To boost its cashless policy initiative and deepen the financial inclusion strategy, the Central Bank of Nigeria (CBN) has introduced measures to achieve enhanced e-payment efficiency in the country’s financial services. It also said that the measures would help to tackle possible and identified loopholes that create avenues for fraud.
The CBN Director, Banking and Payments System Department, ‘Dipo Fatokun, explained these while speaking in Lagos at the weekend, with the theme: “A review of development in the epayment industry in the first half of 2015”.
Recalling that the e-payment being promoted today stemmed from the Payments System Vision 2020 which was launched in 2013, Fatokun said the initiative was meant to achieve the re-organisation of the National Payments Governance Structure and encourage more people to embrace e-payment transactions.
According to Fatokun, who spoke through CBN Deputy Director, Banking and Payments System Department, Musa Jimoh, the bank had a number of focus-areas which it identified as priority in launching the e-payment project. These include agriculture, smart cities, health, transportation, hotels, entertainment, government flow, education and Consumer Bill Payment as well as direct debits. Fatokun further explained that the pursuit of enhanced e-payment system contributed to the need for the bank Verification Number (BVN) exercise which was introduced in February 2014. He said the absence of a unique identifier in the banking industry has negative consequences on the growth of e-payments.
The need to resolve the challenge prompted the CBN, in collaboration with the Bankers’ Committee to launch the BVN project which, he said, will help build confidence of customers on the e-payment channels and enhance integrity of transactions. “The BVN initiative is aimed at protecting bank customers and further strengthening the Nigerian banking system by uniquely identifying all bank customers and acts as a stop-gap, prior to the full implementation of the National Identity Card system,” he said.
The guest speaker further explained that the CBN also mandated all Banks, Switches and Processors to comply with Payment Card Industry Data Security Standards (PCIDSS) and subsequently conducted an oversight on compliance which showed that most banks had been certified.
Fatokun noted that the certification lasts for one year and that banks are currently at various levels of re-certification. He explained that PCIDSS is a global compliance standard for any entity that stores, transmits or processes card payment data. The apex bank, Fatokun said, also directed banks to set up systems that will enable the automatic refund of Automated Teller Machine (ATM) dispense errors to customers.
The regulator has also issued guidelines for card issuance and usage meant to provide minimum standards and requirements for the issuance and usage of payment cards in the country. “Its implementation enables issuing banks, other financial institution, processors and cards schemes upgrade and maintain their card operations to ensure optimum security, efficiency, cost effectiveness and customer friendliness,” he said.
The platform, he added, also serves as a tool for banks and other financial institutions to assess their card issuance portfolio and ensures that consumers that carry Nigerianissued cards operate within acceptable standards.