Mrs. Regha Onajite
The Chief Executive Officer, Electronic Payment Providers Association of Nigeria, Mrs. Regha Onajite, spoke with Emma Okonji on her team’s experience in a recent nationwide tour occasioned by the Central Bank of Nigeria, to sensitise people on cashless initiative. Excerpts:
Your team just returned from a nationwide tour where Nigerians were sensitised on the need to adopt the cashless Nigeria initiative. Why the mission and how was the experience?
Not too long, the Central Bank of Nigeria (CBN) extended the second phase of cashless Nigeria to five other states, and the Federal Capital, Abuja. The states include Abia, Anambra, Ogun, Rivers, and Kano.
The extension was as a result of the success that cashless Nigeria recorded in the first and second phases of the initiative.
The new locations were selected based on geographical zones and their huge involvement in commercial activities. They also control high percentage of cash flow.
In a bid to sensitise and enlighten the people in the six new locations, the CBN embarked on enlightenment campaign in various communities, just to prepare the minds of people into seeing the need to embrace and adopt cashless initiative. To actualise the goals of grassroot mobilisation in a cashless economy, EPPAN collaborated with CBN in carrying out the sensitisation campaign and we had to visit the six locations and discussed with members of the various communities about the benefits of cashless and the process of adopting it.
It was a nice experience for the EPPAN team that carried out the nationwide campaign, because we came to realise that Nigerians were ready for cashless, despite the infrastructure challenges.
We were able to discuss with bulk traders and artisans, and we spoke in their native languages with the aid of interpreters and they were happy and willing to adopt cashless Nigeria immediately.
We encouraged them to open bank accounts and adopt mobile system of payment in order to reduce cash handling and the risk involved. In all the six locations that our team visited, we were warmly received and the people were happy and willing to adopt the cashless initiative of the CBN. We introduced them to different channels of financial transactions, including the use of point of sales (PoS) machines and they were glad we visited.
What group constituted the EPPAN mobilisation team?
The team was made up of various bank officials. We at EPPAN that led the team do not have any product to sell to the people, and our role was to drive the awareness campaign, while the banks that were part of the mobilisation team, were on ground to sell their products and to demonstrate how the various payment channels work.
What CBN did was to create ‘Cashless Champions’ in all the five states and Abuja and they were part of our mobilisation team.
We also visited traditional rulers and through them, we were able to reach out to the larger community and the ‘Cashless Champions’ in each state were on ground to promote cashless Nigeria. The Nigeria Inter Bank Settlement System (NIBSS) were also part of our team. Mobile payment providers were also part of our team and several people in different communities were introduced into opening mobile payment accounts and bank accounts.
What was the experience like?
It was a fantastic experience for us as a team, and for the people we went to sensitise on cashless Nigeria. Majority that had never heard of mobile payment and electronic transactions were all excited to see how mobile payment and electronic transaction work, and they happily signed on after each demonstration from our team.
Some had never had of mobile payment and were happy to know that their mobile phones could be used to do financial transactions, without carrying physical cash.
In one of the local markets in Rivers State people turned out in their large numbers to register for mobile payment agents after each demonstration from the team. It was actually an exciting experience, which shows that Nigerians are willing to adopt the CBN cashless Nigeria initiative.
Was the experience in each state similar or different from others?
Our experiences from the state’s tour were almost similar, in the area of readiness and enthusiasm displayed by the various communities visited. One would expect the experiences to differ in each state, based on their customs and beliefs, but because the issue under discussion affects all of them and being a national issue, they all accepted it and some even said they had wished the subject matter had long been introduced to them because of the losses they have suffered by carrying physical cash for business transactions in the past.
Apart from that, their fears and challenges were also similar, but because we have tried it in Lagos State and it was successful, we were able to convince them against their fears, using Lagos State as our reference point. At the end of the day, we were able to address their fears that bordered on fraud, loss of money and infrastructure challenges.
Now that the communities identified infrastructure as a major challenge to cashless Nigeria, how will your team address it?
EPPAN is not a regulator, neither is it an operator that provides service. We are only an association advocating the adoption of cashless Nigeria and CBN recognises our role, hence the collaboration with CBN to further sensitise the people and further drive cashless Nigeria across the country. Since we have heard from them what their challenges and fears are, we will recommend to the CBN and also advise on the necessary step to take.
Since infrastructure has been identified, in what ways do you think telecommunications operators could be of assistance?
Electronic payment rides on the backbone of telecommunications infrastructure and we recognise their roles in cashless Nigeria. The banks cannot do it alone without the support of telecoms operators that have the infrastructure on which mobile money and other forms of cashless initiatives run. If the infrastructure is robust and scalable, cashless Nigeria will soar without technical hitches. In the area of infrastructure challenge as identified by the communities, we would like to encourage telecoms operating companies to strengthen their network infrastructure and make them available in all states, especially in the states that cashless Nigeria is operational. We want them to provide better service quality that will facilitate seamless transactions, especially when operating mobile or using point of sales (PoS) machines. We have had cases where some of the PoS machines were not working as a result of network collapse, which automatically became impossible to carry out financial transactions using the electronic cards on the PoS to pay bills.
There are some places we visited in the Eastern part of the country, and we noticed that they do not have strong network signals. So operators need to extend infrastructure even to remote communities to enable everyone enjoy the benefits of cashless Nigeria.
We equally visited the grain market in Kano, which is the biggest grain market in West Africa, and the story is the same.
