The Executive Secretary and Chief Executive of Electronic Payment Providers Association of Nigeria, Mrs. Regha Onajite, spoke with journalists on the recent reversal of the cashless policy and how to achieve the cashless goals. Emma Okonji brings the excerpts:
The Central Bank of Nigeria recently reversed its decision on the new charges introduced to deepen adoption of cashless policy. What are your thoughts on the reversal?
I will start by stating that the CBN has the constitutional mandates to control and administer the monitoring of financial sector policy for Nigeria. It is the duty of the regulator to ensure monitoring and price-ability and to promote a sound financial system in Nigeria. It is in its wisdom that it looks at the policies they think can promote stability in the economy and come up with policy framework, which will support such promotions. One of the policies, which we have applauded very loudly, is the Cashless Nigeria Policy. For E-PPAN, which is a CBN approved body to drive cashless policy, we see the cashless policy as a good policy that supports strongly what we believe in, because we believe in electronic payment and we promote e-payment. So we found out that when the CBN brought that policy, our members were excited because we are in a country where people do not do the right thing except they were compelled to do so. If you take a good look at Nigeria, you will see that the introduction of compulsory use of seat belts while driving was followed by serious enforcement, likewise the direction on the use of helmets by both private and commercial motorcyclists. Even though the use of seat belts and helmets were meant to save people’s lives, most people didn’t comply until government began serious enforcement. Unfortunately, people have stopped using helmets now because the enforcement activities have died down. So, it is the same way with the cashless policy. This is the way to go. Everywhere in the world, electronic payment is the main thing now. So, it is good for our economy. For us to be able to imbibe it; we need the support of the regulator; we need the push by the regulator. That is why we applauded the policy for cashless. That is why we also applauded the CBN for putting penalties for not using electronic payment system. So when we heard of the reversal of the new charges that were introduced in February this year, and which took effect on April 1, 2017, it made us take a step backward to look at what prompted such reversal. But we later understood the position of the CBN and we are all together in this. We are ready to support the CBN, and to support the payment system providers to ensure that we have a sound financial system; to ensure that our payment system is strong enough to compete with the rest of the world.
So what exactly are the reasons given for the reversal?
One of the main reasons the CBN gave for the reversal is the state of our infrastructure, even though Nigerians are asking if the CBN was not aware of the state of our infrastructure before introducing the extra charges on large deposits and withdrawals.
Of course, we are all aware that we are not yet there when it comes to infrastructure. So for us to now move on, we need to make deliberate efforts to improve the infrastructure as much as it concerns electronic or digital payment. You are aware that E-PPAN has been on the street doing sensitisation. We have been to rural areas and big markets. We got surprised at times when we get a village we had never heard of and we see the kind of economy that is there, and the kind of commerce that is happening there, and we were surprised. You find that upon all these business transactions happening there, there is even not a single bank in such communities to support them. Electronic payment makes the cost of service delivery very cheap and affordable for low-value transactions. So, despite the reversal of the policy, we don’t think we can stop a moving train. We have already started. Electronic payment has come to stay. It is just that a policy from the government would have ensured the faster adoption because Nigerians are people who like to be forced before they can do the simplest thing. That is why we are looking at this policy; that is why we saying it shouldn’t have reversed. But on a normal day, electronic payment is the way to go and for us at E-PPAN, the reversal of the latest charges introduced by the CBN is not going to deter us. We are going to continue with our advocacy for people to adopt electronic payment in the country.
What is your assessment of the e-payment sector, in terms of traction?
It has been amazing. The Nigeria Interbank Settlements System (NIBSS) releases information about the kind of transaction we have seen happening. From fewer Automated Teller Machine (ATM) in 2012, when the cashless policy was introduced, we now have over 17,000 ATMs while quarterly transactions on the platform now stands at N1.5 trillion. Last year alone, close to N40 trillion transactions were carried out through various electronic platforms. In the first quarter of this year, transactions on NEFT and NITP hit N10 trillion. The cashless policy has also brought about effective Know Your Customer (KYC) policy in the sector with 28.6 million Bank Verification Numbers (BVNs) already issued. These BVNs have also been linked to 51.7 million of the total 97.57 million bank accounts in the country. In terms of transactions on Point of Sales (PoS) terminals, Nigeria did N285.8 billion transactions in first quarter. In the same first quarter of 2015 and 2016, PoS transactions were N96.317 billion and N144.75 billion respectively. These are just some of the transactions we have recorded and transactions continue to grow on other e-transactions platforms as well. So, we are gaining traction but we could do better through continuous public awareness. Invariably, there is no comparison between the electronic transactions in 2012 and that of 2017, just five years after and what we have seen is just a tip of the iceberg. There is still a lot to come. We must know that cashless policy was strictly implemented in six states of the federation, including the Federal Capita Territory (FCT), Abuja and it is from the transactions in those six states that we are seeing the growth that we are witnessing now. So, we believe that as more people adopt cashless across other states, what we are seeing now is just the icing on the cake.
For some time now, E-PPAN has been on tour to some states to sensitise the people on cashless policy. Do you mind sharing some of your experiences?
