The Central Bank of Nigeria (CBN) on Tuesday said it has repositioned the Nigerian payments system to be competitive and innovative globally.
This comes as electronic transactions through various channels have increased by almost nine folds between 2017 and 2021.
Godwin Emefiele, governor of the CBN said this at the ongoing seminar for finance correspondents and business editors in Calabar, Cross River State. He said the CBN has continued to initiate and implement several programmes to drive innovation and meet emerging market needs in the payment system.
“Many payment products that abound in the country are not readily available in some other countries,” he said.
Some of the products include instant payments, QR codes and Central Bank Digital Currency, the eNaira.
Emefiele said the CBN’s efforts culminated in an increase in the total volume of transactions on Electronic Payment Channels.
While the use of cash and cheques is decreasing, web-based transactions such as Point of Sale (POS), NIBSS Instant Payment (NIP), ATM and Mobile Money Operations (MMO) have increased substantially.”
For instance, between 2021 and 2017, the volume of transactions via electronic channels such as ATM, POS, WEB, MMO and NIP increased by 99.76, 1,775.72, 35,502.58, 2,413.44 and 836.50 percent, respectively.
Some of the key CBN initiatives that accounted for the significant achievements in the payment system architecture are highlighted as follows; e-Naira, open banking, regulatory sandbox, Cardless and other contactless payment options, and Bank Verification Number (BVN).
The CBN governor highlighted some of the extant challenges faced by the Bank in implementing the initiatives, which include weak social infrastructure, unlicensed activities of entities, cyber threats and fraud.
In response to the challenges posed by cyber threats, the CBN said it has put in place certain initiatives in place, including the Nigeria Electronic Fraud Forum (NeFF), which consists of all relevant stakeholders, to proactively address challenges and safeguard the integrity of the e-payment channels.
There is also the Payment Card Industry Data Security Standard: mandatory for any entity that processes, stores/saves or transmits payment card data, among others.
He said with a total enrollment of 57,431,355 as at March 31, 2023, the BVN is supporting the development of credit profiles for banking customers, which will assist in improving access to credit for credit-worthy borrowers by banks.
In his presentation, Musa Jimoh, director payment system management, CBN, said The BVN has also helped the industry in investigating fraud and other related crimes.
Represented by Adefuye Adeyemi, deputy director, payment system management, CBN, said the best identity management that is reliable is BVN, adding that the BVN database is clear.
“With these initiatives in place, the CBN has demonstrated irrevocable commitment to ensuring the stability and safety of the Nigerian payment system,” Emefiele said.
“We shall continue to deepen our oversight of the activities of operators in the payments system as well as ensure full compliance with regulations. In this regard, examiners and supervisors would continue to ensure that services delivered by participants meet required security standard,” he said.
During the colloquium, Chijoke Ekechukwu, one of the panelists thinks Nigeria should be one of the top five in the world with robust payment system rather than top 10.