Onajite Regha is the Executive Secretary and Chief Executive Officer of the Electronic Payment Providers Association of Nigeria (E-PPAN). In this interview, she stresses the need to strengthen collaboration among stakeholders to tackle electronic fraud in the system, among others. Excerpts:
How would you assess Nigeria’s e-payment industry growth in the last one year? Will you say we have done well in terms of more people embracing the electronic transactions?
Certainly, the Nigeria e-payment industry has recorded a significant growth especially in this outgoing year. It is a highly competitive market so providers are introducing new innovations, new market strategies and improved service delivery among other things to capture the market. I can categorically say that there has been major improvement in the general index of electronic transactions in Nigeria compared to the previous years. People are becoming more comfortable and are therefore using the channels more.
But as you know we still have a lot to do. A significant proportion of the population still remains unbanked and that is a worry for us at the Electronic Payment Providers Association. We have pencilled down mobile payment as a solution to this challenge but we have not seen the impact we crave yet.
2015 has been a rather languorous year, with the elections and the change of government, naturally things were a bit slow in the year, but as we begin to understand the policies of the new government better then investors will begin to align strategies and introduce more aggressive marketing and this will yield better results in 2016. The President Buhari administration is preaching anti-corruption, transparency and accountability. When we talk of payments there is no better way to achieve these ideals better than using electronic payment.
Electronic fraud remains a major threat to uptake of electronic transactions as statistics showed that banks lost N6.2 billion to e-fraud last year. Are there ongoing serious initiatives to tackle this?
All around the globe electronic fraud is a major challenge because we know that the criminals follow the money. So now that money has moved online, we find criminals are there. But the fact is that industry stakeholders are not relenting and saying “Oh It is a global trend”. No we are committed to a safer payment system in Nigeria. We understand that payment is the nerve center of the economy and we are ready to protect our turf.
In the industry we have realized that fraud is not a basis for competition. We can compete on several other areas but certainly not on fraud. So we have seen increased collaborations within the industry in recent times. The industry has come up with many joint projects all to protect our users and the system. Funny enough, the fraudsters work together. They are organised. So if we have to check them we have to be organised.
You know technology evolves very fast and these fraudsters are usually very current with trends, payment providers are also trying to keep up with this speed to ensure that our systems are safe.
Recently, there have been so many initiatives to mitigate and control the incidences of electronic fraud in Nigeria, amongst other things. The Chip and PIN was introduced by the CBN to eliminate the weaknesses of the mag stripe cards. The CBN also mandated the Two Factor Authentication for Internal Banking Process. Recently there was a circular on Card Present Fraud In Non-EMV environment. The Operations of Instant Payments was also reviewed. The Nigeria electronic Fraud Forum (NEFF) has not rested on its oars since its formation. In 2015 NeFF recorded a lot of successes including commitments from the Chief Justice of Nigeria and the Inspector General of Police. The IG in his response to one of the prayers of NeFF set up Dedicated Payment and Card Crime Unit (DPCCU). Also all banks now have a 24 hours fraud desk. The BVN project is a major achievement and very soon we will all begin to enjoy the benefits of the BVN. The industry is also on the verge of establishing a Banking Risk Information Centre.
Do you think there is adequate collaboration among industry players across the e-payment value-chain strong enough to address the issue of e-fraud?
Like I explained earlier there is no other route to take. Let me put it this way. There are three steps in achieving safe payments. Step 1 is collaboration; step 2 is collaboration; and step 3 is collaboration. Fraud is not an issue for competition. Given the importance of providing secure payment systems whilst ensuring public confidence in electronic means of payment, the role of proactive fraud management cannot be over-emphasised. The collaborative effort among stakeholders in the industry has always been the major advocacy of E-PPAN. No organisation can achieve or single handedly defeat the magnitude of threat posed by electronic fraudsters. There is need to team up with the regulatory agencies, the law enforcement agencies, the judiciary and every single stakeholder in the payment chain. So E-PPAN will continue to advocate for information sharing among the industry players, as this will go a long way to compliment the ongoing efforts of the regulatory agencies in the industry.
Tell us the major roles expected from the regulator, the players and the consumers towards ensuring that e-fraud reduces drastically?
We can say we have seen the regulators have been very bold in taking the lead on the fight against fraud. We have seen other players take active roles on the fight against fraud. But I believe that our weakest link still remains the consumers. This is where I want the game to be enhanced. As an industry we need to increase awareness creation for the users of electronic payment. We need to get the users to be familiar with the tricks of the fraudsters. This is as important as installing world class technology and hiring world class experts. Common sense knowledge can go a long way to protect every one of us.
NeFF is chaired by the CBN and for some time now, NeFF has examined the idea of having a full week dedicated to anti-fraud with plans to work with the Bankers Committee. This is not the point where we now say this is your role, or that is your role. We are facing a monster called fraud. So we all roll up our sleeves and fight the battle. There is no limit role assigned in fighting e-fraud. The fraudsters never limit their tactics of fraud. They are ruthless in their activities. They take the advantage of our security loopholes to strike. So, why should we limit ourselves to certain roles in combating e-fraud.
