Banks, Nigeria Interbank Settlement System, NIBSS and the Central Bank of Nigeria, CBN, and the banks are engaged in a blame game over the failure to reverse failed electronic payment transactions within the stipulated time even as tales of agonizing experience by customers mount.
The banks blame NIBSS and unrealistic timelines set by the CBN as well as inadequate electronic payment infrastructure for the delay in reversing failed transactions. But the CBN cite malpractice by banks in treatment of customers' complaints while the management of NIBSS absolved the organization of any fault with respect to delay for reversal of failed transactions.
Guidelines on Failed Transactions
According to the CBN guidelines for the resolution of failed transactions, "Failed "On-Us" ATM transactions (when customers use their cards on their bank's ATMs) shall be instantly reversed from the current timeline of three (3) days.
"Where instant reversal fails due to any technical issue or system glitch, the timeline for manual reversal shall not exceed 24 hours.
"Refunds for failed "Not-on-Us" ATM transactions (where customers use their cards on other banks' ATMs) shall not exceed 48 hours from the current 3-5 days.
"Resolution of disputed/failed Point of Sale, PoS or web transactions shall be concluded within 72 hours from the current five (5) days."
Customer experiences
But in recent times, there have been increasing complaints by members of the public over delay by banks to reverse failed transactions within the CBN stipulated timelines. In many instances bank customers experienced delays of more than a month before banks reverse failed transactions.
This agonizing experience became more pronounced in the first quarter of the year, following the massive shift to electronic payment channels triggered by the cash scarcity arising from the Naira Redesign policy.
Speaking to Vanguard, Oluwanifemi Oropo, a bank customer said: "I transferred N100,000 to a friend on April 15th and I was debited. But my friend was not credited.
"I visited the bank and asked for my statement of account which showed that the money was debited from my account.
"I filed a complaint and was told it would be reversed in five working days. Till now, May 6, I have not been credited. I had to borrow money to give to my friend pending when my money would be reversed."
On her part, Mrs. Kehinde Salami complained bitterly how she was debited N10,000 after purchasing some food items using PoS for payment on April 4th. The Merchant was not credited and refused to give her the food items bought.
"It was a terrible experience that day. I had to visit the bank the next day and fill out a complaint form. The customer care personnel told me it would be resolved in five working days. I have visited the bank four times, now it is May 7th, all they say is that my complaint has not been resolved due to network failure."
Also narrating her experience, another bank customer, Mrs. Ebunoluwa Sessou, said: "In April around the first week, I did a transaction of N3,050 which left my account but didn't get to the beneficiary account. Within the same week I paid N1,430 using PoS. I was debited but the beneficiary was not credited.
"I visited the branch of my bank in Victoria Island to file complaint since the branches in my area were always crowded.
"On getting there, I filled out a form and was told the problem would be resolved within two working days. This is the third week. Nothing has been done.
"The customer service personnel who attended to me advised me to lodge complaint using the bank's online application which I did.
"As you can see the status of the complaint is showing " in progress" for over three weeks.
"This is not the first time I am having this type of experience. There was a case of N30,000 failed transaction of which when I visited the bank they told me that since the issue has elapsed three months, it cannot be treated."
NIBSS, CBN, system inadequacy responsible-banks
Responding to Vanguard inquiry on the condition of anonymity, a Customer Care Manager in a Tier-1 Bank said:"One of the things that is causing this delay is that all the banks in the country are interconnected by Interswitch. Nigeria Interbank Settlement System, NIBSS, which serves as the settlement platform. Now it is rather slow and the reason why it is like that is the increase in internet transactions that has been taking place.
"In my own opinion, the infrastructure cannot support the speed at which you expect a reversal. I believe the CBN has not been realistic about the time limit for reversal because in a day you have hundreds of thousands of transactions and everything is being settled through NIBSS by two different banks or between three banks and you expect it to be that fast.
" Our infrastructure is not ready for something like that and that is what causes those delays. Another reason is that customers do not give correct information on the dispute forms when they are asked to fill it and if they don't give the precise information the responses they will always get is that it was
"For example, someone reported that he withdrew N40,000 and was debited without being credited. Meanwhile, the person didn't not withdraw N40,000 in bulk. It was N10,000 in four places.
"If the customer care staff looks for N40,000 they won't find such a transaction in the customer's account. That is another cause of delay and I don't think there is any bank that will say I am not going to attend to your request but what happens is this.
"The customer is already emotional by the time he or she gets to the bank. On getting there, you see 10 to 15 people waiting to be served and you believe they should attend to you first.
