The Payments System Vision 2020 (PSV2020) initiative of the Central Bank of Nigeria (CBN) has been described as a catalyst in the revolutionised payment system landscape of the country.
Besides, it has been assessed to have facilitated economic activities, by providing safe and efficient mechanisms for making and receiving payments with minimum risks to the central bank, payment service providers and end users, extending the availability and usage to all sectors and geographies, banked and unbanked, and conforming to internationally accepted regulatory, technical and operational standards.
Godwin Emefiele, CBN governor, who made the observation at the inauguration of the Payments System Strategy Board, Scheme and Initiative Working Groups, reiterated that the core objective of PSV2020, was to make our payments system “nationally utilised and internationally recognised”.
He added: “It is gratifying to note that our country is not only acknowledged as a major economic force within Africa, but also increasingly becoming an active player in the global economy and to participate actively, our payments system must be successfully benchmarked against the global best practices.”
Emefiele noted that through the implementation of the original PSV2020 initiatives by the CBN, in association with the banking community, Nigeria has witnessed an impressive growth of electronic payments and a shift from the overwhelming dominance of cash as a means of payment.
He listed the implementation of the Nigeria Uniform Bank Account Number; deployed the real time gross settlement systems where transfer of money or securities takes place from one bank to another on a “real time” and on “gross” basis, without waiting period; and the popular cash-less policy.
Others were the deployment of deployment of the Scripless Securities Settlement System; introduction of Cheque Truncation, which reduced clearing cycles for Automated Clearing House payments and cheque from three days (T+2) to next day (T+1); and enthronement of limits on encashment of third party cheques and a maximum cap of N10 million for cheque payments, to encourage the use of electronic payments channels.
There were also the adoption of mobile money as a major channel for delivering financial inclusion; support for the implementation of the Federal Government’s Treasury Single Account; and migration of all payment cards from magnetic stripe technology to Chip-and-PIN, otherwise known as EMV, due to the assessed weaknesses of the former.
According to him, though the system has recorded some significant achievements so far in this journey, a lot still remains to be done and we do not intend to rest on our oars.
However, the new focus, which emerged from a detailed assessment of the Nigerian payments infrastructure, identified eight new industry verticals aimed at advancing the adoption of the electronic payments in Nigeria.
The CBN chief pointed out that in agriculture sector, the focus would be to develop electronic payment methods to support the value chain from inputs to tertiary production and supply, while a cashless model for Smart Cities will be developed.
For the smart cities scheme, the focus will be on both existing cities and “greenfield cities”, to ensure that less cash is used as a means of payment in retail outlets, transportation, and food.
Government’s cash flows would be reformed to ensure adoption of end-to-end electronic channels for all forms of salaries, pensions, suppliers, individual & business taxes payment and collection of revenues by private and public sector organisations.
In hotel and entertainment, there would be need to work with key pilot hotels and other key entertainment venues such as restaurants, cinemas, sports centres to promote the cash-less initiative.
Under the transportation sector, he said the new focus would develop strategies for getting the public to pay for transportation (inter-city and intra-city) electronically, while a pilot implementation would be organised with various transportation companies.
Expressing confidence on the success of in the transport sector, he said that a lot of traction has been gained on this initiative on air transportation, while a lot still remains to be done on land, water and rail transport systems.
Other areas of focus include education, health and bill payments and direct debits, by designing and developing channels with components such as grants, scholarships, consultancy services, Internally Generated Revenue (IGR), tuition and administrative fees, provision of personal and medical information and payments for health and medical services and driving the current initiative for bill payments like insurance, pensions, telecommunications, Cable TV and utilities to conclusion.
To achieve these, CBN invited nominations from the stakeholders for capable people to serve in any of the new Initiative Working Groups, one for each industry vertical, comprising the user community, banks and other service providers.
The groups will work on the principle of identifying quick wins for an initial period of two years, with an option to extend for another two-year term, subject to the level of achievements.