Omoh Gabriel
30 September 2005
Lagos — VISA International has taken on 14 Nigerian banks and Valuecard Nigeria PLC to offer its services in Nigeria. The banks are: Access Bank Plc, Afribank Nigeria Plc, AllStates Trust Bank, Diamond Bank Plc, Ecobank Nigeria Plc, First Bank of Nigeria Plc, Guaranty Trust Bank, Oceanic Bank International Plc, Prudent Bank Plc, Standard Chartered Bank of Nigeria Plc, United Bank for Africa Group, Union Bank of Nigeria Plc, Wema Bank Plc, Zenith Bank Plc and ValuCard Nigeria Plc.
Mr. Gavin Young, Visa International's representative in Nigeria, said yesterday that the banks were selected based on the N25 billion capitalisation prescribed by the Central Bank of Nigeria (CBN).
His words: "This is a very exciting time for me and for payments systems in Nigeria. It's exciting for me because I'm now based here in Lagos. It's also exciting because, with ValuCard and the Nigerian banks, Visa is currently building the foundations of the Visa payment system in Nigeria.
"We're building a payment system that's right for Nigeria, -- it uses the latest technology. It's in line with international standards. It is built with appropriate risk management systems. It's a system that will facilitate a whole range of payment solutions: international and domestic, debit and credit; payments in shops, payments on the internet and payments on mobile phone. Whilst some services may not be introduced immediately, we are building a payment system that is future proofed.
"One of the 'value-added' services we will soon be providing is a Nigerian National Net Settlement Service, essentially providing Nigerian banks with a dedicated processing service for domestic transactions. It will give the banks lower costs and an increased flexibility. It will also provide for all Visa transactions between Nigerian banks to be settled and priced in Naira.
"What I want to do today is to give you an overview of what we've achieved so far; make a small but significant announcement today; and to give you an idea of what's to come. But first of all, some of you may not know much about Visa, so let me tell you a bit about the world's leading payment system.
Visa International is a service association owned by, and comprised 21,000 member banks. These banks have issued over a billion Visa cards worldwide on which $3 trillion per year is spent in over 150 countries.
"Visa's role is not to a make a profit but to provide payment solutions for its member banks, enabling them to issue cards and process merchants' Visa card transactions. The Visa products issued by the banks are safer, more convenient and more efficient than cash. Furthermore, they help to bring people into the banking system and to increase the funds available for commercial loans, the lifeblood of a growing economy.
"Payment cards also help to replace inefficient cash. The costs of cash are high -- the Central Bank estimates that it costs seven Naira to produce a five Naira note. Then that note needs to be transported, secured and counted every time it is used. Electronic payments are far more efficient and can deliver significant cost savings to banks, merchants, employers and governments.
"So that's a little bit about Visa, and the role we have to play. Since agreeing to invest in ValuCard, we have worked with the owners and management of ValuCard to complete the transaction and to upgrade ValuCard's systems to allow Visa cards to be issued and processed here in Nigeria. Both systems have been installed, are currently being tested and will be fully operational soon.
"Once they are ready, we will begin to see the first Visa cards being issued and an increase in the number of places where Visa cards can be used to shop or withdraw cash. Over time, we will see an increase in variety of payment solutions -- we'll see cards that suit every Nigerian.
"I am pleased to announce today that there are a total of 14 banks which are members of Visa International Services Association. Including ValuCard Nigeria Plc, which is a principal member, the total number of Visa members in Nigeria is 15."
"Each member of Visa is both a customer and an owner. Visa's role is to help its members provide payment solutions to their customers. Visa doesn't provide merchants with the terminal that enables them to accept Visa cards -- ValuCard and the banks do. Visa doesn't issue any cards -- they're all issued by the banks. It's a partnership. Visa plays an important role, but without the banks there would be nothing. So this list of banks represents a key part of our plans. I know the banks are keen to move forward and to issue cards."
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