Our Reporter: DESMOND MGBO
The relationship between efficient payment system and a stable, sound and robust national economy can never be overstretched. Financial experts have argued that payment system of the country as a medium of circulation of financial resources is key to the realization of an economy that satisfies the needs of its people.
It is therefore not surprising that way back in 2007, when the Central Bank of Nigeria (CBN) muted the idea of revitalizing the payment systems strategy of the country, the objective was to give it fresh breathe, new vision and expertise that will strengthen the financial system.
The first step was to raise a vision driven implementation team to drive the concept. The team comprised renowned and established players cutting across several sectors of the nation’s economy, notably the Central Bank of Nigeria (CBN),Galaxy, Bankbone, NITDA, NCC, NIBSS, FSS2020 and FIRS.
Billed to be reviewed by 2015, the purpose of the programme was to enhance the subsisting payment systems in the country, by improving the institutions, instruments, standards, and technical means established to effect the transfer of monetary value between parties discharging mutual obligations in all trade and exchange transactions in the economy.
The objective is to diligently seek the establishment of a more efficient, and transparent payments system that is more integrated and focused at matching local and international standards.
The benefits envisioned by the proponents of the scheme are surmised as follows: integrating the Nigerian payments system with the international payment systems. It would also promote issues of transparency and accountability in the financial system, thereby reducing the vicious grip of corruption threatening the economy. It would also reduce the operational costs of doing business within the Nigeria economy and create a flexible climate in the payments system that makes it convenient for payers to be able to transact at any time and location of choice.
The strategic objectives so far impacted on the system include the facilitation of the reduction of operational and transactional costs, the establishment of international competitive market infrastructure. It has also impacted on the system in the form of ensuring the competiveness of financial products and services as well as provided support for the integration of financial markets across West Africa.
To say the obvious, it has been a fine and an unbroken run ever since 2007 with the Nigerian economy arising from the deliberate, planned activities engineered by the payments system pursued by the Central Bank.
So far, the Nigerian payment system has witnessed remarkable achievements in the recent past, with the introduction of a number of initiatives under the Payments System Vision 2020 programme.
Among the key impacts derived from the implementation of this programme so far include the ever growing size of Nigerians who have since been included in the financial system. The figure financially included Nigerians is moving towards 60 per cent and still rising.
Unlike in the not too distant past when a remarkable number of Nigerians belonging to different backgrounds were not captured in the financial system for different reasons, the situation is a lot more better now, although it could be improved. More Nigerians are becoming part of a huge hub of global financial network.
Aligned to this is steadily and assuredly that the economy is moving from a cash based economy to an electronically driven one. A few examples are noteworthy here. In most banks, transactions are increasingly becoming electronic. They are becoming less and less physical with abundant results such as speed and effectiveness of time management.
This departure from the culture of cash based transactions was recently complimented with the official position of the CBN which is driving towards a cashless economy for the country. The consequence is a faster, more dynamic approach to business transactions and business relationship.
Some of the achievements of the new payment system strategy to date include upgrading RTGS and CSD(Fixed Income Securities), the National Payment s gateway (Central Switch) , licensing mobile money operators across the country, extensive deployment of POS (with cashless piloting in Lagos and some other states) including an extensive deployment of ATMs, improved infrastructure for cards, cheques, direct debit and internet payment
Despite the milestones that have been achieved, there is the need to further drive the financial inclusion strategy by pushing strongly for financial literacy.
The CBN, through the team , must undertake a more vocal public campaigns that would ensure that more and more Nigerians are part of the cashless policy and are doing business through a number of platforms and template created by the payment system team.
It is also worthy to push access to these financial services, targeting the financially excluded using agency banking, global banking, electronic channels, post office.
Other suggested activities designed to enhance the programme is the need to improve its operation. In this regard, there is a need to establish a database that would facilitate the sharing of information among stakeholders which would subsequently help to detect fraud cases across the financial system players and the enforcement agencies.
In order to improve the operational environment, there is a need to promote interoperability of the payments system.
The need for the integration of West Africa has also been suggested. Here we are looking at the following options: The certification of the payment systems with the global standards, the integration of the upgraded RTGS (and that would include the transmission of swift messages) with the market capital and the creation of payment systems working groups consisting of the central banks of different countries within the West African sub region. The idea is to foster the integration of the payments system.
With regard to the reduction of the overall costs of the payments system, there is a need to facilitate a joint negotiation with the third party providers with a view to reducing the costs across the entire financial services industry.
Source : SunOnline