"No matter how many people are multi-tasking, the truth is that you cannot do more than one thing at a time. These are the things causing such delay.
"Also, in my own opinion, banks are not adequately staffed. This stems from shareholders and stakeholders wanting more returns on their investment and the quickest way to cut costs is to downsize staff. So all these factors put together would make processing reversals very slow."
Also speaking to Vanguard on condition of anonymity, the Customer Care staff of another bank cited the slow reconciliation process of NIBSS as the cause of the late reversal of failed payment transactions.
He said:"The central scheme that links banks together is called NIBSS. So once there is a failed transaction or a dispense error which normally is supposed to be reversed immediately but because of network failure, or some reconciliation issues, NIBSS might fail to reverse the amount that was dispensed in error.
"Sometimes the person with the problem has to come to the bank and fill a form so that it will be manually reversed. Those are the problems that cause a late reversal of failed payment transactions. It has to do with NIBSS because NIBSS is responsible for reconciliation or you call it central switch."
On her part, a Customer Service Manager in a Tier 2 bank, who also spoke on condition of anonymity cited system glitch and slow network due to the large volume of customer complaints banks have to attend to almost at the same time.
"One reason for the delay in a reversal of failed transactions and dispute resolutions is what we call glitch in technical terms.
When such a glitch occurs in our system it can potentially cause serious harm to the system, especially temporary loss of service which causes delays in searching for details in the person's account to know the cause of the failed transactions and carry out manual reversals."
How non-reversal of failed transactions affect bank customers - BCAN
President Bank Customers Association of Nigeria (BCAN) Dr. Uju Ogubunka stressed that the delay concerning non-reversal of failed transactions has several negative impacts, including fear and lack of trust in electronic payment channels.
Ogubunka said: "The issue of increased failure of reversal of failed transactions will affect people's physique. Individuals will begin to think, oh if I use this e-payment platform I am not sure it will work and if it doesn't work when will my money be reversed into my account and whatever.
"Such things can cause fear, not even psychological problems. People can get frightened and say if it takes banks 100 days to reverse failed transactions, for instance, the days it will take to reverse it, you won't be paid interest so that is a way to quantify the loss plus the anxiety.
"If you send the money to someone to use for something important and the beneficiary doesn't get it that is another cost. Because before you sort out the reversal issue the price of what you paid for might have increased."
NIBSS not responsible for the delay of reversals-Management Responding to Vanguard concerning the accusations by banks, the management of NIBSS in a statement said the organization is ready to work with any institution that might be experiencing challenges in addressing prompt reversals to customers and merchants.
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The company said: "A typical PoS transaction involves messaging across various stakeholders' systems (PoS NIBSS Processors Banks) with NIBSS at the center as the Payment Terminal Service Aggregator, PTSA to ensure transparency and interoperability within the value chain.
"The PoS infrastructure is designed to handle customers' funds reversal within the regulatory timeline when a transaction failure occurs at any of the value chain touch points. To date, there are two major reversal methods currently adopted as regards PoS transactions:
"Auto-Reversal: Daily generation of Reversal Report for the processors.
Auto-Reversal is the 'instant reversal notification' for failed transactions where all parties in the value chain are expected to honor & treat instantly. This method is the primary and standard best practice of PoS transaction reversal and it is an existing component of the PoS Infrastructure.
"To further assist in the delivery of reversal transactions not treated or received from 'Auto-reversal', recently, the Industry agreed to a framework for an end-of-day 'Reversal Report' to be submitted to processors by 9.00pm daily to enable reversal of customers' funds that were not treated automatically within the regulatory timeline.
"These are steps we have taken as an industry in ensuring customer confidence in the Nigeria Payment Ecosystem is further enhanced. We are available to work with any institution that might be experiencing challenges in addressing prompt reversals to customers and merchants."
Banks exploit customers' ignorance to circumvent guidelines - CBN
Meanwhile, the CBN has cited the recent surge in electronic transactions and malpractice on the part of banks as major factors for rising cases of delay experienced by customers with respect to reversal of failed transactions.
Speaking on the issue at the 34th CBN seminar for Finance Correspondents and Business Editors in Calabar, Cross Rivers State, the Deputy Director, Payment System Department, CBN, Adewuyi Adeyemi also said that banks are able to circumvent the guidelines on failed transactions because most customers are not knowledgeable about the procedures for filing complaints on failed transactions.
"As regards failed transactions, the fight we have had in the industry in the past four years, that is COVID-19 and the Naira redesign that happened this year actually increased the volume astronomically to a very high level and this created a lot of failed transactions.
