Nigeria: Improving the Card Payment Space

4 October 2019

In this report Ugo Aliogo writes about tefforts of First Bank of Nigeria to improve the card space with the newly launched Visa Debit Multi-Currency card

Card payment is still a new phenomenon despite increased adoption by financial technology companies (FinTechs) and banking institutions.

Cash payment has remained the most trusted channel but due to the disruptions constantly experienced, the level of customer confidence and trust can be argued to have dropped.

Stakeholders in the card payment space have argued that despite the increased number of online payment gateways in Nigeria, market regulators have not made impressive efforts to mitigate the challenges caused by technology disruptions. However, fintechs and the banking institutions are putting in place measures to address the disruption in the card payment process to ensure that merchants enjoy efficient online payment experience.

One of the industry players driving seamless banking in the online payment space is First Bank of Nigeria. The bank is leaving no stone unturned in ensuring that customers enjoy pleasant experience in its online banking. Recently, the bank introduced the FirstBank Visa Debit Multi-Currency card which is the first of its kind to be offered by any financial institution in Nigeria.

The debit card ensures that customers within and outside the country can enjoy the luxury of having their local and foreign denominated accounts linked to a single debit card. It is an enhancement to the existing visa debit dual currency card and can be linked to a customers' Naira, USD, Euro and GBP accounts. It is an international card with chip and Personal Identification Number (PIN) technology which can be used to make payment anywhere in the world and across all channels such as ATMs, POS and Web.

Speaking on the card launch, the Group Executive, e-Business and Retail Product, Mr. Chuma Ezirim, said the bank takes pride in pioneering the Visa Multi Currency Card in the country, adding that the bank remains committed to providing products and services that are designed to ensure the banking convenience of its customers regardless of their locations.

"This card is designed to make traveling fun for our customers and ensure they have a seamless transaction experience during their vacation, tourism and other business-related trips around the globe," he stated.

The bank recently set an impressive track record as the first financial institution in the country to achieve issuing a whopping 10 million cards to customers across the country. The bank is now among two other African banks to achieve the milestone.

The ground-breaking feat was similar to about two years ago when the bank in December, 2015 and May 2016, was the first financial institution in the country to achieve sustained alternative channels transaction volumes of 100 million transactions in December 2015 and May 2016.

According to the Managing Director, First Bank of Nigeria Limited, Dr. Adesola Adeduntan, the feat was a testament to the bank's drive in delivering its brand promise and putting customers first and continuously improving business in order to serve them better.

He added that one of the ways by which the bank was able to sustain the winning edge is the use of the instant issuance/Instant activation technology, which it pioneered about 10 years ago.

According to him, "Delivering to this feat at this time, is a testament to the bank's drive in delivering its brand promise putting customers first and continuously improving our business to serve them better.

"We have also consistently maintained the highest active card ratio in the industry. This feat also implies that our customers are becoming more technology savvy and we would continue to encourage this attitude with our commitment to world class service delivery. Therefore, we must work to ensure optimal performance and availability of all our channels such as ATM, FirstMobile and others to guard against customer dissatisfaction."

The bank has also recently bagged a hat trick of awards, which are clear signs that the giant strides taken by the pan-African leading bank-brand towards fostering its banking technologies are well aligned to the fast paced technological advancement in modern day banking.

In examining the issue of card payment space and the disruption, THISDAY spoke to the Chief Executive Officer, Patricia Technology Ventures, Fejiro Agbodje, who expressed confidence that the country was making progress in the payment space.

"Technologically, Nigeria is still yet to adopt technology 100 percent in e-Commerce. But we can do better. I think the major disruption with the payment space is network failure. You transfer funds at the Automated Teller Machine (ATM) but it fails. The primary reason for this failure is technology.

"If you look at the Nigeria Interbank Settlement System (NIBSS), you will see 13 to seven per cent failure rate in online transactions and in a day we have over millions of transaction in the country. So 13 percent means that 13,000 transactions failed and this is due to infrastructural challenge because in Nigeria we don't have a unified payment system.

"Unlike in Ghana where the payment is almost instant and in the United States with systems such as Paypal which is always instant. If you are making a financial transaction, each bank has its internal network which it operates and uses either NIBSS or Interwitsch.

"The internal networks are the payment gateways that move money from one bank to another bank. Therefore sometimes the failure in financial transaction can come from the bank which could be failure in its down time or the bank is upgrading its servers and technology as a result, they cannot transfer signals to NIBSS or interswitch. While sometimes NIBSS servers might be down which implies that there is no transaction.

"If you notice, almost every holiday in Nigeria, we have problems with financial transfers. These are all the problems that we cannot really solve until we have a unified system, where transaction can be handled properly. It is really long shoot because NIBSS is run by the federal government in partnership with all the banks, therefore getting NIPES to aggregate for everybody efficiently is going to be hassle.

"The improvement that has been spotted in the system includes the use of the electronic cards, scan to pay, pay code which allows you to make any payment without an ATM card that is innovative and if given more lights can be more adopted. So those are innovations and payment convenience for the customers. But unfortunately, Nigerians are not too receptive to new technologies, because in Nigeria, we don't trust what we don't know. So we rather stick to the old methods, instead of trying something new.

"The banks have a role to play in this technology disruptions especially in the area of innovation. But the question is if the banks are really meeting the users where they (users) ought to be met? It is one thing to bring a product that seems cool and good, but the banks should understand that the world is evolving.

"People want things that will drive convenience, instant, interesting and fast in the payment space. The online payment system has to be designed in such a way that it has to drive increased interests. We need to meet the users where they want to be met and what they want, we need to understand the market and how to penetrate it."

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