David Okeme, chief commercial officer, Systemspecs, creator of Remita, answers questions on the various allegations made against the company and Remita as a payment platform for the Federal Government. Excerpt
How accurate is the allegation that SystemSpecs refused to allow other payment solution providers (Interswitch, Etranzact, NIBSS, UPSL) integrate into the TSA collection platform?
Not true. SystemSpecs Remita Payment Technology Platform is open and connected to different payment industry players and partners. By its very nature, the Treasury Single Account (TSA) connotes SINGLENESS across many dimensions. That is why Government sought a SINGLE solution from a SINGLE solution provider to provide the TSA Technology platform after a rigorous consideration of different solution options way back in 2011 when the evaluation for a solution was done.
SystemSpecs from day 1 fully understood the technology and operational requirements of the different aspects of TSA way beyond the electronic collection component and demonstrated this all through the evaluation process.
Our Remita Payment Technology Platform that drives the TSA has integration with other payment technology solutions at the core of its design. This has always been one of the very unique and verifiable features that has distinguished the Remita solution in the market place.
We are connected and integrated with many payment technology solution partners to deliver a comprehensive bouquet of services on the TSA and to our other customers.
It may interest you to note that we are the first and probably the only e-payment provider that has opened our system to competitors all in the spirit of providing services to customers from a SINGLE point.
In the last few months, we have however learnt of different thoughts and initiatives, including the creation of a proposed “new aggregator model” which aims to bring other industry players to connect.
Suffice it to say we pioneered the design and implementation of the model of integrating with our competitors as PARTNERS as we very well understand the business imperatives of of competition and cooperation as may be necessary. We opened our system to multiple payment service providers (PSPs) who receive a share of the fees for each transaction consummated through their platforms integrated with Remita.
You may recall that even for bank branch collections, until SystemSpecs provided its unique platform, customers had to go to specific banks depending on who they wanted to pay. We integrated all banks and their branches so that customers can now pay from any bank branch. We introduced a technology that allowed payers to walk into any bank branch, including over 500 microfinance banks, and pay government.
A few PSPs have however expressed preference for an alternative connection approach, which would certainly lead to an unmanageable mesh or a “re-invention of the wheel”
In summary, we have always worked progressively with government and collaborated with stakeholders operating in different aspects of the financial services industry. Remita currently aggregates different payment channels provided by other payment service providers and provides this offering to support the TSA and our other customers.
How accurate is the allegation that you sit on payments from FG for months before giving other system participants their share? The allegation is that you decline to share the interest earned on the money that you hold onto?
Not accurate.
It is common knowledge that that we and all partners involved in providing TSA collection services have not been paid by government for about 17months now. It is therefore difficult to comprehend the allegation of holding on to what is not in our hands. We have never and will never attempt to undermine our collaborating partners on the TSA and other initiatives we have been involved with over the years of their entitlement or the income earned from the initiative.
As you may know, global standard practice is for electronic payment charges to be deducted at source in real time at the same time a transaction occurs. Today, this is NOT the case for TSA collections. No payment has been received by any party from January 2017 to date. If charges were being deducted at source, as it should be under normal circumstances, our system is designed to determine and directly distribute to all parties. This is what happens for our non-TSA transactions, as the system optimally settles all our partners without any hitches.
Even when payments are received from Government in arrears because transaction fees are not secured at the point of transaction whatever is received is immediately distributed to all parties once we secure payment schedule from Government.
For example, when TSA collections commenced, electronic card payment was not activated as a channel. We however introduced card payments through collaboration with industry partners who offer such services because it is considered one of the easiest ways for people to pay online. Interestingly, despite not being paid by Government for the past 17 months, we have continued to pay the card processing firms 100% of their fees in line with global practices. Since government is yet to resolve the issue of ensuring transaction fees are secured at the point of transaction for distribution in real time to all stakeholders, we find ourselves hanging in the middle as we have to ensure full collections delivery to government.
Of course we cannot continue this indefinitely which is why we have been in intensive engagement for a full resolution as soon as possible.
How accurate is the allegation that the Remita platform is unstable and opaque?
A system which for the first time in the history of our country makes it possible for relevant officials in about 2,000 MDAs and other relevant government and regulatory officials monitor and track every single line of payment and collection certainly cannot be the one being alleged to be opaque. Neither can a system the Government has publicly announced as a source of veritable data to support the ongoing VAIDS initiative be described as opaque except mischief is intended.
Remita’s design philosophy from inception about 15 years ago bore in mind the needs of public and private sector organisations and individuals for an easy-to-use payments system that easily gives full visibility into all payments and collections transactions without braking any sweat.