We now have the Cyber Crime Act of 2015. We have seen a few loopholes in the Act but as it is it is sufficient to prosecute criminals. Of urgency is the need to create the Banking Risk information Centre for the coordinated efforts in fighting crime.
E-PPAN has been at the forefront of seeing Nigeria having an industry-neutral body to coordinate all e-fraud related cases in the country just as it is done in South Africa. Tell us what informed this staunch advocacy and the benefits of its creation for the industry?
As part of efforts to fighting the battle and winning the war on cybercrimes, E-PPAN has advocated for a Banking Risk Information Centre as a channel to fight fraud. Based on this, the association in 2013 signed a partnership agreement with South Africa Banking Risk Information Centre (SABRIC) to work with it in achieving this dream in Nigeria.
The proposed Risk Information Centre for Nigeria will act in the interest of the entire industry in the following capacity to maintaining a comprehensive banking fraud database; it will serve as a nodal point for information analysis dissemination on bank fraud. The centre will provide relevant support to law enforcement agencies and drive industry awareness programs for the general public. It will also drive institutional local and international collaboration to fight fraud. The centre will support the banking industry in designing and implementing collaborative programs to fight fraud and contribute to making the banking sector safer while instilling customer confidence.
A lot of people have fallen victims of scam emails and studies have shown that this may continue to be on the rise if not much education is embarked upon. Will you say banks have being doing well in the area of public enlightenment?
Honestly, banks are investing so much in the fight against e-fraud because most of bank transactions now are done electronically. They are doing their best in consumer education through the use of social media, in-banking information, emails, short messaging service and adverts (print and media) for increased awareness of the antics of scammers in the electronic payment region but due to the ignorance of customers they still fall prey to these fraudsters. But like we have seen, such individual effort might not hold sway because we are fighting a strong and united force of cyber criminals. There is the need for more collaboration among banks to winning this war. Hopefully, we will see the difference after we have an anti-fraud week where everyone is targeted with the same security message.
It has been argued that corruption in the public sector can be curbed through e-payment adoption. What is E-PPAN as a body doing to work with the government?
E-PPAN has constantly been playing its advisory role to ensure strong Public-Private Partnership that will lead to National economic growth. Also, one major area we are working tirelessly is that of advocating for e-governance by the MDAs of government. The annual E-Government Summit organised by E-PPAN and partnering with major stakeholders and government agencies is to help government drive for a new generation of e-services in public sector, enhance government administrative productivity, efficiency and transparency, and explore how it can manage the process of innovation in the context of public finance and how technology can improve the process of governance itself.
Through this government will be able to adopt electronic platforms to block leakages in the systems, and this will lead to more and improved revenue generation. Then, this will automatically reduce corruption in the system. In 2015, we looked at 7 major areas where the public sector can benefit from e-government adoption. We focused in areas such as Electronic Payment, Mortgage, Pension, Financial Inclusion, Insurance and the Micro, Small and Medium Enterprises (MSME). During the summit we concluded that the key benefits of adopting e-Government include improved efficiency in government processes, increased transparency, accountability, convenient and faster access to government services and lower costs of governance in general. We have set up technical committees to work with the government agencies and ministries in charge of these areas.
In clear terms, what are those things you consider as challenges for our nascent e-payment industry which require urgent attention to sustain the gradual traction being recorded in the industry?
E- Payment in the country is still budding thus weak risk management framework and security issues are among the major challenges affecting electronic payment system in the country. Others are resistance of target customers to patronise and embrace new products, lack of a unique identifier for customers across institutions which prompted the need to resolve this challenge for the CBN in collaboration with the Banker’ Committee launch the Bank Verification Number (BVN) project. The presidency has directed that all the unique numbers from NIMC, Banks and all other institutions be centralised for easy identity capture and recognition. Furthermore, high operation cost, interoperability and interconnectivity of networks, low level of card usage on Point of Sales, non-transparent pricing, apathy and poor technology infrastructure are also key challenges confronting e-payment system in the country.
What are those various initiatives to further boost the momentum in the e-payment industry expected from E-PPAN this year?
From E-PPAN, we will continuously engage relevant stakeholders, regulators to advocate for policies that will create an enabling environment for the smooth operation of electronic payment channels in the country. Also, we will continue to sensitize the entire public irrespective of their social standing and position to be cautious while using the e-payment channels so as to not to get breached/ compromised. In E-PPAN we will continue with our programs e.g. E-Government Summit and the Annual fraud conference so as to monitor sector trends so as to ensure an efficient and vibrant national payment and governance strategy.
What are your final words vis-à-vis what you consider as sine qua non in order to put our e-payment sector on the consistent path of growth?
E- Payment channels are convenient, faster, timely and a safer model for and during business transactions instead of the cash transactions. The positive contributions of e-payment channels to national development can never be overemphasised. Therefore, to sustain and improve on the current height I am of the opinion that the banks and other financial institutions should intensity efforts in mounting other e-payment channels to promote trade and commerce in Nigeria, the Central Bank of Nigeria should embark on intensive campaign for complete adoption of e-payments products especially at the grassroots, the government should provide enabling environment, good and reliable capacity utilisation to promote business growth and national development.
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