Tunde Ogungbade is the managing director of Global Accelerex. He spent the first decade of his career in consulting and has worked with global companies like Price WaterCooper, Ernst and Yong and other companies in UK, USA and Nigeria. He spoke to chike onwuegbuchi on issues around CBN e-payment policy as well as value his company is bringing to the e-payment space.
Global Accelerex is a company that is a player in the e-payment industry. We focus primarily on solving business problems through our value added services. A lot of things have transpired over the last several years in the e-payment industry in Nigeria but the question that needs to be answered is how do we bring value to the consumers and retailers? Global Accelerex is focused primarily on looking at how industry solutions can be created to bring value to the retailers and consumers so that adoption can be easy, the industry itself can expand and the penetration that everyone is hoping for can be achieved.
Role in the CBN e-Payment Policy
Our role is multifaceted. If you look at that policy, it talks about merchant acquirers, issuers, payment terminals service providers (PTSPs), card distributors and suppliers. There are different people in that ecosystem; we do not play one role, we play multiple roles so we do not identify with a specific role in that regard. However, we have terminals that we market, that we exclusively planned and designed to address the purpose in this market so you can call us a PoS terminal supplier. We also can be classified as a payment terminal application developer because we create value added solutions. You can also call us a PTSP because we focus on the deployment side of PoS. How do you make it operational beyond just dropping the PoS, how does the merchant or the retailer and the consumer get value out of it? We are looking at industry solutions to solving problems. A case in point is retail, how do you create loyalty around that so that the consumer can come back. We are beyond just supplying PoS terminals as a distributor, we are beyond just focusing on deployment side, we are looking at the whole ecosystem and creating value by fixing those different labels in the guidelines.
Solving Business Problems
For example what happens today is that a bank is in partnership with a PTSP and in trying to get people to use the PoS, what do they do? They get the PTSP help with the deployment, they get the software, they do the deployment, drop it off and hope that retailer starts using it and derives value from it. Let’s look at what happens- the value chain. The retailer is thinking, number one- I don’t need this thing, there is a policy that is forcing it on me but I don’t need it. Number two, it is cutting into my margin and at the end of the day I would be paying something to use the system. Number three, the consumer is not really attracted to this thing and it is going to take me a long time to bring value. If you look at the value chain itself there are disincentives across it. What we are saying about solving business problem is that we are looking at creating solutions that thinks about the consumers; thinks about the retailers, thinks about the bank, thinks about the whole needs and infrastructure and how everyone can have a win-win collaboration in that space. How do we do that? We look at something that has been tested and that is loyalty management. How consumers can feel with an incentive not to bring out cash and bring out a card. We are looking at that as we look at the different industries that we deploy PoS terminals to. If you are in a retail shop, we look at what will make you come back to that retail shop, such as having a sales promotion tending towards getting a discount. We are looking at the whole ecosystem.
For the banks, we are saying I’m helping you grow people who will bring float to your account so that you can then operate profitably. Everybody across the chain needs to get value out of it and there are solutions that we have created that specifically addresses that problem and that is what we mean by value added solutions.
How Positioned Are You to Deliver?
We have a business platform and we run it on an infrastructure that is scalable, the scale is what we thought of from the ground to up because we want to ensure that as people come en mass on our platform, it can deliver the service. One of the challenges for PTSPs today is that there is no infrastructure for the support. There is need for retailers to know that there is a phone call away and someone can provide them service quality and assurance.
We are bringing excellence in service delivery on the platform which means we have resources and people that have been trained to deliver the service in a way that tracks things from cradle to grave. We are not just thinking about installing the PoS but what happens throughout the PoS lifecycle, how is it working for this merchant. Customer service experience is important. On the platform side, we deliver value added services so much so that a retailer can hold a platform and know what happens and also what will happen as far as forecasting is concerned. That is what we are talking about.
