…as bank customers lost over N2bn last year
The Central Bank of Nigeria has described e-fraud as the biggest challenge facing the electronic payment policy of the banking system in Nigeria.
CBN Director, Banking & Payments System Department, ‘Dipo Fatokun, who spoke at a bi-monthly forum organised by the Finance Correspondents Association of Nigeria in Lagos over the weekend, said fraud not only leads to loss of funds, but reduces confidence of customers using e-channels.
Fatokun explained that there was the need to collectively tackle the menace, by customers, banks and financial regulators, adding that e-fraud had never been completely eliminated, even as bank customers lost over N2 billion to the sleaze, last year.
The CBN director who spoke on the theme, ‘Electronic Payments: Industry’s Performance and Regulatory Issues’, described e-payment as any form of payment that allows the use of electronic system to initiate, authorise and confirm the transfer of money between two parties.
The transaction reason, he said, could be for the payment for goods and services, settlement of obligations, gifts, among others.
He explained that e-payments are driven by a network of interconnected systems, which make it possible for exchanges of value between payer and payee, sender and receiver or donor and beneficiary.
“Banks, Payment Service Providers (PSPs), Financial Authorities and the Central Bank play various roles in developing the payments’ system infrastructure to drive electronic payments being nationally utilised. The e-payment industry refers to all stakeholders, operators, regulators, infrastructure, merchants, retailers and the final consumers of the payments’ products and services.
“Payment technologies and platforms bind the industry together in a tight ecosystem,” he explained.
Fatokun added that global non-cash (electronic payment) transaction volumes grew at 8.9 per cent to reach $387.3 billion in 2014, an increase driven by accelerated growth in developing markets.
“Cards have been the fastest growing payments’ instrument since 2010, as cheque use has declined consistently and significantly. Debit cards accounted for the highest share (45.7 per cent) of global e-payment transactions and were also the fastest growing (12.8 per cent) payments instrument in 2014,” he said.
According to him, global non-cash volumes are estimated to have grown by 10.1 per cent to reach $426.3 billion in 2015, aided by high growth in emerging economies across the world, including Africa, even as the Nigerian e-payments’ industry has been evolving in line with the evolution in global payments in both Wholesale and Retail systems.
“Banks, PSPs, and the CBN have played various roles in developing the payments’ system and creating products and channels for electronic payments.
The Retail Payments Transformation Programme of the CBN has led to the introduction of various electronic payments’ products and services by operators in the industry. The electronic products are gradually reducing the usage of cheques and cash, as noticed consistently in the annual performance report since the inception of the Cash-less Policy in 2012,” he said.
He said the volume and value of transactions based on cheques and National Electronic Funds Transfer (NEFT) have been consistently reducing annually since 2013, while same data for the Nigeria Interbank Settlement System- NIBSS Instant Payment (NIP), Automated Teller Machine (ATM), and mobile money channels have been on the increase. This is an indication of users’ preference for instant value channels over non-instant payment channels.
“The ATM Channel accounts for the highest volume of transactions, while the NIP accounts for the highest value of transactions annually. This is because the ATM is usually the e-payment channel that new and lower value account holders always interface with, while corporates and upwardly mobile middle class customers make transfers using NIP,” he said.
The CBN director also disclosed that banks and other e-payment service providers operate in a highly regulated environment.
“Regulation is necessary to ensure that operators focus on delivering products and services that enable compliance, efficiency, financial stability and a positive customer experience. The attempt to regulate electronic payments in Nigeria started with the CBN Electronic Banking Guidelines, issued in August 2003,” he said.
