On May 31, at The Zone, Gbagada in Lagos, e-Payment Providers Association of Nigeria (E-PPAN) organized the 1st National Media Workshop themed “Promoting Digital Literacy to Enhance Public Confidence and Financial Inclusion.” The event turned out to an assemblage of crème da la crème in the e-payment ecosystem. CYRIACUS NNAJI reports.
There is cause for concern that only 58 million Nigerians has access to financial services out of a population of about 200 million.
The workshop which aimed to seek cooperation among media practitioners on the need for proper sensitization, education, promotion and reportage of e-payment system with the ultimate aim of ensuring financial inclusiveness of all Nigerians, recorded a total of 62 participants, in which over 80% were high level reporters and pressmen of various news agencies in Nigeria.
To kick start the event, the Executive Secretary and Chief Executive Officer, E-PPAN, Onajite Regha was on hand to welcome the press and dignitaries.
Minister of Information and Culture, represented by Mrs Stella Adefusi, Deputy Director, Ministry of Information and Culture, in his goodwill message said “So many people in Nigeria are outside the banking system. Most developing countries, including Nigeria, have since shown great interest in the enhancement of financial inclusion. These they have done through policies and Policy intervention; education and awareness creation; the discovery and innovations that can contribute substantially to a wide adoption of digital financial product and services.
“In most of recent times, entrepreneurship and access to finance have often been identified as the most important critical factor in the development of a nation. It is in this regard that Nigeria experimented with various financing schemes and programmes, including: CBN credit guidelines, which required banks to allocate a stipulated minimum credit at concessionary interest rates to the preferred sectors of the economy, including SMEs; CBN Guidelines for Direct Debit Scheme in Nigeria; Cashless Policy of the CBN; Establishment of development finance institutions, which provided long-term loans to the real sector at concessionary interest rates; The Shared Agent Network Expansion Program (SANEP) of the CBN among others,” he said.
The Minister said an appraisal of the performance of the CBN, NIBSS, E-PPAN and various stakeholders in the payment system in Nigeria have made critical impact on the payment sector and the entire status quo, adding that in spite of these achievements, the potential of the payment sector’s contribution to economic growth and development have not been fully exploited. Many factors have been identified as constraining the growth of the sector, which include access to finance; inadequate and inefficient infrastructure; financial literacy; and distribution of financial products and services.
“While I admit that finance remain very key, permit me to mention today that financial education is as important as finance itself. The ministry of information and culture will support this initiative of E-PPAN no matter how small to ensure that every man on the street, in the rural or urban area is properly educated on finance.
“Financial Literacy remains very important in the development of Financial Inclusion in Nigeria, it is by no means one of the major constraints. There are other fundamental problems which must be addressed alongside the problem of financial literacy. Access points or Touch points are also very key, in driving a successful financial inclusion journey. As we are aware, the SANEP is an initiative of the Bankers’ Committee in which deposit money banks, Mobile Money Operators, and Super Agents, are expected to create 500,000 agents in the next 2 years. This drive is targeted at including about 60 million Nigerians to the formal financial system. As the name implies, SANEP is not a loan scheme. It is an expansion programme to guarantee and ensure access and touch points. It is very gratifying to note that this initiative has successfully taken-off.”
He said there is cause for concern that only 58 million Nigerians has access to financial services out of a population of about 200 million with about 50% of the population bankable. The reasons for this slow pace are not far-fetched. Our deposit money banks concentrate more in the cities and juicy areas. Microfinance banks are not as strong as deposit money banks. Lack of continuous education and sensitization.
Another insightful paper titled “The Nigerian Payments System: the Journey Thus Far” was delivered by ‘Dipo Fatokun Director, Banking and Payments System Department, Central Bank of Nigeria
He said that the Central Bank of Nigeria (CBN) under the Payments System Vision2020, and in collaboration with other key stakeholders, has implemented several initiatives aimed at modernizing and transforming the National Payments System (NPS) in recent years, adding that as the overseer in the National Payment System (NPS), the CBN issues Frameworks, Guidelines and Standards to facilitate the growth of initiatives that will harmonize payments operations.
Fatokun said the Central Bank of Nigeria, through the Payments System Vision 2020, has implemented the impactful policies and initiatives towards the development of the Nigerian Payments System which include Implementation of Nigeria Uniform Bank Account Number (NUBAN).
On Cash-less initiative which aimed at reducing cost of cash management and increasing the efficiency of payments system, while enhancing financial inclusion, he said Withdrawal Limits of N500,000 and N3million for individuals and corporate organisations, respectively; N150,000 limit on encashment of 3rd party cheques across the counter, Establishment of Nigerian Electronic Fraud Forum (NeFF) which has provided a centralized information sharing platform on fraud.
He said banks are now mandated to submit their monthly fraud reports on the NeFF platform, hosted by NIBSS.
On Mobile Money Operations, he said 25 Mobile Money Operators had so far been licensed to develop products and financial services that would be accessible to the banked and unbanked population. He said Agent Banking will provide a delivery channel for offering banking services in a cost effective manner to a wider geography of consumers, adding that Bank Verification Number (BVN) has ensured bank customers with unique identification against their accounts.
He talked about Card Fraud Prevention Strategies, stating that Bank had issued some circulars covering Introduction of second level authentication for card not present transactions, Banks to have real-time online monitoring tools for PIN entry attempts, Automatic blocking of card after three unsuccessful PIN attempts, Set limit for card to card transfers, POS and web payments
He further dwelt on the Regulatory Framework for Unstructured Supplementary Service Data issued recently (April 2018). He said some provisions of the framework include: Authentication measures for USSD transactions including a combination of any of International Mobile Subscriber Identity (IMSI), Date of SIM Swap, Date of Device change, International Mobile Equipment Identity (IMEI), Resolution time for USSD dispute 72 hours (3 days).
Maximum USSD transaction limit is N100,000 per customer per day, adding that any amount above that requires the customer to execute indemnity at the Bank USSD Transactions above N20,000 requires, Two-Factor Authentication (2FA)
No USSD financial service should be activated for customer unless the deactivation mechanism is put in place with effect from June 2018
In addition, the Bank is currently working to properly structure and formalize the sandbox arrangement in Nigeria by collaborating with some infrastructure providers (NIBSS) to interact with FinTechs based on which we came up with a framework for RegTech.
Communications to the public are now mostly done through electronic channels, as customers now have fewer reasons to visit bank branches. This, he said means that stakeholders are now interested in ensuring the efficient, convenient, flexible and secure systems.
He mentioned challenges Cyber insecurity to include system hacking, cybercrime, fraud, unsecured payment platforms, virus attacks, network downtimes, among others.
Low level of ICT usage – those without ICT access or computer literacy are finding it difficult to adopt payment channels. Privacy protection issues and unsanctioned use of customer data. Social apathy towards use of e-Payment platforms.
He maintained that the National Media Workshop is aimed at getting stakeholders in the payment system closer to the media team for better understanding of information in the sector, and enhancing their knowledge on how issues are reported in order to ensure a stable and sound financial system.
Other speakers at the occasion were Niyi Ajao, NIBSS who spoke on The National Payment System: Challenges and Remedies; Adedeji Adebisi, Deputy Director, Development Finance Office, CBN, Lagos talked about Financial Inclusion: Consumer Education, Key for Further Adoption. However, the event was rounded off with a Panel discussion on Financial Inclusion: Media Augumentation, Tool for Increased Adoption.