Holiday rush on ATMs, PoS shows need to scale up e-payment systems

…As heightened payment demand is cut short by minimal ATM points, PoS terminals

The Christmas and New Year festivity period has seen the country’s 16,600 Automated Teller Machines and unspecified number of Point of Sale Terminals (PoS) overburdened, leaving queues of frustrated and often stranded customers across the country.
This indicates a need to step up the numbers for both applications and think up an upgrade for the country’s electronic transaction space, experts say.

The Nigeria Interbank Settlement Scheme (NIBSS), in August 2016 said that the ATMs installed by commercial banks in Nigeria, had risen from 15,000 in 2015 to 16,600.

Even with this increase, the number of machines available is still remarkably low, against the required number of 60,000 units of the banking and payment facility pegged by the Central Bank of Nigeria (CBN).

James Agada, Chief Executive Officer, Computer Warehouse Group said at an editors’ workshop organised by CWG Plc in Lagos, that the number of ATMs available,“is surely not enough, as the number of people with ATM cards keeps increasing by the day, despite the shortfall in ATMs.”

Agada agreed that ATMs sometimes develop faults and break down but the problems are overstated. “The core issue we have with the ATMs is that we don’t have enough of them and the few around are overwhelmed.”

A recent report by the National Bureau of Statistics (NBS) notes that demand for electronic and online transactions is swelling.

“There is not enough awareness of different e-payment solutions in Nigeria, the ATM is still the most popular e-transaction solution in the country. However, it hasn’t done much to reduce the amount of cash transactions, as most people use the channel for cash withdrawals.

“What we need now is to look more towards e-wallet and mobile money and that is what telecommunication companies in Nigeria are trying to do,” Olusola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON) told BusinessDay in a telephone interview.

Gbolahon Awonuga, Executive Secretary, Association of Licensed Telecommunications Operators of Nigeria (ALTON) said the mobile money market is essential for the possibility of a cashless economy.

“Awareness is important, and also the readiness of telecoms operators because we have to remember that there is no mobile money banking without telecommunications networks. At a time when there are more mobile devices than human beings in the world, Nigeria should look more into developing and using electronic/mobile payment transaction solutions, asides ATMs and PoS terminals,” Awonuga said.

Comparing the awareness and acceptance of mobile payment solutions in Nigeria such as PayAttitude, Pay With Capture, Pagatech, Paycom and the likes to the success of Mpesa mobile money solution in Kenya, Muyiwa Ogunboye, telecoms industry analyst and Managing Director of e.Stream Networks, told BusinessDay that Nigeria is not ready to fully embrace such solutions as the acceptance rate is still very low.

“I don’t think Nigeria is ready to dabble into this. It will not be easy for MTN or any other operator to replicate the M-Pesa success story because a regulatory loophole in Kenya meant that the telecom service provider, Safaricom did not need a formal banking partner or license to launch services. With the CBN and NCC regulating, more regulations and security should be put into mobile money for telcos to achieve success in this sector,” Ogunboye said.

The volume of ATM transactions in Nigeria rose 15 percent to 157.1 million in Q3 2016 from 136.3 million in Q2 2016 while transaction value rose to N1.2 trillion in Q3 from N1.1 trillion in Q2 2016.

The volume of POS transactions in Nigeria rose to 16.0 million in Q3 2016 from 13.5 million in Q2, while the value rose to N0.18 trillion in Q3 from N0.16 trillion in Q2. Mobile payments also rose to 10.8 million in Q3 2016 from 8.6 million in Q2 while value rose to N0.22 trillion in Q3 from N0.16 in Q2.

Despite growing demand, supply is seen playing catch-up.
With the commencement of cashless policy in Lagos in 2012 many Nigerians have adopted the method of making online or PoS payments with their debit cards. However, a significant number of Nigerians still doubt that the country is fully ready for this transition, as complaints seem to be on the rise, especially during demanding festive seasons.

A recent survey showed that, of all the bank channels, customers used ATMs 68 percent of the time, with most customers using the ATMs more than once a week. The ATM has assumed great importance as the barometer of a bank’s brand, as far as customers are concerned.

The survey also shows that the local online shopping sector grew from N49.9 billion to N62.4 billion between 2010 and 2011 and from N62.4 to N78billion the next year. These figures keep growing year on year. However, customer complaints on cash alternative transactions remain the same.

Daniel Saleh, a bank customer expressed his frustration saying; “Even on weekends, most ATMs in Lagos are empty and unable to dispense cash, not to talk of during festive periods, especially Christmas and New Year. This problem has been unresolved for years because the growth and development rate for e-payment in Nigeria is slow.”

 

JUMOKE AKIYODE & LOLADE AKINMURELE