Poor e-Payment Platforms Threaten Cashless Policy

cbn-governor-sanusi-lamidoCapacity Not At Optimum Level Yet, CBN Admits

Bank Services Plunge

AS Nigerians move from cash-based transactions to e-payment system with the pilot scheme — the Cashless Lagos — expected to kick-off on April 1, there is mounting fear that the policy might cause a major upset.

Commercial banks may have failed to convince customers in the past three months the policy has been test running that they have acquired sufficient capacity to put consumers on the cashless highway despite several e-payment products that have been rolled out.

The readiness of the public appears largely low, as the volume of cash transactions in banking halls has not reduced. Electronic payment outside banks is non-existent in most cases. The informal sector, whose operators have less than two weeks to adjust or face the 10 per cent penalty for non-compliance, if they must continue to enjoy banking services, is most affected.

Spokesman of the Central Bank of Nigeria (CBN), Muhammed Abdullahi, admitted the policy comes with some challenges, which are surmountable.

“There are hitches here and there, which the CBN in conjunction with the Bankers Committee and other stakeholders are working hard to remove. Capacity is not at optimum level at this moment but we are improving by the day,” said Abdullahi via SMS.

Starting from April 1, daily cumulative withdrawals and lodgments in banks by individuals and corporate bodies would be limited to a maximum of N150, 000 and N1, 000,000 respectively. Penalty fees of N100 per extra N1, 000 and N200 per extra N1, 000 will be imposed on individual and corporate defaulters in that order.

Aside the usual publicity campaigns embarked on by commercial banks to draw attention to relevant products, investigations show that the quality of e-payment platforms has rather nosedived.

For instance, inter-bank cash transfer operation has suffered serious setback. Customers complain that it takes upward of four days in most cases before transfer process can be completed.

In a particular instance, transfer was made from one of the recently acquired banks to an old generation player. It was learnt that the fund (about N700, 000) transferred on March 2 was not credited to the receipt account until March 9. Meanwhile, the originating account, a corporate body, was debited on March 4.

“At a point, I began to doubt if the transfer was actually made. I visited my branch several times. It got to a stage that I was given a sorting code to send to the bank the money was transferred from. I thought the two banks should have sorted that out but I turned to be the one running around with the code,” narrated a victim.

Automated Teller Machine (ATM) service, the most popular electronic transaction medium, has also suffered deterioration in the past months. The problem of debiting without dispensing is still rife. Customers, sometimes, suffer untold hardship to have their money refunded notwithstanding a Central Bank’s policy that stipulates specific period of time within which such complaint must be resolved. The situation is worse when the card issuer and ATM operator are different.

Still, ATM points across Lagos have continued to suffer incessant network failure. A certain bank routinely sends notice to customers informing them of its plan to upgrade service. Customers say such notice is mere public relations scheme because “there is no week its service doesn’t experience major breakdown even when there is no notice.”

While the CBN has not heeded the widespread call for a review of the cash limit policy, investigations show that individuals have not changed their cash dealing habits as well. A senior banker said: “We have not experienced any change in the mode of transactions by customers. In any case, banks have nothing to lose if they don’t comply; we will rather gain from the charges.”

Amid uncertainty surrounding the effective take-off of Cashless Lagos, recent acquisitions in the industry might have met technical hitches. Customers still need to identify their old banks, which have been rebranded by new owners in order to carry out seamless transactions.

In the wake of recent recapitalisation crisis, Ecobank Transnational Incorporated acquired Oceanic Bank Plc, merging its operations with Ecobank (its subsidiary) while Access Bank Plc consumed Intercontinental Bank Plc.  Corporate rebranding of Oceanic and Intercontinental has been done.

What might not have been perfected yet is full software reconciliation. Respective customers are often disappointed to discover that it takes longer time to deposit or withdraw when they choose to do that outside their old bank.

A customer, who was delayed beyond closing hours two weeks ago was told the money might not be posted until two days later because of a challenge bank officers described as ‘poor link access.’  “It is unfortunate that accounts were not fully reconciled before the rebranding took place. I have about N1.5m to pay, which should get to the owner before tomorrow morning; now you can’t collect. Who pays if I lose this money to robbers now that I can’t get to the right branch today to lodge the money?” he questioned.

Also, months after text messages were sent to customers that ATM services of the affected banks had been unified, customers still have to search for their ‘banks’ to get better service.

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