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E-payment adoption slows on transaction failures, stamp duty charges

Unlimit hosts webinar on e-payments in Africa

Many Nigerians, mostly traders and commercial bus drivers, are not accepting online transfers due to transaction failures and stamp duty charges by banks.

The redesigned naira notes were rolled out on December 15, 2023 by the Central Bank of Nigeria (CBN), followed by the reintroduction of cashless policy with restrictions on withdrawals.

This resulted in cash crunch across the country and the many bank customers were forced to adopt electronic channels to meet their transaction needs.

Some Nigerians who flocked to e-payment channels were frustrated by the incessant transaction failures and several bank charges.

The value of transactions fell by 4.8 percent to N37.6 trillion in February 2023 from N39.58 trillion in January, according to data from the Nigeria Inter-Bank Settlement System.

Godwin Emefiele, governor of the CBN, apologised to bank customers on Tuesday over transaction failures.

“I must apologise. Yes, online channels fail. But no doubt it is as a result of the deluge of online transactions that hit the banking industry. But it is being resolved,” Emefiele said while briefing journalists on the outcome of the Monetary Policy Committee meeting. “On a daily basis, our payment system management department monitor the online payment platforms so as to make sure that when there is a downtime, they are quickly resolved so that transactions can go on smoothly.”

Some banks have configured their Automated Teller Machines (ATMs) to dispense only N1,000 per transaction and charge N35 fee for users with other banks’ ATM cards.

In January 2023, some lenders notified their customers of a change in transaction reference for N50 stamp duty.

“Please be informed that the transaction narration for statutory stamp duty charges on your Zenith Bank account has been amended and is now captioned as electronic money transfer levy,” Zenith Bank said in a notice to its customers.

The CBN had in circular dated January 15, 2016, directed all deposit money banks and other financial institutions (OFIs) to commence the charging of N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and Federal Government Financial Regulations, 2009. That is, all receipts given by any bank or OFIs in acknowledgement of services rendered in respect of electronic transfer and teller deposits from N1,000 and above.

Emefiele had, in January 2023 during the MPC press conference, revealed that a total of N370.69 billion was collected as stamp duty revenue by banks on behalf of the Federal Government between 2016 and 2022.

Our correspondents visited some traders in Lagos who shared their experiences.

Ademola Yusuf, a meat seller at Ketu Market, Lagos, said he does not accept online payment for transactions owing to the high failure rate and stamp duty charges that banks deduct on every payment made into his account.

“I have a bank account but I don’t accept online payment because when customers make payment and show proof that they have been debited, your account will not be credited even after three hours and some days,” Yusuf said.

He added that banks also deduct N50 stamp duty on every credit transaction in his account. “Who bears the N50 stamp duty charges,” he asked, saying that customers will have to bear the extra cost, which many are refusing to pay.

Read also: Naira crunch: E-payment transactions rise 46% in one month

He said he would commence accepting when the online payment system becomes seamless and customers are willing to pay for stamp duty charges.

Ronke Raji, a food provision seller at Ikorodu Market, Lagos, said a customer made a transfer earlier this month and showed proof of payment but her bank account had yet to be credited since then, adding that she had been going to her bank to resolve the issue all to no avail.

“I was accepting online payment but I have suspended it. A customer bought goods worth N70,000 and provided me with the receipt that shows payment successful but I haven’t been credited for over two weeks,” Raji said.

“You can imagine N70,000 out of my capital for two weeks; how will I be able to restock and be profitable? I won’t accept online payment again until the process is seamless and banks can resolve transaction complaints quickly,” she added.

For Mohammed Salisu, a tomato seller at Mile 12 Market, the constant deduction of stamp duty charges by his bank will not allow him to accept online payments, only if the customer is willing to pay extra for the charges.

“The cost of my tomato is N500 and if the customer transfers N500, my bank will deduct N50 as charges for stamp duty. This has reduced my selling price to N450 and if you tell the customer to pay N550, they will refuse; so because of that, I have stopped accepting online payment,” he said.