What is the acceptance level among the communities visited?
The acceptance level is very high and they were pleased and convinced that the initiative would help them in several ways. Many wanted us to immediately convert their cash into electronic signals and input them into electronic cards. They were enthusiastic to begin electronic transactions immediately, but we advised them that they had to register with agents and deposit their cash in a bank account before the transaction. Some never believed they could live nor do business without carrying cash, so our visit was an eye opener to them. With hands-on demonstration, they were able to practice the use of PoS machines and they were all demanding a mobile payment agent in their markets.
Before CBN’s intervention to regulate electronic payment, Nigerians were transacting electronically in small scales. Why the CBN intervention?
I do not work with CBN and will not be able to answer for CBN, but what I think as a person close to CBN is that the apex bank wanted to control the market and regulate it in such a way that it would benefit every Nigerian.
As apex bank, and the bankers’ bank, CBN will not be able to effectively manage our economy if we rely so much on cash. Research has shown that countries with regulated electronic payment system are better off in terms of technology development. So there is need for CBN to intervene, so as to bring out the full gains of electronic system, to enable Nigerians benefit from it will help the economy to grow and manage inflation.
Do see the cash policy on daily withdrawal and deposit as a threat to the adoption of cashless Nigeria?
Cash policy on daily withdrawal and deposit cannot be an issue because we definitely need regulation for cashless Nigeria. The CBN put a cash-limit withdrawal and deposit for individuals at N500, 000, and N3 million for corporate, but that will not pose any danger to the system. Come to think of it that only 20 per cent do more than N150, 000 cash withdrawal in a day according to research, but this does not mean that only 20 per cent of the people will adopt cashless Nigeria because current statistics shows that very many people are involved in electronic transactions already.
There is a general belief that there is a slow uptake in cashless Nigeria. What could be the reason for this?
That general belief is packed with misconception because the adoption rate of cashless Nigeria is on the high side. What we need do is to further sensitise the people on it and that was exactly what the CBN had just commissioned us to do. Today, a lot more people have abandoned cash and more people are now using electronic payment system. The use of automated teller machines (ATMs) has increased, the use of PoS has also increased and the use of other electronic payment system has also grown. So I think we have a steady growth rate in the adoption of electronic payment system.
Telecommunications operators have alleged that their exclusion by CBN from driving cashless Nigeria, has slowed the entire process and they want CBN to reverse the policy and make them drivers of the process, instead of the banks. What is your take on that?
From the inception of cashless Nigeria in July 2011, the telecoms operators had always want to lead the entire process, but the CBN in its wisdom, insisted that the process must be bank-led, while the telecoms operators remain at the backend to provide the platform and the infrastructure that will drive the cashless Nigeria. I do not see any good reason why telecoms operators will be clamouring to lead the process even after CBN had said it must be bank-led because of the sensitive nature in handling people’s money.
They have mentioned MPESA of Kenya, a mobile money process that is driven by telecommunications operators, but they have forgotten that Kenyans have their challenges and that our peculiarities differ from theirs. So they should not be comparing Nigeria with Kenya, even though its cashless initiative is successful today.
The CBN has said telecommunications operators cannot lead the process because they are not trained to manage people’s cash and they are not under any financial regulator. They provide telecoms services through specialised infrastructure and that is the same infrastructure that drives cashless since it is about data communication. They should work closely with the banks to make the process a huge success in Nigeria.
There is a general belief that the agent network driving cashless Nigeria is still inadequate to meet the needs of Nigerians and is invariably dragging the process. How could it be addressed?
It is true that our agent network needs to grow and spread to all nooks and crannies of the country, because people need them to deposit and retrieve cash, via mobile payment system. But I want to assure Nigerians that the relevant authorities are working hard to address that challenge. CBN is considering working with the Nigerian Postal Service (NIPOST) to make them ‘Super Agents’, using their offices that are spread all over the country as cash collection and deposit centres. That will help increase the number of agent networks that are currently operational.
How has electronic payment helped in curbing corruption?
Electronic payment has greatly helped in fighting corruption in the society for those states that have adopted it. In Lagos State for instance, where cashless Nigeria was first introduced in 2011, the state government’s revenue increased by over 3000 per cent in the first year of adoption, even when the states’ allocations were not increased and the number of tax payers did not increase either. What it does is to place checks and balance in all financial transactions carried out by individuals and government, and block all loopholes through which monies were wasted and unaccounted for.
Cashless Nigeria is currently operational in six states and the federal capital territory, Abuja. When will it cover the other 30 states?
It is a gradual process and the plan of the CBN is to cover the entire country as soon as possible. But be that as it may, the target is to cover the entire country in the next one year. With the recent six locations added to the scheme, CBN has already covered the six geo-political zones of the country, and all states will be covered within the next one year, depending on the adoption rate.
CBN has also said it would support any state whose state governor comes to say the state is ready, and Ekiti state has just disclosed their readiness and we are working closely with the CBN to introduce cashless in that state.
EPPAN is not providing the infrastructure neither is it offering any banking service that is driving cashless, yet EPPAN has become an institution recognised by CBN in driving cashless. So what is your role in all of these?
Our role is simple but key to driving cashless Nigeria. We play a mediatory role between the regulator, the financial service providers, infrastructure service providers and the customers themselves. Our role is to ensure that the system works and that Nigerians everywhere understands the value that cashless Nigeria brings.
Our members include deposit money banks, mobile payment operators, card association, and the switching companies.