The Bank Verification Number (BVN), which was launched in 2014 has been adjudged to be successful by analysts in the banking and finance sector.
BVN according to Nigeria Inter-Bank Settlement System Plc (NIBSS) is a unique ID number issued to every bank customer at enrolment and linked to every account that the customer has in all Nigerian banks.
The Bank Verification Number was developed to harmonize the financial sector and improve banking operations, enhance credit advancement to bank customers and also encourage financial inclusion.
Individuals are required to submit an acceptable means of identification as prescribed for enrolment.
Assessing the impact of BVN so far on the industry, Ayodele Akinwunmi, relationship manager, of corporate banking at FSDH Merchant Bank Limited, said “it has been extremely successful. Thanks to the Central Bank of Nigeria for the introduction of the initiative.”
In his assessment, Aminu Gwadabe, national president of the Association of Bureau De Change of Nigeria (ABCON), said the introduction of the BVN launch in 2014 to date has been largely successful, more importantly in the drive for the digital know your customer verification in the financial sector.
He said it also helps security agencies in tracking the sources and destinations of proceeds of predicted financial crimes, adding that it also provides useful credit information of banks clients in processing credit facilities requests of their clients.
“As digital /crypto currencies are overriding the hegemony of feat currencies globally and in Nigeria the importance of the BVN will continue to benefit the financial system immensely,” he said.
NIBSS said with the increasing incidents of compromise on conventional security systems (password and PIN), there is a high demand for greater security for access to sensitive or personal information in the banking system.
In recent times, biometric technologies have been used to analyze human characteristics as an enhanced form of authentication for real-time security processes.
The Central Bank of Nigeria (CBN) in collaboration with the Bankers Committee, Nigeria Inter-Bank Settlement System (NIBSS) and other payment industry players have enhanced the payment systems by continuously providing solutions to increase the resilience of infrastructure to encourage the usage of electronic payment methods across the nation.
These efforts have over the years added value to the economy as Nigeria leads in payment systems across the world. Indeed, Nigeria has leapfrogged ahead of a number of advanced economies in the area of payment innovation, especially Instant payment.
In 2011, as at the time most small and medium enterprises and other service providers in the country desired a payment platform that delivers instant value; Nigeria demonstrated its quest as a forward-looking country with a vibrant financial and payment service industry. Through the mandate of the CBN to ensure the safety and stability of the Nigerian financial system, a faster, simpler and a more efficient means of payment was birthed.
The introduction of the NIBSS Instant Payment (NIP) platform transformed the way Nigerians choose to pay for goods and services at all levels. Leveraging this, NIP has provided more opportunities for financial institutions and other players within the ecosystem to innovate and provide more options for payments.
With strong collaboration across the ecosystem, NIBSS facilitated the growth and proliferation of BVN with the management and issuance of unique identification numbers to bank customers across the country.
In 2015 and 2019 respectively, the Industry Fraud and Trapped Card portals were developed by NIBSS as portal services provided to the financial industry for stakeholders to monitor and report fraud; and for proper management of debit/credit cards trapped at various ATMs across stakeholders’ service points.
Addressing the need for speed and transparency in platform integration and certification as well as industry efficiency for KYC, in 2020 and 2021 respectively, NIBSS created an Industry Sandbox and a centralized Address Verification service that gives access to all NIBSS services in a single suite and allows financial institutions proactively carry out Know Your Customer (KYC) to verify their customers respectively.
Prior to the COVID-19 pandemic, globally, research had shown a major shift to contactless payment options with a number of countries like China, India, Thailand, Ghana, Singapore, Malaysia pioneering solutions with Quick Response Code (QRC).
To bridge the gap within the fast-evolving payment landscape, Nigeria has not been left out as recently seen, in the entrance of a National Quick Response Code (NQR); another initiative driven by the Central Bank of Nigeria (CBN) and implemented by Nigeria Interbank Settlement System Plc (NIBSS).
With NIBSS providing an efficient integration process for financial institutions to leverage Application Programming Interface (APIs), New Quick Response (NQR) delivers instant value for Person-to-Business (P2B), Person-to-Person (P2P) and Business-to-Business (B2B) transactions with a more improved customer experience.
This payment option has empowered bank customers who own smartphones to easily access information provided by merchants for the purpose of making payments.
It has long been recognized that the competition is indeed cash and it is believed that cash is over ripe for disruption, thus as a nation, Nigeria must embrace a cashless economy, encourage the provision of platforms to enable seamless transactions to boost business expansion where cash is efficiently disrupted, analysts said.
Consequently, the Nigeria payment industry has continued to introduce initiatives geared towards creating convenient ways of making payments and extending electronic payment benefits to Nigerians even at the bottom of the pyramid where usage of cash has been predominant.