In these few weeks, we have been to four states of the federation and in each of the states visited, we reached out to the three senatorial districts to do sensitisation. We have been to Ondo, Plateau, Enugu and Bayelsa states and we have created a lot of awareness on cashless policy. As I earlier said, the awareness as to what cashless is has been growing but people now wanted to know how they can use it. And I tell you, whether the policy is put on hold or now, people want to be part of cashless, people want to experience the excitement created by cashless policy. People see the benefits in other states and they are tempted to have it in their own state. We have seen people in the market who are ready to be mobile payment agents. They want mobile payment development to reflect in their own environment, to reflect in their economy. That is what we have seen. So, continuous sensitisation of people is still needed because the sensitisation will help create better economy anywhere cashless policy is implemented. People now understand how to use the mobile phone for cash transfer. They have heard about it and from all the sensitisation we have done, people have now seen their mobile phones as transaction tool. We have heard story of how people have been able to save their loved ones just because they had access to mobile payment and they can send money across to their relatives that need help any day or time of the week. And we do not want to drop people’s hope and as such, we are going to continue pushing for people to adopt card, to adopt mobile payment and how to use the internet to do transaction and we will continue our tour and talks across the country and interface with the CBN and payment services providers to ensure that people still use and get the benefits of electronic payment. So, we will continue to collaborate with stakeholders to increase awareness on the use of e-payment, as E-PPAN will continue to support the growth of cashless economy. We are in the middle to support the customers, service providers and the regulators. So, electronic payment is more about volume and that is what this sensitisation seeks to do.
What are some of the benefits to customers for adopting electronic payment system?
In using all the electronic payments channels, all the stakeholders would benefit immensely. If everyone is using this electronic payment, the service providers will benefit because there will be more volume coming through their system and then for the government, there is no other tool that can enhance financial inclusion more than electronic payments channels. So it is important that this sensitisation continues so that the value of e-payment will come to everybody and ultimately, the financial inclusion targets of 2020 would be met because to get everybody into the formal financial sector, the banks alone cannot handle it.
Cases of e-fraud in the industry also seem to be discouraging many from embracing e-payment initiatives. What is E-PPAN doing to address it?
We are doing quite a number of things to ensure that our payment system is safe because if it is safe for our consumers, it means that our promoter will get better business; it means that more people will get confidence in the payment system and it also means that the Nigerian economy will improve.
We have the annual payment system and fraud conference. We have been doing that for seven years and we are planning the eight conference this year. During the conference, we collaborate with all the stakeholders in the Nigerian payments sphere including the judiciary, law enforcement agencies, the regulators that are involved, associations and committees of people, the commercial banks and even consumers. We do this towards the end of the year in November. This year, we are looking at big data and we are going to bring people from within and outside Nigerian to look at the trends in big date as its affect on the e-payment sector.
What roles do you think telecoms companies in Nigeria could play towards supporting the growth of e-payment?
Telecommunications companies are enabler and we need them to be more involved in electronic payment through network expansion for voice and data services. We need them to see this as service to the nation. During our recent visit to Plateau State on sensitisation, one of our partners that went with us wanted the market people to sign up to their mobile payment platform and we had everybody using different networks. They all tried on that day and nobody could initiate successful transaction because of poor service and outright service outage. That was a very sad one for us. Now, can you now say the telcos are just an addendum? No. they are critical players. We need to involve them more.
The e-payment platform currently runs on existing infrastructure of telcos and I think that is why the CBN and the Nigerian Communications Commission (NCC) have been working on some level of collaboration. I know the central bank is also working with the Nigerian Communications Satellite Limited (NigComSat), to use satellite resources to reach areas not yet covered by existing telcos with fibre optic cables for connectivity. I think if the telcos put a little bit more effort in the area of payment system, we can go a long way.
How will you rate the level of cashless policy awareness and the role E-PPAN is playing in this regard?
I can tell you that the awareness has improved greatly from 2012 when we started. I personally go to the field during this sensitisation exercise that we do and we have seen tremendous increase of people wanting to be part of electronic payment system.
Our role in creating the needed awareness is also very important because today, people know about cashless, people know about the benefits. What they are asking now is ‘How can we participate? How can we be more involved? How can we be better protected from e-fraud criminals? So, it is different from what it used to be in 2012, when people felt ‘Why does CBN not want us to use paper money again?’
Although the awareness exercise has been very positive, but there is still a lot more we need to do. We need to continue to sensitise people because if we do not, the wrong message will spread out there. So, the role of E-PPAN cannot be under-estimated in raising the bar of cashless policy awareness, despite the reversal of the new charges.
How best can financial inclusion be accelerated in the country?
I think we need a deliberate government sector to be able to get the unbanked into the formal financial services sector. People are investing in digital payment infrastructure in their companies. We should know that these people are there for commercial purposes and how much can you really make from these people with their little earnings? So we need deliberate policies that can bring these people in. We need intervention not only in terms of policy, but also in terms of funding for people to develop local and indigenous means to get these people into formal financial services sector. If the government really takes it seriously, we can develop. We have young Nigerians that can develop apps that will bring up the people at the bottom of the pyramid and who have been originally excluded because of the structure of the financial industry.
What are other critical issues affecting the growth of the industry that you will like to bring to the knowledge of the regulator?
I will like to recommend that even though the last layer of the cashless policy has been reversed or put on hold, the CBN should not put it on hold for too long. This process of calling us back should be an opportunity to call stakeholders to see how the challenges of infrastructure can be resolved quickly and perhaps in phases. I also want the regulator to look at the financial map of the country to see what intervention has been put in such place. Every community and area in Nigeria has a special need and not everybody who has a mobile payment licence wants to serve the whole of Nigeria, especially the rural dwellers.
What are the challenges impeding growth of mobile money in Nigeria?
Mobile money is a solution that is seeking to address challenges in financial transactions in Nigeria. We have not achieved the kind of traction we had expected for mobile money in Nigeria. But we have come a long way. However, we would continue to look at challenges of the people and see how we can use mobile money solutions to solve them. There is need to design relevant mobile payment applications to resolve the challenges.