The Managing Director/CEO, Xpress Payment Solutions, Mr. Oluwadare Owolabi, in this interview speaks on the challenges and prospects of agency banking in Nigeria, as well as the need for public and private sector partnership in achieving financial inclusion. Emma Okonji presents the excepts:
What are the key challenges with agency banking in Nigeria and how will specific technology solutions help in addressing these challenges?
One of the major problems with agency banking in Nigeria is the challenge being faced by network service providers in the remote areas of the country. The nature of agency banking is such that the success of any financial transaction from any agent location, largely depends on the strength of the networks of telecoms service providers, which in most cases are usually not very strong. The process will be smoother when Network Service Providers can overcome these challenges.
Secondly, the very limited services available to the average agent is not too encouraging. The average agent can only process and execute utility bills payment, airtime purchase, cash-in and cash-out in some instances. All these are laudable, however, there needs to be more empowerment of these agents by the government. The average civil servants should be able to receive his salary from his nearest agent; the agents should also be empowered to initiate other ancillary services currently limited to traditional financial institutions.
So, I have a strong belief that the network operators and financial technology (FinTech) solution providers like Xpress Payment Solutions, including the government, have roles to play in enhancing agency banking and all forms of financial transactions. On how our company has tackled the aforementioned challenges, our Point of Sales (PoS) machine is dynamic and functional. It is embedded with services such as cash-in, cash-out, and an imminent Value Added Service (VAS) on PoS, which will provide customers with rich experience as far as VAS activities are concerned.
How will you assess Nigeria’s readiness to cashless policy, given that Nigeria is still a heavy cash-based society, despite efforts to make it cashless?
I would say we are in a precarious situation as far as cashless policy is concerned and this is because of the current state of the country’s financial landscape, which has been riddled with money laundering and fraud. These factors could discourage most people from using mobile money. There are over 20 million bank accounts in Nigeria but few are active. Currently, the majority of people would rather keep their cash at home where they can see it – a habit that some say will be hard to change. While the benefit of moving the society to a cashless era is in no doubt enormous, the shift is not as smooth as it seems. Countries like Singapore took seven years to embark on this journey and the silent revolution of the payment system in the US occurred over decades. So we might have to exercise more patience. But I hold no doubt that in no distant time, Nigeria will be a full-blown cashless society.
What is your view about the role of Internet Service Providers (ISPs) in the entire process of financial inclusion drive in the country?
ISPs are key drivers of cashless economy, but the challenges they face, which is also affecting agent banking, is the porous nature of their networks, which is hampering the quality of services they offer. But as a solution provider in the financial technology space, we are developing solutions that will deal with cultural challenges in different localities, in order to boost trust among service providers and customers. Agency banking has to do with customers building trust on agents known to them than those who are not known to them. It is therefore important that government should create an enabling environment that will give more freedom to local agents by empowering them with more products and services that will enable more patronage in their kind of business.
Since you operate in the financial technology service sector, what is your take on the federal government’s decision to impose more taxes on online transactions?
I believe the federal government is trying to act in the best interest of the people and the economy at large. Perhaps the timing could have been a little better, but if the federal government believes that such a policy would translate to economic prosperity for our dear country Nigeria, then we should all exercise some patience and see how this works out.
FinTech players like Xpress Payment are seen as technology disruptors in the financial services space. What in your view has been the impact of technology solutions in financial services offering?
When you look at financial services currently, they are all based on creating a faster, more efficient service for customers which focusses towards more mobile-based quicker solutions. Since cloud-based technology information is so often used, the importance of information technology is incredibly vital.
Companies that offer progressive financial services like ours are continuously on the lookout for new technologies to improve the efficiency and speed of service, as well as provide better customer experience. Exponential growth in information technology has prompted us to leverage digitisation of banking technology to transform the financial services industry through customer experience management. As a financial technological company we are looking at improving online customer service. Technology has also helped us to develop innovative financial services. The development of better payment systems is always a key challenge for organizations and we are not excluded.
There are billions of financial transactions that are happening on a day-to-day basis, this is why information technology is perfect for the way the financial systems are set up. The software tools and computer systems that are in place for automation, also create a huge importance for the use of information technology in financial transactions.
As a fintech company with focus on implementation and provision of electronic payment solutions, how will your solutions help in bridging financial inclusion gap in the country?
