The Vice Chairman of NCC, Prof Umar Danbatta, said this at
the 2023 annual conference of the Finance Correspondent Association of Nigeria
(FICAN) with the theme “Strengthening Digital Infrastructure for Efficient
Innovative Payment System in Nigeria, held on Saturday in Lagos.
The NCC boss, who was represented by a Deputy Director at
the commission, Engr Anthony Ikemefuna, noted, “Strengthening digital
infrastructure for efficient and innovative payment systems in Nigeria is a
long-term endeavor that requires collaboration, investment, and adaptability.
By addressing these strategies comprehensively and proactively, Nigeria can
build a robust and inclusive digital payment ecosystem that benefits its
citizens and drives economic growth.”
He stressed the need to improve collaborative efforts
between the NCC and financial regulators such as the CBN, to enable proper
coordination of policies and regulations related to digital payments and
telecommunications.
According to Danbatta, this will ensure that the regulatory
environment is conducive for innovation and growth.
He further stressed the need to encourage partnerships
between financial institutions, telecom operators, and fintech companies to
develop and deliver innovative digital payment solutions.
He added that the country needed to leverage the expertise
and resources of the private sector to expand and improve digital
infrastructure.
“The government should take a leading role in promoting
digital payments by setting a clear vision and providing support.
“Implement e-government initiatives to promote digital
payments for public services and benefits distribution,” Danbatta asserted.
He called on telecom operators to support financial
inclusion initiatives by partnering with banks and fintech companies to offer
mobile banking and payment services to unbanked and under-banked populations.
Meanwhile, the Head, Digital Banking, United Bank for
Africa, Mr Olukayode Olubiyi, argued that inadequate infrastructure posed one
of the greatest challenges to Nigeria’s electronic payment.
He added that dearth of operational and telecommunications
facilities, as well as unstable power supply had slowed down the growth of
electronic payment in the country.
In the same vein, the Head of Digital Banking at the United
Bank for Africa, Mr Olukayode Olubiyi, harped on the need for collaboration
among stakeholders, including financial institutions, fintech companies,
government entities, and regulatory bodies, plays a pivotal role in ensuring
the success of innovative solutions.
“Ultimately, it comes down to policy, regulation, and
collaboration. If parties are willing to collaborate, many of the frictions
currently experienced in the Nigeria financial service sector can be
mitigated,” Olubiyi opined.
He mentioned that many e-payment systems depend on stable
power sources and robust IT infrastructure, such as laptops, mobile phones, POS
terminals, and dependable internet connectivity.
“During the period of cash scarcity earlier this year, banks
faced unprecedented e-payment failures, prompting the urgent need for
technological infrastructure upgrades,” he noted.
According to Olubiyi, the failure of e-payment channels on
such a scale compelled customers to wait for banks’ networks to stabilise
before completing their transactions.
According to him, the challenge of failed transactions in
Nigeria’s payment systems necessitates a collaborative effort among industry
stakeholders and the implementation of appropriate policies and regulations.
“An increased collaboration among the Central Bank, Telcos,
the commercial banks and FinTech to expand internet connectivity and seamless
electronic transfers across the country.
“A uniformity in banking applications across the industry
could significantly reduce the occurrence of failed or delayed payments,” he
added.
Olubiyi also stated that that would require robust
technology, stringent security measures, and seamless integration with various
payment platforms and financial institutions.
“To combat fraud, it is imperative for the government,
private sector organisations, and international partners to engage in strong
and cohesive collaboration. Sharing intelligence and pooling resources will
significantly contribute to the fight against cybercrime.
“Furthermore, this collaboration can extend to investments
in cybersecurity infrastructure, including cybersecurity training facilities,
incident response centers, and cybersecurity research and development centres,”
he reasoned.
Meanwhile, speaking earlier, the Chairman of FICAN, Chima
Nwokoji noted that the challenges witnessed in the country’s payment system
during the cash scarcity provided a window of opportunity for the banking
system to be proactive and inventive.
This, he said, would enable them to reap the benefits
provided by electronic payments.
“As banks and fintechs are expanding their financial
services portfolios to capture the unbanked and semi-banked, they should not
only be expanding their digital infrastructure, but also making it more
sophisticated to ensure seamless transaction and safety of funds.
“In its ‘Nigeria Development Update (JUNE 2023) the World
Bank pointed out that Nigeria’s digital and financial infrastructure is
inadequate to support a swift transition to a cashless economy.
He quoted the multilateral as saying, “The lack of adequate
digital and financial infrastructure and processes to support a swift
transition to a cashless economy— coupled with the fact that only 40 per cent
of adults have a bank account—further exacerbated the situation. The cash
shortage resulted in a black market for new notes, inflating overall
transaction costs.”
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