Central Bank of Nigeria and the Committee of e-Banking Heads are set to partner with other stakeholders in the financial sector to mitigate the spate of electronic fraud in the country. As a result, the CBN said it would adopt a more collaborative approach towards achieving improved regulation of the nation’s payment system.
These were contained in a communiqué issued after a special conference organised by CeBIH in Abuja recently.
The Deputy Governor, Operations Directorate, CBN, Alhaji Suleiman Barau, who highlighted a paradigm shift in the regulation of the payments system, said the central bank would adopt measures aimed at facilitating the achievement of the objectives of the Payment Vision 2020.He added that the CBN would also promote self regulation among
e-payment schemes. He therefore called on participants at the conference for ideas that could further strengthen the nation’s payment system. He said, “Let me also highlight that the Central Bank of Nigeria has indicated a shift in its payments system regulatory stance. The bank through the Payments System Vision 2020 signified a more collaborative approach to overseeing the national payments system through certain recommendations.
“These include: the strengthening of the scheme governance structure to reflect the significantly greater responsibility of the scheme management, covering all aspects of risk, business management and operational resilience; the setting up of scheme management board which has the responsibility to complete an annual self-assessment against the benchmarks. “The significance of this is that self-regulatory principle is being embraced by the Central Bank of Nigeria. This is intended to foster discipline among participants and enhance compliance level to regulations. It is however, in no way an abdication of the overseer role of the Central Bank of Nigeria for the national payments system.”
According to the communique, the objective of the central bank is to facilitate economic activities by providing safe and efficient mechanisms for making and receiving payments with minimum risks to the central bank, payments service providers and end users.
International and local e-payment experts including officials of the Nigeria Interbank Settlement System present at the conference emphasised the need to review the policy regulatory environment of the nation’s payment system, in order to improve on the progress recorded in the adoption of electronic payment in the country.
The communique also quoted the Chairman, CeBIH, Mr. Tunde Kuponiyi, as stating that improved regulation would enhance prosperity and innovation in the financial sector.
“It is worthy to note that for the industry to prosper and for innovation to thrive, a sound and complementary regulatory framework is very much required,” he said.
“Such a framework should provide a level playing field for all players to enable the customer to exercise his choices as regards choosing a particular service provider; such a regulatory framework would also encompass customer protection issues, fraud prevention issues, security related issues and fair pricing,” he added.
According to a global retail payment expert, Mr. John Chaplin, regulation is critical to sustainable competition which is necessary for the growth of the payment industry.
The communiqué quoted him as saying that, “Frequent rule changes are a sign of bad regulation and deter investment, the industry must actively work with regulators to achieve a good outcome. Clear, consistent, even-handed and risk-based regulation is the goal.”
“Leaving the market to market forces will lead to higher cost, which would drive out everybody. Hence the aim of regulation should be to drive down cost”.
CeBIH chairman, Kuponiyi, further emphasised the need to extend e-payment to the unbanked in the country, saying, “a substantial portion of the population is still outside the realm of the formal and modern payment system.”
“In this endeavour, educating customers on the security comfort afforded by the payment products and the measures required to be taken by the customers for minimising fraud and misuse should also be an integral part.”
The communiqué also noted that the current model for Point of Sales terminal deployment was not sustainable.
The conference expressed worry over the issue of Pos terminals’ interoperability, non-uniformity of standards, the number of parties in ecosystem with huge impact on the cost of operations and profitability, as well as the proliferation of terminals at merchant locations.
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