Part of the objectives of the revised version of the Nigeria Payment System (NPS) Vision 2020 Strategy launched by the Central Bank of Nigeria (CBN) in Abuja last month is to reduce the cost of banking services in the country by at least 30 per cent. Governor of the bank, Mallam Sanusi Lamido Sanusi, at the event, which was at the sideline of the international conference on Payment System explained that the goal of the document is to see the emergence of a new collateral management for all the deferred net settlement systems, as well as strengthen payments system by embedding holistic review of infrastructure into scheme management process.
The revised document resulted from identified deficiencies observed in the existing market infrastructure, Sanusi said while promising that an online document would be published by the bank indicating interim steps to achieve long term objectives. He also promised that CBN would strengthen the scheme to reflect greater responsibility of scheme management covering all aspects of risks, business management and operational resilience.
“The key recommendations in the revised document resulted from identified deficiencies when the existing market infrastructures were assessed against the current 24 BIS/IOSCO Principles for Financial Market Infrastructure (PFMI). It is pertinent to note that the key recommendations resulted from a much higher target for compliance than was possible in 2007, due to the significant progress already achieved. Specifically, the Central Bank of Nigeria shall: Ensure that henceforth, no national payments system shall invoke the principle of unwind. CBN will formally inform the industry that unwinds must not be invoked in any national payment system. Each payment scheme must define and formally document the exact point at which payments are deemed to be ‘final and irrevocable.”
Another disclosure by Sanusi is that the CBN will remove its implicit role of ‘Lender of Last Resort’ for the RTGS payment system by December 2016 and Deferred Net Settlement systems by December 2019.
He equally disclosed that the apex bank has licensed 18 Mobile Money Operators (MMOs) which are currently doing an average of over N1 billion worth of transactions per month but despite the success so far recorded, the Nigerian payments system continues to face daunting challenges of infrastructure deficit like power, communication network, etc, slow adoption of e-payments due to prevailing cash culture merchant’s apathy to POS terminals due to transaction fee, literacy level, cost of electronic banking services and low level of public awareness on the existence of some e-payment products.
He reiterated other challenges identified to include concentration of e-payment facilities in the urban centres, unavailability of financial services in most rural areas, lack of effective national identification system and absence of e-payment laws or National Payments System Act.