilities of Central Banks to provide oversight and regulatory functions to deal with conflicts of interest and balance cooperation and competition in order to achieve optimal availability and affordability of payment instruments, however,  the CBN should not unduly interfere in the provision of electronic payment access services in the country, which was an area that gave banks the opportunity to compete for product differentiation and innovation.

Reacting, the Deputy Director, Banking and Payment System, Central Bank of Nigeria, Mr. Emmanuel Obaigbona, said, “The cash-less policy was primarily aimed at enthroning electronic payment. We are making progress but we need ideas from experts. There is the need to come together because CBN encourages collaboration. We need to hear from you, you are the experts on electronic payment. It is from your own perspectives that a lot of things happen. You tell us your own views, we look at them, and we invite you to discuss, and we would be able to come up with something for the industry.”

On how to facilitate acceptance of e-payment channels, experts in the e-payment industry called for a programme of incentives that would compel cardholders and merchants to accept e-payment channels, especially PoS.

The Division President, Sub-Sahara Africa, Mastercard Worldwide, Mr. Daniel Monehin, said, “In my experience in markets like South Korea, what was used there was a dual approach. What I see mostly in Nigeria is a single approach. In Nigeria, we see the stick; we see the penalties; we see the charges, but we don’t see the carrots, like telling people, ‘f you embrace electronic payment, here is the pat you will get on your back.’

“The picture of merchants that keep PoS under the table will be very uncommon if you have programmes in place that motivates that merchant to record a sizable portion of his revenue on that terminal, such that it would be like the developed markets, whereby as you are opening your business you will get your PoS connected because that is your gateway to your revenue.”

He, however, noted that active participation by government was critical to the enthronement of e-payment irrespective of the model adopted by operators and regulators.

Monehin said, “I am yet to see any government across the world, make bold moves in e-payment like the Nigerian government. The only difference is that they are directing everybody to do it but they are not doing it. Government business is not using electronic payment and until the government itself begins to play in this, it is not going to work. You can put any model together for e-payment but if government payments, benefits payment, payments to the contractor, whatever payment that goes through the system, if it is not electronic, you can forget about any model you adopt, it will not work because in a developing market the government plays a major role as a catalyst.”

 According to the Vice President, Sales Africa & Middle East NEMEA, VeriFone United Kingdom, Mr. Martin Holloway, banks need to be brave in their deployment of e-payment channels especially PoS and not be discouraged by the apathy of merchants.

He said, “Banks should help merchants change their perception of PoS. A lot can be done with the PoS. It can serve as platform for advertisement; loyalty program etc. And it is the duty of banks to make merchants see the value of PoS so that they can make money from it.”

Holloway noted that another way to facilitate e-payment was to connect PoS to mobile payment, such that people could use their mobile phone wallet to pay for goods and services through PoS.

He said, “This will not only fast track e-payment but also facilitate financial inclusion. VeriFone has developed and deployed this kind of PoS with multiple functions in several countries and is working with NIBSS to deploy such PoS in Nigeria.”

On his part, the Country Manager, DataGroup IT, Mr. Victor Ajua, said that while there were numerous models for achieving efficient electronic payment system, there was need to find the right model that would suit the Nigerian environment.

“I think the banks need to sit down with CBN and NIBSS and fine-tune whichever model they want to adopt. I have heard so much about different models. We need to find the right model that suit our environment and move the economy,” he added.

Source: Punch