Challenge of Infrastructure Support
It will affect our service but we are working very closely with Mobile Network Operators (MNOs) in looking at different ways of providing infrastructure support. Technology always goes through the time it was first deployed and the time it starts working. That is happening today in the industry. We are doing some research and development, specifically on the CDMA side to make sure as we are planning our geographic deployments, we are looking at the difference in topology of distribution and coverage of mobile networks services so that, that can be part of our deployment strategy. We know that the challenges are here today but technology will leapfrog it so when the GSM towers can accommodate everybody plus these PoS terminals. The question that needs to be answered at that time would be how am I getting value out of it and we are preparing for that because we will overcome the technology challenges.
Assessment of Cashless Policy
My assessment of it is that the infrastructural challenges are there and can hinder or create a bias in the minds of two key and very relevant voices in this whole thing which are the retailers and the consumers. I think the ongoing awareness can help on one side, the regulators are aware of that and I am sure the CBN, NIBSS and all other players involved are doing everything to educate consumers and the retailers that this is no difference between what is happening with your phone call, it is the same problem. It is a capacity issue and as the industry deals with that or looks for alternate technology that can allow data to access towers separate from voice, technology will be overcome.
There is a better technology the industry should be thinking about which is the economic impact. When you think about the economic impact, there should be some alliances between regulators to try and provide the capital to build the infrastructure so that the industry can thrive. The whole tower arrangement that brings about these problems is a capacity problem. If you are going down the Third Mainland Bridge at 4pm, the problem is capacity but at 2pm, the traffic is not there. How many people are trying to come on at the same time and how do we plan for that? Regulators can think about the benefits of this cashless policy, the liquidity that it creates and the amount of money coming into the banking system as pay back to create an incentive to look at regulators encouraging mobile network operators to invest in expanding capacity to accommodate PoS terminals to function well because on one hand, there is a disincentive on their side because there is no incremental revenue with the small data traffic on their networks.
We have exclusive partnership with a company called XGD, which is one of the top 10 PoS manufacturers in the world. We have partnered exclusively with them, we have inspected their facilities physically, although they have the capacity to meet the Nigerian market demand and their PoS device is one of a kind. We know that it is able to provide three solutions in one. It provides Near Field Computing (NFC), it has the ability to take a scan and also provides biometrics. Why is that important? Another thing that hinders technology is- Is someone going to take my money? Biometrics answer that question. Another thing that can help retailers is the fact that they can also determine prices upfront. That device has all these capacities. Obviously, there is an enhancement but the device itself provides the printing capacity. The possibilities with the application are numerous and we have ability to use the software development kits to create variety of solutions that can address a number of things from the market place.
Transaction Led and Non Transaction Led Services
We understand that sometimes the business problem might not involve a transaction which is what we call business intelligence. We have some segments of clients that we’ve engaged with that have need for intelligence that is not transaction based and we have specific solutions because we bring expertise not just technology. We have expertise in logistics, marketing and we are fusing all those key points together to create value added services to some of our clients that have that need.
If it is payment based, we will address the problem through business intelligence to add value to what they do.
On the other hand, there are some people that need to have a transaction to be able to provide intelligence and we look at that as well. These things are uniquely tailored to clients needs. What we do first is listen to the client. We bring value. We understand the business as far as the industry is concerned. Is it in the manufacturing sector, we have strength in that area. We have people who understand the business language; we have analysts and thought leaders in that area.
e-Payment in Nigeria
It is a journey; it is not a sprint, it is a marathon and we are getting there. The dynamics to win this ecosystem is going to evolve over time but we can start recording some early success. One of the things we believe would happen is rapid adoption like consumers taking on the likes of facebook approach to e-payment. When people go to the bank to get a card we believe that there is going to be value created for them beyond spending cash and that is what is happening. It goes viral like a social media group just as everybody wants to get on facebook. Same thing must happen and how is it going to happen? We the industry must look for innovative ways to attract the retailers, to bring them and say there is something worthy of saving the time to go to the ATM to withdraw cash to give to another person who needs to put it in another person’s account. That can happen electronically. Loyalty and innovative business services would make consumers want to use it. We have started going in that direction and I believe it would happen.