Weak risk management framework and security challenges are the top issues militating against electronic payment system in Nigeria, Central Bank of Nigeria (CBN) has revealed.
Godwin Emefiele, governor of CBN made the revelation on Tuesday at the 8th Annual Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja while delivering a keynote address.
Speaking to the theme of the conference: “Positioning Nigeria’s Payments System for Global competitiveness’’, Emefiele acknowledged that the apex bank has put in huge amount of efforts into transforming the payments system in line with global trends, giving available statistics and figures.
However, he pointed out to the audience that there have always been several risks and challenges associated with the system.
“These challenges include, but not limited to weak risk management framework, security issues, resistance of target customers to patronise and embrace new products. Also Lack of unique identifier for customers across institutions and high operation cost cannot be overlooked,” Emefiele who was represented by Dr Sarah Alade, CBN deputy governor, economic policies said.
Alade also pointed to challenges involving interoperability and interconnectivity of networks, low level of card usage on Point of Sales (POS), non-transparent pricing as the bane of the system in the country.
The CBN boss urged the institute to look into the issues and proffer good suggestions to improve the payment system in the country.
“By this, we will be able to strengthen consumers’ confidence in the safety, security and reliability of our payments system bearing in mind that when this trust is undermined, then public confidence in financial services is eroded and the economy loses,’’ Alade said
The bank boss applauded the replacement of the real time gross settlement system (RTGS) ― an inter-bank payments infrastructure that facilitates the real time settlement of electronic funds transfer on gross and irrevocable basis ― that has been in use in the wholesales payment sector for more than seven years.
Alade noted that the new RTGS was integrated with “scripless security settlement system’’ to manage and settle government and other money market securities processed as electronic records in a central securities depository system.
Shepointed out that in the retail payments sector, a series of initiatives has been implemented toward building confidence and positioning the payment system for global competitiveness.
“These initiatives included the migration from magnetic stripe to Europay, Mastercard and Visa (EMV),” she said.
“I want to place it on record that this singular effort of the bank led to a drastic reduction in card related frauds by over 98 per cent which were hitherto prevalent in the industry. This has also instilled confidence in the payment system as Nigeria issued bank cards are now used in other parts of the world.’’
