General News
Digital merchant payments can help de-risk local business environments: here’s how
By Murray Gardiner, Managing Director, Bluecode Africa
Over the course of the past 12 months, the world has learned a lot about uncertainty. The financial space is no exception, having gone through the kind of ructions not seen in nearly a century. As governments around the world look beyond recovery and towards avoiding a similar crisis, financial regulators will look to take the risk out of their local financial markets and payment systems.
The Covid crisis has highlighted the risk of an increasingly perilous debtor book. This usually implies increasing capital adequacy and provisioning requirements and increasing the audit and fraud detection controls. Further consolidation can be expected. But one particularly poignant impact has been related to fraud with the spike in online transactions. Securing online payments and mobile banking channels has never been more urgent.
Tightening credit and doubling down on legacy payment security will have an economic dampening effect as African markets plunge into recession. A powerful tool that regulators have to respond to this crisis is by encouraging in-country digital merchant centric payments to focus on stimulating the local SME and informal business sector. Doing so not only improves the efficiency and security of payments, the digital transparency deepens the relationship between banks and business which in turn is good for consumers and producers alike.
Benefits from SMEs to Financial Institutions
One of the biggest benefits in-country digital payments have when it comes to de-risking local business environments is that they bring a greater degree of transparency and formalisation of the financial relationship between the bank and the SME.
In the SME space, for example, the advantages include contactless payments, instant access to funds on acceptance of payment, and digital transparency with their acquiring bank. The digital transparency and reliability of the in-bound receipts from digital payments to the acquiring bank promotes access to a wider range of financial services (insurance, savings, credit facilities, EFT payments) and establishes a business track record with suppliers and other service providers. A bank that can see the SME’s cash flow and rely on regular inbound payments can safely extend credit and other essential services that it could not reasonably do otherwise.
It also gives businesses a chance to open new sales channels, such as e-commerce and sales agent networks, and to offer value-added services to promote customer loyalty, sales campaigns, and partner programmes.
Importantly, these measures bring a greater degree of stability to these businesses and their workers, further helping the economies they operate in to reduce risk.
Financial institutions, meanwhile, benefit by being able to use digital transparency and data to understand the business and reduce lending risk and cost, increasing the size of the addressable market. Technology reduces the transaction costs associated with onboarding merchants as customers and creates a data-rich relationship that turns a thin file client into a data-rich client that is bankable. Digital merchant payments are a gateway to more comprehensive and conclusive finance to support and stimulate the productive economy.
Regulation and incentivisation
This is why it is important that governments embrace digital merchant payments on account rails, away from cards in a local scheme governed by local rules. This is a gateway to more comprehensive and meaningful finance to support growth and development of the productive economy.
It is often cited that digital disruptors run ahead of legislation by finding ways around the rules that were not anticipated when the rules were designed. The South African Reserve Bank has recently warned about a new activity with “Instant EFT start-ups that use a practice called “screen scraping” where a third-party is given access to a consumer’s bank account data and acts on behalf of said-consumer, using that consumer’s online banking access credentials to simulate instant clearing.
It’s important that regulators protect consumers and the confidence the public has in digital payments and needs to set parameters for the kind of digital payments adopted in their markets. Payments must be safe and customer data must be protected. But the payment also has to be sufficiently valuable to merchants and profitable enough for the financial institutions to build a meaningful commercial financial relationship bringing the merchant into the formal economy and create a merchant customer.
Minimising risk
While it’s impossible for regulators to totally eliminate risk particularly from unpredictable “black swan events” such as we have experienced in 2020, they can prepare payment systems for shocks and defend financial markets by encouraging transparency and financial inclusion with secure account rail digital payments.
While in-country digital merchant payments are just one measure, their use is one of the most powerful ways of generating growth in the local economy and “lighting up” the shadow economy. Ultimately, a local digital payment on the account rail can prove vital to a more comprehensive and conclusive impact to stimulate the productive economy.
Salesforce, the world’s #1 AI CRM, today revealed new data showing holiday retail sales surged to a record $1.2 trillion globally and $282 billion in the United States, but high returns could dampen overall profit margins.
The report indicates that the better-than-expected holiday shopping season was powered by surges in mobile and social commerce alongside increased consumer spending after months of saving in the first half of 2024.
However, shoppers have already sent back $122 billion in merchandise. Both consumers and retailers leaned into the use of AI and agents to enhance holiday shopping experiences through product recommendations and personalised order support, influencing $229 billion – or 19% – of all online orders.
“Retailers had a robust holiday season, but a 28% rise in the rate of returns compared to last year is a cause for some concern,” said Caila Schwartz, Director of Consumer Insights at Salesforce. “Retailers who have embraced AI and agents are already seeing the benefits, but these tools will be even more critical in the new year as retailers aim to minimise revenue losses on returns and reengage with shoppers.”
Salesforce data, based on an analysis of 1.5 billion shoppers and 1.6 trillion page views across the Salesforce Platform, highlights trends that shaped the holiday season, including:
Online sales and order growth reached new peaks:
Online sales reached $1.2 trillion globally and $282 billion in the U.S. This represents a 3% global year-over-year (YoY) increase and a 4% YoY increase in the U.S. Online sales also grew 1% YoY in the European Union (EU).
Retailers harnessed the value of AI and agents:
$229 billion of global online sales were influenced by AI and agents in the form of product recommendations, targeted offers, and conversational customer service support.
