PoS use to rise despite transaction failures
Point of Sale (PoS) machines deployment will continue to rise in the coming months to serve new entrants into the digital banking space.
Many cardholders, especially at the grassroots, previously cautious about digital banking and safety of their funds are embracing the scheme despite challenges.
The Central Bank of Nigeria (CBN) expects PoS deployment and use to rise in the coming months as more people embrace the digital payment option.
Analysts said two channels have for long dominated the digital banking space- mobile banking and PoS services. They all form part of the digital banking network, the new route that financial service providers and regulators are traveling to offer seamless services to the banked, and encouraged the unbanked and underbanked to join the financial services net.
However, in recent months, card-holders have faced poor network connectivity and transaction failures that take weeks and months to resolve.
The Unstructured Supplementary Service Data (USSD), which for years dominated the payment space are failing across major networks and banks.
The Central Bank of Nigeria (CBN), Nigeria Inter- Bank Settlement Systems (NIBSS) Plc partnership to inaugurate the National Domestic Card Scheme for the Nigerian market is expected to provide support for cardholders.
The move aligns with CBN’s mandate to promote stability, inclusion and growth in the financial and payment system.
The card scheme will be launched on January 16, 2023.
In a statement, CBN Director, Corporate Communications, Osita Nwanisobi, said the proactive policy initiatives of the CBN have driven the accelerated adoption of digital financial services in Nigeria.
He said the national domestic card scheme shall be delivered through the Nigeria Inter- Bank Settlement Systems (NIBSS) Plc, Nigeria’s central switch, in conjunction with the Bankers Committee and other financial ecosystem stakeholders.
“It will foster innovation within the Nigerian domestic market, while enabling African and international interoperability, allowing banks and other institutions to offer a variety of solutions including debit, credit, virtual, loyalty and tokenized cards amongst others,” he said.
“Considering the strength and breadth of its banking sector and the rapid growth and transformation of its payments system over the last decade, Nigeria is ideally positioned to successfully launch a national card scheme,” he said.
He said Nigeria remains the most vibrant economy in Africa benefiting from the pace of digitisation and innovation, alongside the expansion of mobile penetration.
“Building on this platform to accelerate financial inclusion requires infrastructure that can deliver lower cost payments services that are more accessible and affordable for Nigerians. Domesticating our card scheme also enhances data sovereignty, enabling the development of locally relevant products and services and reduces demands on foreign exchange,” he said.
Nwanisobi explained that scheme can also be leveraged as a platform for the seamless dissemination of government-to-person payments and other social impact initiatives, enhancing financial access and supporting the growth of a robust and inclusive digital economy.
“Nigeria joins a growing list of countries – India, Turkey, China, and Brazil as leading examples – which have launched domestic card schemes and harnessed the transformative benefits for their respective payments and financial systems, particularly for the underbanked,” he said.
“The CBN recognizes the significant benefits from delivering Africa’s first central bank-driven, domestic card scheme, which, when delivered at scale, has the potential to become the largest in Africa, and one of the largest in the world”.