Many days monitoring of Point of Sale transactions on the Nigeria Inter-Bank Settlement System (NIBSS) website have shown that customer error and the acquirer banks continue to be the biggest bottle necks to attaining 100 per cent success rate.
Total volume on the last day of June, 2019, was at 535,733 with successful transaction reaching 86.76 per cent at 464,790. Volume of failed transactions was at 70,704 representing 13.2 per cent of total volume. Customer error claimed the largest share at 35,700 to represent 6.66 per cent while acquirer bank error was second with 20,168, representing 3.77 per cent.
Failed transactions on the morning of Tuesday, 2 June 2019 went up to 117,954, representing 17.88 per cent of total transactions at 658,740. Customer error jumped to 10.08 per cent at 66,546 failed transactions while acquirer bank error stood at 31,463, claiming 4.76 per cent.
As at March this year, 270,111 POS had been registered and 221,056 deployed across the country. This is coming from a paltry 10,000 terminals deployed in 2011. However, it still falls short of South Africa which has over 380,000 POS terminals.
In a January guide, NIBSS noted that the failure rate of card transactions on POS terminals ranges between 13 per cent and 15 per cent. This means that in every 100 attempts to process card payment on POS terminals, 13 to 15 would fail. NIBSS Instant Payment (NIP) on the other hand has a 0.7 per cent failure rate, meaning that only about 7 NIP fund transfer transactions will fail out of 1,000 attempts.
A POS transaction goes through several hoops (about five different parties) before a transaction is confirmed. POS card acceptance services stakeholders include merchant acquirers, card issuers, merchants, cardholders, card schemes and card associations; switches; POS terminals owners; payment terminal service aggregators (PTSA); payments terminal service providers (PTSP); and processors.
Usually, once a card is used at any POS in any business, the payment is then authorised through the acquiring bank. The acquiring bank refers to the bank where the merchant has an account. The acquiring bank will then issue an authorization request to the card issuing bank. Once authorization is confirmed, the approval code is sent back to the POS. In many cases, this should take mere seconds so the payment can be taken for goods and services. The average processing time in Nigeria often depend on the quality of the network available. On Tuesday, 2 June, for instance, on the NIBSS POS live board, the average time was 3.27 seconds.
Customer error essentially involves the efficiency and the level of training handlers like salespersons and merchants bring to bear on the terminal. Often the error occur at the current and savings account stage, where the salesperson attempts verify the correct account the payment should be made from.
Usually, the salesperson will ask the customer whether he or she should select either current or savings account. No matter what the customer decides on, as studies have shown, the salesperson goes ahead to select the wrong account. Inevitably, the transaction would be declined, the customer is debited without his or her knowledge, and significant amount of time is wasted on a simple transaction. In very rare cases the money would be reversed before the customer leaves the business location or same day. The norm however is that the card issuing bank would take five to eight working days to reverse the money.
Stakeholders including NIBSS, commercial banks and payment service providers had flown a kitein March, with a remedial measure that would see that reversals for any business day are re-transmitted to cardholders between 10pm and 12pm mid-night through their banks or processors. The measure was supposed to have kicked off on 22 March, 2019, but is yet to.
Myriads of complain still trail every POS transaction failure.
Last year, stakeholders also resolved that as from January 2019, salespersons should desist from asking cardholders about current and savings account. Rather the salesperson should just select the default account option on the POS terminal during card payment on the POS terminal during card payment processing. Cardholders are also expected to tell the salesperson to use the default account whenever they are confronted with the question.