Before the selection and eventual introduction of Remita into the operations of the Federal Government even though it was already being used by a number of other public and private sector organisations, No Accountant General of the Federation, CBN Governor, Minister of Finance or any other top government official could determine account balances across thousands of accounts, affirm the consolidated cash balance of the government in real time or generate electronic statements of all government accounts online. These were laborious manual processes, which were time consuming and end results almost always lagging behind intended real time use.
For the first time in this country, since 2012 when Remita went live on TSA nobody has to open a manual file to determine our national cash position at the central bank.
On another hand, before the introduction of Remita, there were limited channels of making payment to government only within official working hours and only on 5 working days of the week. But now, using any of over 8 payment channels available on the system, anyone from any part of Nigeria can easily make payment to government from anywhere in the world and at any time of any of the 7 days in a week. That’s not to mention the accountability, comprehensive reporting system and transparency that have been introduced.
On the technical side, when issues arise as they certainly do on any technology solution from anywhere in the world, we have put in place a robust 24/7 operational support infrastructure that ensures issues are resolved within the shortest possible time to ensure we continue to guarantee our users seamless payment experience. Please note also that because we are connected to many partners including the CBN, if any of them has a challenge or a downtime it is bound to have a reflection on Remita’s service. (An example is like getting to an ATM and it says service not available, it may not be the fault of the bank but the witch powering the ATM). We however have Service Level Agreements (SLAs) with our service partners and always try to hold them accountable to these standards.
On a last note, as a service organization, we do not focus on trading blames or pointing fingers, we simply follow up with relevant partners for prompt resolution. For us, nothing dwarfs guaranteeing the convenience of our users.
How true is the allegation that you overcharge FGN on payments made to FG vendors? The allegation is that you charge between N100 to N5000 per payment while other players are willing to charge between N10 to N50 to do the same payments?
Anyone familiar with the workings of Government will know Government always has the upper hand especially when it has one of its very strong regulatory agencies assuming primary responsibility for managing the commercials of a regulated activity like charges for payments transactions.
It is therefore very important that we put things in proper perspective and give a little background into pricing mechanisms in electronic payments and how this relates to the TSA contracted charges. It is also important to point to the fact that there are other associated services to payments that have been contracted to be provided but for but for which pricing has been consolidated into a single mechanism.
Generally, there are two global standards or approaches to pricing electronic payment services, which are a Flat Fee and Graduated Fee models. For flat fee, there is usually an agreed fixed price, while graduated fees are structured according to different parameters and limits.
For example, to withdraw N100, 000 from an ATM, with every N10,000 one withdraws, one is charged N65 per withdrawal. Simply put: What has been done in agreeing the pricing for services in this instance is to cut out the accumulated fees that could have been paid on each N20,000 and instead charge N100 per million Naira which is where most transactions fall. We knew that the amount could vary based on the value of each transaction so a cap of N5000 was agreed to ensure that charges are within limits. This is in the public domain and not in any way a hidden fact. The second and equally important bit no one seems to be talking about is that whatever fees charged are shared by all the parties within the financial ecosystem who may be involved in any transaction at any time.
Consistent with dynamics of business, anyone trying to force its way into a revenue stream will always tout “cheaper pricing” as a basis for replacing any current system just to be able to get into play and then come up with price increases down the line. This is a basic thing in business which by the way empowers customers to always get the best deal by negotiating with current suppliers to get better deals. It is therefore not impossible for anyone to claim they can even offer services for free, just to get a foothold into a business opportunity and later raise prices or step out and leave the customer in jeopardy when it realises it cannot cover its costs.
In summary, there is no overcharge anywhere as all fees were duly negotiated and contracted and the contract provides for price reviews consistent with current market realities.
How would it affect your business if Remita is no longer the sole collector for FGN payments?
You may alter the future but you may not be able to change history. So if currently integrated or new platforms are introduced into the TSA collection scheme through some other arrangements different from is currently on ground that has been proven over the past 6 years, it would not change the fact that Remita pioneered TSA in Nigeria. For that, we are and will continue to be eternally grateful to Government for entrusting us with such significant responsibility when others could not rise to the game.
Before the commencement of TSA, SystemSpecs had been meeting the needs of businesses across Nigeria. With TSA definitely came an opportunity to let the world know that a wholly indigenous software solution could deliver a service other financial technology solutions – including some internationally renowned brands – were incapable of delivering. We believe that our role as a pioneer in the TSA scheme would remain a source of reference and we are convinced that our services will remain important to the initiative.
That said, we however do not expect to lose out even as we continue to engage government in the review of the technology architecture supporting TSA. We believe we are dealing with fair partners who will respect the sanctity of contracts, honour agreements, protect proprietary intellectual property rights and more importantly consolidate on the foundational hard work that has earned the nation accolades across many frontiers.
