On Thursday, the Central Bank of Nigeria (CBN) and payment industry stakeholders outlined steps to combat fraud and transform the industry.
Aishah Ahmad, the CBN’s deputy governor for financial system stability, discussed regulatory goals to enhance Nigeria’s payment system at the BusinessDay Future of Payments and Fraud Conference in Lagos.
“As a result of the rising digitalisation of finance, the role of operators can be considered as a catalyst for the shift of Nigeria’s payment space,” Ahmad, the chairman of Nigeria Inter-Bank Settlement System Plc, stated.
According to her, innovation is recognized as a critical lever for achieving substantial progress in this area.
“While financial inclusion in Nigeria continues to expand, the Central Bank of Nigeria has set an ambitious goal to enable competition in the fintech industry, which promotes digital financial services,” Ahmad said.
She emphasized the necessity to identify and license new innovative players in order to bring them inside legal constraints, as well as the construction of a framework to comprehend new player markets.
Another priority, according to Ahmad, is to achieve financial inclusion and democratized access to high-quality, affordable, and cost-effective financial services for all Nigerians by addressing issues such as identity management, neutral financial access points, payment system operability, electronic payments, and open banking.
She believes that a framework for self-regulation would complement the regulator’s efforts to increase cyber resilience, corporate governance, and operational risk standards across the fintech sector.
Improved access to credit through the construction of appropriate supporting infrastructure, such as a credit scoring module, she said, would go a long way toward improving Nigeria’s payment business.
“The payment system change would help Nigeria achieve its goal of integrating a diverse range of people into the financial ecosystem. Customers would benefit from more efficient services at reduced prices, while banks will become more efficient with lower costs and more resilience, according to Ahmad. “In addition, credit will be expanded where it is most needed, particularly for consumers and small enterprises, and the financial system will be more inclusive in depth and diversity.”
Usman Belel of FCID Alagbon, Nigeria Police Force, citing NIBSS data, reported Nigerian banks lost N3.5 billion and N5.2 billion to fraud in the third and fourth quarters of 2002.
“We’re trying to see whether there’s a way for the courts, banks, and law enforcement to work together,” he said.
According to Mobolaji Oriola, senior partner at Allen & Brooks, the Federal High Court has over 100,000 fraud cases pending.
He explained that this was due to the expansion and use of electronic payments by corporations and commercial enterprises, emphasizing the importance of integration in order to construct a fraud firewall.
“We need to establish a whistleblower policy, govern operations, and guarantee that organizations have appropriate technological assistance, security professionals, and expertise to monitor electronic processing and other sensitive transactions function constantly with incorrect security checks,” Oriola added.
Contactless payment, according to Andrew Uaboi, country manager at Visa, is the next frontier in the Nigerian Fintech and payment ecosystem.
Contactless payment eliminates the need for cash or even swiping a credit card. While checking out, you must tap or hold your contactless card or smartphone near a suitable card reader.
According to Uaboi, the innovation would aid small business growth as well as individual business success.
“Contactless payment has increased significantly since the COVID-19 era,” he stated. One in every six people in the United States testified that they made their first contactless payment during the COVID last year.
“We’ve also witnessed a 40% increase in contactless payment year over year, and all of this payment is allowing small businesses.” It allows for the expansion of both individual firms and economies.”
Visa, he claims, is working with the Nigerian government, the Central Bank of Nigeria, and other partners to create a structure that will allow contactless to flourish in Nigeria.
He said that the new innovation’s excellent security will help to prevent fraud and other financial crimes.
“I can guarantee you that it is extremely safe. It’s just like paying at a PoS machine with your standard cards. It even has certain additional security elements that allow us to ensure that transactions are not fraudulent,” he explained.