PaywithSpecta is boosting consumer spend, fueling economic growth – Atilola

In this interview, Shina Atilola, divisional head, Retail and Consumer Banking at Sterling Bank Plc, shares the bank’s inspiration for launching PaywithSpecta, an online digital credit solution. He revealed how the solution empowers consumers to make essential purchases and pay in instalments, creating sufficient demand and stimulating the economy.

Sterling Bank recently launched PayWithSpecta, a consumer and merchant payment solution, what does this product entail?

COVID-19 impacted the world’s economy, and Nigeria is not an exception. The capacity of a consumer to pay for products and services has diminished. We know the merchant wants to sell, and the consumer wants to buy. A significant challenge has been the capacity of the consumer to make purchases. We created PaywithSpecta to solve this nagging problem. It allows consumers to pay for goods in instalments, while merchants are credited instantly.

It creates new funds and disposable income for consumers, which empowers them to make essential and everyday purchases. On the part of merchants, it establishes sufficient demand for their products and services. Consumers can now pay for products and services as opposed to just window shopping.

PaywithSpecta was designed to help merchants to increase sales and enable consumers to enjoy the good things of life without necessarily killing themselves to pay.

What inspired your bank to introduce a solution that allows customers to make purchase from merchants’ stores then pay over time?

You will agree with me that the outbreak of COVID-19 and the lockdown that followed affected businesses. Among the worst-hit are small businesses and households which necessarily precipitates an economic downturn. It means consumers will not spend, merchants will not sell, and manufacturers will keep goods in their warehouses and stop manufacturing new ones. This can lead to employees’ disengagement, which increases unemployment, and the economy will continue to be in recession. Daily spend by consumers drives economic growth. We intervened with PaywithSpecta to stimulate spending and mitigate against recession. It represents our way of igniting the economy.

What are the requirements for individuals and merchants seeking to access the payment solution?

The requirements are simple and straight forward. For merchants, just necessary information: The company name and its Registered Company (RC) number. Once we have the details, we add you to the platform, and consumers can use PaywithSpecta to make purchases from your store. Now, it can be in-store or online. In-store means they can visit your physical store, or they can purchase online. Some merchants are purely online. Consumers can visit their online store to buy and PaywithSpecta digital credit.

A consumer who wants access to the digital credit would need to provide his name and account number. We will run a check to determine the customer’s capacity before granting a valid digital credit for three months. Customers can spend, withdraw cash, or use it to buy items from the merchants that accept PaywithSpecta within those three months.

PaywithSpecta can also be used to pay school fees or medical bills. For instance, if an individual is sick and wants to do surgery but cannot pay for it, they can use digital credit to sort the bill.

How do you determine a customer’s credit limit on PaywithSpecta?

It is quite simple. Once we have your name and account details, this will give us access to your six-month bank statement. Then, we analyse it and see what you have the capacity for. We will then avail you that credit limit. So, it is now for you to determine how much you want to spend from the credit limit.

Is this digital credit like having a virtual credit card? What are the unique features or benefits of PaywithSpecta?

You are correct. Let me tell you some of the things that PaywithSpecta will disrupt. When you visit a store either online or in-store, you have options. You can pay with your card, or you want to PaywithSpecta. Immediately you put your Specta ID, your user credit is debited, and the merchant credited instantly.

So, the issue of carrying several cards is out of it. The issue of POS is out of it. You have eliminated the use of cash. The risk of somebody forcefully taking you to the ATM and asking you to insert your card, input your pin, withdraw the money are no longer there. You have eliminated those risks.

PaywithSpecta brings safety, convenience, speed, and ease of making purchases and payments to Nigerians.

What is the anticipated impact of the payment solution on the economy?

For consumers, it is making dreams come true. Consumers can now make purchases that include cars, household items, groceries, and other essentials, even when they do not have money. They can PaywithSpecta and spread payments over a period. This increases sales volume and boosts the cashflow of merchants.

Linking this to economic impact, we are in a recession, and manufacturing is down because consumers do not have purchasing power. If merchants do not sell, the downturn will linger, leading to job losses. But with PaywithSpecta, merchants will sell more, and manufacturers can increase production. Increased production creates new jobs and new consumers with purchasing power leading to a healthier overall economy in which businesses thrive. And the economy bounces back.

Consumer finance is still very low in Nigeria compared to advanced economies, what can be done to accelerate its uptake?

This is cultural in nature. We have a poor perception of credit in this country. Most of us are trained to save to acquire whatever we want. However, if you check the wealthiest people in the world or rich nations of the world, they use credit a lot. They use credit to invest in businesses that bring about growth and development.

Sterling Bank, especially the Specta Team, is at the forefront of leading this change. It will take time, but when people see what can be achieved through consumer credit, they will join the train. We are creating awareness and educating the public about the benefits of consumer finance. For instance, we are educating Nigerians about items they can buy and pay for in instalments within three months without any interest payment.

We are letting Nigerians know that this option is available. Consumer education is the key that will unlock our latent consumer finance potential.

Can you tell us a little bit more about Specta’s performance since its debut in 2018?

Specta has done exceptionally well, and we are proud of the product. It has done close to N100 billion in loans with less than 1.5 per cent non-performing loans. We are proud of our achievements. Mind you, we are not resting on our oars which led us to create PaywithSpecta.

PaywithSpecta is the first of its kind, and you will be shocked because we have not launched the product. We are testing the ground. We are launching fully this year. We are too pleased with the kind of numbers that PaywithSpecta is churning out and the rate at which it is going.

What measures are in place to mitigate the risks associated with consumer finance default?

As bankers, we are always managing risks. In the case of PaywithSpecta, we perform credit checks on consumers opting to use the solution. This reduces credit default risk significantly. So, the process of onboarding, though fast and short, is as detailed as possible. And beyond our standard collection, Global Standing Instruction (GSI) is available, same for appropriate insurance. In some instances, we have some comfort from the merchants.

Credit risk arises when borrowers are unable or unwilling to pay. Most retail credit customers are willing to pay, and that has been a noticeable trend.