Nigerians’ adoption of electronic payment across many channels has seen significant traction in 2018. Data from Nigeria Inter-Bank Settlement System (NIBSS) showed that in the first quarter of 2018, the total number of registered point of sales (PoS) reached 199,999 compared to 182,806 registered in the previous quarter.
However, experts have said that Nigeria is only doing less than 10 percent of the market potential. The reason is simple; retailers who are supposed to be the major drivers of growth in adoption are not embracing it fast enough.
Top on the list of concerns for retailers is the persistent delay in electronic payment settlement. The existing settlement system requires that retailers get money from transactions with customers the next day, otherwise known as T+ or Transaction Day+1. Some retailers even say that settlement could take up to four or five days, especially during holiday periods.
In an attempt to address the problem, Nigerian fintech firm, Unified Payment announced a new product known as UP Hourly Settlement Service (UP-HSS) in June.
UP- HSS is as ambitious as it is novel in the payment space in Africa.
At the basics, the product ensures that retailers get their monies on an hourly basis in addition with full settlement report that aids them in reconciling daily sales.
In other words, the product makes it possible for a retailer to get paid an hour after a transaction with a customer.
The implication of UP-HSS is a new system that makes available funds for retailers when they want it.
The previous system, which is mostly unpredictable and dependent on whatever whims and caprices shows up the next day, make it impossible for retailers to plan. Once access to funds is affected, the retailers supply can also take a hit. The result is that a significant number of prefer cash transactions. Cash is immediate.
“If we can guarantee that they (retailers) can have access to their funds which we can now do, it means that they will adopt electronic payment and that will grow electronic payment in Nigeria,” Agada Apochi, CEO of Unified Payment stated in a recent interview.
Apart from ensuring retailers received payment within an hour, UP-HSS also enables settlement on any card brand. In other words, retailers can receive their money irrespective of the card brand used to initiate the transaction of the processor of the card. That is a major boost for customer convenience.
Already four banks are collaborating with UP-HSS to increase adoption. The banks already enlisted include Diamond, UBA, Access and FCMB.
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