19% of holiday purchases were influenced by consumers engaging with AI and agents, a 6% increase from 2023.
Retail use of generative AI features like agents increased 25% during the holiday season compared to September and October in 2024.
Shoppers used AI- and agent-powered chat for customer service 42% more than they did during the 2023 holiday season.
The rate of returns rapidly increased:
More than $122 billion of global purchases have already been returned, up 28% from last year.
This increase is partially due to trending consumer behaviors like “try-on hauls” and bracketing (buying an extra size above and below your standard size).
Salesforce projects that retailers will likely see this number grow to $133 billion – presenting an important opportunity for brands to use agents to make the returns process easier and more tailored to specific customer needs.
Social commerce grew its influence on shoppers:
Retailers using social commerce strategies saw 20% of global holiday sales generated through platforms like TikTok Shop and Instagram.
Social media as a traffic-referring channel also grew 8% YoY, driving 14% of all traffic to ecommerce sites during the season.
Lagos State Internal Revenue Service (LIRS) has issued a reminder to all employers in Lagos State to fulfill their statutory obligation to file annual tax returns for the 2024 financial year on or before January 31, 2025.
This requirement is in line with the Personal Income Tax Act (PITA) Cap P8 LFN 2004 (as amended).
In an official statement, Dr. Ayodele Subair, the executive chairman of LIRS, emphasized that meeting this deadline is a legal obligation.
He warned that failure to comply will result in statutory sanctions, including penalties, as prescribed by law.
Section 81 of PITA mandates employers to submit comprehensive annual returns detailing all emoluments paid to employees, including taxes deducted and remitted to relevant tax authorities.
These returns must be filed no later than January 31 each year and cover the income and taxes paid during the preceding year (2024).
Dr. Subair stressed, “Employers must prioritize the timely filing of their annual income tax returns to avoid penalties. Submitting returns on or before the deadline ensures compliance with the law and supports accurate revenue tracking, which is essential for Lagos State’s fiscal planning and sustainability.”
To simplify the process, LIRS has transitioned to a fully digital filing system. Employers must file their annual tax returns exclusively through the LIRS e-Tax portal.
Manual submissions are no longer accepted. Mr. Subair described the e-Tax platform as secure, user-friendly, and designed to provide employers with a convenient way to manage their tax obligations.
Employers are reminded to include the Payer ID of all employees in their returns. Employees without a Taxpayer ID are advised to generate one immediately on the e-Tax platform to prevent disruptions during the filing process.
To assist employers, LIRS has deployed staff across its offices to provide guidance on using the e-Tax portal and addressing related concerns.
Employers are encouraged to act promptly to meet the deadline and ensure compliance with tax laws.
General News
Nigeria Recovers $52.88m in Assets Linked to Former Petroleum Minister Diezani Alison-Madueke
Federal government has received $52.88m recovered Galactica assets linked to a former Minister of Petroleum Diezani Alison-Madueke from the USA.
The Attorney-General of the Federation and Minister of Justice Lateef Fagbemi disclosed this at the formal signing ceremony of the asset agreement between Nigeria and the United States of America in Abuja on Friday, January 10.
While speaking at the ceremony, Fagbemi explained that $50m of the recovered assets will be deployed through the World Bank to the development of the rural electrification project and the remaining $2m will be deployed to the International Institute of Justice to expand the Justice system and also counter corruption.
Speaking further, Fagbemi noted that the asset return marks a milestone in the ongoing collaboration between Nigeria and the United States in combating corruption and upholding the rule of law
He said the event is also a significant effort by President Bola Tinubu to address the issue of corruption.
Meanwhile, in his remarks, the United States Ambassador to Nigeria Richard Mills called for the monitoring and effectively utilizing the recovered assets by the Ministry of Justice to benefit Nigerians.
Diezani served as Minister under the Goodluck Jonathan administration.
SERAP Drags FG, Govs to ECOWAS Court over ‘Misuse of Cybercrimes Act’
Suspected Lakurawa Terrorists Kill 3 Telcoms Workers in Kebbi
GAIM 6: Fidelity Bank Rewards 10 Customers with N10m
BudgIT Queries Irregularities in FG’s Proposed 2025 Budget
Lagos, NIPOST Partner to Transform e-Commerce Delivery
MTN Nigeria Renews Spectrum Lease Agreement with NTEL
NERC Discloses $5.7 Million Debt Owed by International Customers for Q3 2024 Electricity Supply
A beginner’s guide to Temu: Your ultimate shopping companion
CBN, SEC Approve FCMB Group’s N147bn Rights Offer
Corporate Blackmail, My Story as a Case Study, by Leo Stan Ekeh, Chairman Zinox Group
General News2 days agoNigeria Recovers $52.88m in Assets Linked to Former Petroleum Minister Diezani Alison-Madueke
E-Business2 days agoCybersecurity Firm Warns of Phishing Threats Targeting Telegram Premium
General News2 days agoTransform Your Health with QNET’s BELITE 123: The Ultimate Weight Management Solution
Telecom3 days agoNigeria Has World’s Most Affordable Data Costs – GSMA
General News2 days agoTikTok Announces Plans to Cease Operations in the U.S. by January 19, 2025
E-Financial11 hours agoBudgIT Queries Irregularities in FG’s Proposed 2025 Budget
E-Financial11 hours agoNAICOM Seeks Police’s Support to Enforce Third-party Motor Insurance
E-Financial11 hours agoGAIM 6: Fidelity Bank Rewards 10 Customers with N10m