Most of our solutions are tailored to meet the needs of the costumers. The first thing we do is to carry out a detailed study of the market. This helps to provide insight for the company, these insights have been successfully synched into a workable idea to provide seamless financial solutions to all customers across all landscapes. As a company, we stand at a vantage point by providing solutions that are innovative yet simplistic which we believe have provided us with a competitive advantage over our competitors.
What are the benefits of some of your solutions to customers and the Nigerian economy especially in driving financial inclusion?
Most of our solutions are designed to support agency banking, which are focused on financial inclusion drive for rural communities. Xpress Payment Solution has been successfully carrying out transactions with registered agents, following an urgent need to bring stakeholders on board in a bid to publicise and reposition them in the increasingly cluttered fintech space in Nigeria. For instance, our agency banking solution, known as Xpress Agent, is a banking platform that offers customers an additional income stream. The platform is equally convenient, protected and regulated by the Central Bank of Nigeria and it comes with unique selling propositions such as same day settlement, robust and user-friendly platforms, adequate branding materials, timely access to commissions and commissions view as you earn.
Other solutions from Xpress Payment include Xpress Pay Settlement, Xpress e-cashier, Xpress Payout, and Xpress Reg. The Xpress Pay Settlement solution is a funds sweeping solution that ensures automated sweeping of client’s funds in various accounts in multiple banks into a chosen bank account. The Xpress e-cashier is a multi-account and multi bank collection platform designed to enable banks via their branches collect funds on behalf of public and private sector clients, religious organisations, among others, while the PayXpress solution is a value added service (VAS) platform designed to avail customers services like airtime purchase, bills payment, collections services for government parastatals/donations for religious institutions, among others.
The Xpress Payout solution is a web-based multi-account, multi-bank solution capable of handling high single and large volume bulk payments to beneficiaries whilst providing a wide range of customisable and detailed reports. It is specially designed to manage salary payments, pension payments, and payments to vendors, while Xpress View solution is a platform that provides a single dashboard view of account balances across multiple banks. It is a useful tool for treasures to monitor bank account positions very closely for cash management.
What are some of the specific challenges you are facing as a company in deploying financial services in the country, and what is the volume of financial transactions carried out by your company in the last three years of the company’s existence?
The most potent of the challenges we have faced have bothered on training people who are getting in contact with Fintech solutions for the very first time on how to use them. While some companies just dump complex solutions on their customers, we go the extra mile to ensure that first-time users have an exhaustive understanding of how our products work by creating a training department to achieve this purpose. As far as the volume of financial transaction is concerned, the company has over 11, 426 clients nationwide and has well over N411.4 billion in the value of collection and funds disbursed, N1.3 trillion in the value of transaction via our switch and payment gateway, an excess of 75.3 billion in PoS transactions, an excess of 20 million in volume of transactions processed via our system.
Can you shed more light on the operations of Xpress Payment Solution, in relation to empowering local agents in the county’s financial technology ecosystem?
Xpress Payment Solutions Limited is a FinTech company that specialises in the design, implementation and provision of electronic payment solutions and our focus is to further bridge the existing financial inclusion gap in the country, through our indigenous technology solutions that have received the nod of the Central Bank of Nigeria (CBN). Our solutions and products that address critical payment challenges, were officially launched this week in Lagos.
Having commenced operations in the FinTech space in 2016, the company is licensed as payment transaction switching services, third party processing service, payment terminal management services and as a payment terminal service provider, and it is currently managing Point of Sales (PoS) terminals for over 18 merchant acquirers. Our solutions are designed to empower local agents in all forms of financial transactions.
As a payment solution company, how secure is your payment gateway, and who are your security partners?
I have a competent team that focuses on security coupled with a lot of technology solutions that assist me on frauds related issues. I also have a top-tier data centre and we do what we term “call over” on a daily basis.So, we have the inherent capacity to arrest fraudulent transactions as quickly as we can with mobile monitors to trigger alerts in and out of the office, as opposed to waiting for two weeks. Xpress Payments possesses one of the best fire-walls in the country which helps to guard against fraudulent activities and PCI-DSS certification which is the highest level of security accorded to any payment institution in Nigeria.
We also have a settlement and reconciliation team in-house, that checks every transaction daily, including verifying if the parties to transactions got value for the services rendered. These measures have greatly helped us in tackling cybercrime. In addition to this, our switching infrastructure is fortified with an in-built anti-money laundry and fraud management module for our switching business.