The Managing Director/Chief Executive Officer of Nigeria Inter-Bank Settlement System Plc, Premier Oiwoh, in this interview speaks about the New Quick Response (NQR) payment solution code, an innovative payment platform launched for all financial service providers in the country. Oiwoh explains that with more people being able to pay for goods and services with just their smartphones, the NQR payment is about re-creating the Nigerian payment experience whilst deepening financial inclusion in the country. Obinna Chima provides the excerpts:
Can you tell us more about NQR and why NIBSS is introducing it into the Nigerian market?
The NQR is an electronic payment and it is alternative to cash transaction. Most SMEs and service providers in the country today require instant payment and that is why people still rely on cash. To solve that cash problem in the society as a lot of people still rely on cash, the NQR has been fully developed to meet a lot of Nigerians’ needs by understanding our ecosystems and working to ensure that the product meets the needs of the ecosystem. The payment platform is faster in terms of payment process. The buyer does not need to reveal his/her account number to the seller. It just requires scanning and the payment is done and the buyer and seller get their alert instantly. In the area of value, we are looking at efficiency. It is faster and safer means of payment. With the pandemic, the product provides a better means of payment rather than touching cash or any other device. The consumer is in control of his/her mobile phone and from the phone, the buyer can just scan and make the payment.
So, will you say the introduction of the product was informed by the Covid-19 or consumer research to enhance payment?
It was informed by research and it is a product that has been on-going and with Covid-19, it becomes important to use the product for payment. Thankfully to the CBN Governor and chairman of NIBSS as the standard for the QR policy was released by CBN and that enabled all the process.
Where does this leave the point of sale (PoS) and other forms of payment in the market?
The PoS payment and other forms of payment will continue to exist. QR is just an added form of digital payment. One area this will be well addressed is the micro payment side. For instance, a commuter is going into a bus or buying newspaper from vendor and boarding taxi can pay with QR as many of these micro businesses don’t have PoS. But the micro business operators can display their QR Codes around their neck or somewhere else and the transactions are carried out. In terms of deployment, as noted by executives of banks, it is faster and cheaper in terms of deployment. Most people selling products have their mobile phone, and all they need to do is to present their QR Code the buyer. But the question is how many have people have smart phones and data for connection and what of the farmers in the rural , how will they be served, but we have factored all this in the product. Working with banks, NIBSS we are going to ensure that Nigerians across have a feel of this product.
QR Code as a product has been around for about three years, so why is NIBSS pushing it now and what is the level of security using the system?
If a customer can transact on his/her bank mobile App today, then the customer can use QR Code for means of payment. This is because the same authentication level the customer passed through on the mobile app is the same the customer will be passing through using NQR Code, this means it is safe as a means of payment.
Another beauty is cash is avoided. Today Nigeria has grown to a level where anything can be tracked electronically in terms of payment and settlement. It is quite safe and robust. Though it has been around but there is a time for everything. It is not ideal to take innovations out without going to the laboratory to test it, develop it and make sure it is addressing some specific needs. Today in Nigeria, there are people who move around with goods and wears in their vehicles and as they sell, they are also collecting cash. A few of them though have POS but a lot of them take cash. This QR Code will solve that problem.
QR Code appears to be a higher technology means of payment being introduced in a high illiterate level society, how do you reconcile the two in the adoption of the payment system?
I can tell you that users don’t need to go to school to use the NQR. It is not complicated and the user does not need to have a smart phone to use the QR Code in a much secured manner. Today, I am aware of banks that are already paying cash out from ATM simply by allowing customers putting their fingers on the ATM for withdrawal. I am aware of banks working and displaying the NQR Code on their ATM machines by allowing scanning and withdrawal. There are a lot of innovations. What we have done at NIBSS is to build a platform, release the APIs. With PSBs, banks and other service providers in the industry we are going to find a whole lot of innovations around the APIs that has been released. I assure you that the issue of education on the use of QR Code has been taken care of. It is not about some of us resident in urban area, but the greater number of Nigerians in rural areas must be brought into the eco-system. Many of them don’t have bank accounts but with NQR Code, it will provide the opportunity, technically and in an easy way that will not scar them in terms of how it is used and how they adopt it. Our focus in NIBSS is to lower the cost of providing services. Secondly, we are focused on solving problems within the eco-system. Today, cash is a problem and the cost of managing cash is extremely high either within the banks or by merchants. For instance, if you are a service provider, you still need to move the cash to the bank. You will count and the bank will count but with NQR, the money is hitting your account immediately. This will bring a whole lot of efficiency and dynamism in the economy.
What is the volume of payment that can be made with NQR?
This will be determined by each bank in line with the ecosystem. Each bank has the authority to set up the limit they want. But our focus at NIBSS and working with our partners is to ensure that the micro-payment aspect is ensured. My greatest joy is the day I see the man selling gala along the road being able to display his NQR for payment, buses and taxis displaying their NQR for payment. Last week we say tomato sellers opening account because they say NQR working somewhere.
We hear that you are targeting five million merchants/businesses adopting NQR, could you confirm that?
NIBSS will be working with banks as we don’t have direct interface with merchants. Basically I am providing a platform to support payment system. The banks understand the logic behind this. Everybody in the banking system today needs NQR. Today, there are 113 million accounts in the industry and if this is reduced, you can get the ration per bank. If those banks decide to focus on their customers, a lot of banks today are uploading and the merchants are, I think the banks will devise strategies to go in to the ecosystem. It is all about safety nets and understanding. I believe that most traders who understand the value to adopt the system for payment than carrying cash.
The idea behind this innovation is deepening the financial inclusion, how long have been working on this product and who are you partners?
On the technology and partners, NIBSS has a whole team of technology experts who are involved and who understands Nigerian eco-system. On the financial partners, NIBSS is owned by all the banks and CBN is our leader. The API has been shared to all the banks and now and they are consuming them. They need to get payment into their accounts. For instance, there is low usage of cash in China. We as a nation need to move to that level of digital payment system and it will help the economy in the sense that we will have faster settlement and banks can easily process your type of business and advance credit to customers. This will help bring those cash-related activity into the ecosystem for a better economy and reduce the cost of minting currency, reduce the cost of processing cash.
In two years, what projections are you looking at?
In two years, I am expecting Nigeria having NQR virtually everywhere. It is all about experience, user friendliness and simplicity. It just requires three steps to make payment which are scan, confirm the amount and put your pin. The way we designed it, we don’t have to build a technology that will scare people, it is a technology very simple and easy to use with the right safety net embedded. My greatest joy will be farmers as well being able to use it to sell their produce. It will definitely happen because it is all about awareness, adoption and comfort. We need to understand the local market and design product and services that meet the market.