NIGERIA: CBN Should Strive for Consumer Protection in Cashless Policy – Abraham

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As the Central Bank of Nigeria (CBN) work towards extending the cashless policy to five other states and the Federal Capital Territory from next month, the Partner, Reach Legal, IT and Telecommunications Law, United Kingdom, Henrietta Abraham, has canvassed an enabling environment to promote market development, competition and consumer protection.

Assessment of the Cashless Policy

Nigeria was a cash society until the introduction of the cashless policy. This in itself is to be applauded. The policy has changed the face of the financial system in Nigeria in a positive and progressive manner. Are there challenges? The answer is Yes! However, no cashless policy has not met with its own specific challenges therefore there is hope that in Nigeria, those challenges can be addressed.
Since the cashless policy introduced, a number of things have been put in place. The Central Bank of Nigeria (CBN) is rolling out to six other states, banks have developed various electronic and mobile payment offerings for their customers, mobile money will hopefully continue to gain traction as the Mobile Money Operators and Telcos gear up to the next level, more Point of Sale (PoS) system have been deployed in places like supermarkets and other retailers.
Even corporates are embracing the cashless initiative. I believe that the last frontier will be consumers. Majority of the population are unbanked and one of the greatest challenges in many jurisdictions similar to Nigeria’s is financial inclusion, creating access to financial services for the unbanked.
Despite the challenges, I am sure that in good time the cashless initiative will become a success story in Nigeria as it has been in some other jurisdictions. We just need to work through the process. Kenyan M-Pesa took seven years to become a success. We’ve all heard the saying that, ‘Rome was not built in a day’. Any lasting project must start on a solid foundation and we need to ensure that the foundation is there to build on. The CBN Governor, Mallam Lamido Sanusi, should be commended for introducing the cashless initiative. CBN is doing a lot to support the initiative such as supporting projects that sensitise the population or which brings stakeholders together to deliberate on the issues going forward.

Objective of the Forthcoming Conference

The two-day conference is being organised by DeNovo, strategy, brand and media company and Reach Legal, a UK based IT and Telecoms Law Consultancy in collaboration with the CBN which is the main sponsor for the event titled: ‘Nigeria Transiting to a Cash-less Society: Charting the way Forward,’ which is being held on June 24 and 25. The aim of the conference is to bring together all relevant stakeholders in the cashless ecosystem to deliberate on the successes and challenges of the initiative in Lagos State, the pilot state, the way forward as CBN gets ready to roll out the initiative to six other states in the country and to help to shape the policy direction of the initiative going forward.
What differentiates this conference from others is that this is the first all stakeholders summit on cashless and the focus is purely on addressing policy issues as opposed to marketing products and services. That is why we make every effort to engage all stakeholders including regulators and policy makers, those who will shape the cashless policy as well as those who are affected by those policies. At this conference you will find traders, consumers, policy wonks, regulators, legislatures, World Bank representatives and others.  The conference deliberations cover major issues affecting the cashless initiative in Nigeria such as Building Resilient Infrastructure for the Effective Implementation of Payments Services in Nigeria: Charting the Way Forward.
We are expecting all the major stakeholders in the cashless ecosystem including the Deputy Governor (Operations), CBN, Mr. Tunde Lemo and the World Bank that is very keen to assist with the development of the cashless initiative in Nigeria will be represented by the Senior Payment Systems Expert, Carlo Corazza.

Complaints on Faulty PoS

Faulty is a term people use loosely for many things. It could be a technical fault with the machine, or it could be a network problem, poor connectivity or power loss. Most of the issues border on infrastructural challenges which need to be addressed and are being worked on, slowly, but hopefully will get better going forward. Needless to say, we need efficient PoS systems management in place. What we must avoid is giving up at the slightest problem. My understanding is that Payment Terminals System Providers have been tasked with addressing these issues including providing some element of training to retailers and merchants.  Also the recent deployment of the PoS systems operating USSD access channels provides an alternative platform.

Extending the Policy to 5 States and FCT

Lagos had a head start, being the commercial hub of Nigeria. This was good for the state from investment point of view. It is time for the project to extend from Lagos to the other prepared states. Lessons can be learnt from the successes had and challenges faced as Lagos State implemented the cash-less initiative. These can be used to benchmark the development of the policy in the other states being rolled out to. This is one of the things we hope will be achieved in the upcoming conference mentioned above.

Legal Framework

The first thing I will say that with new technology, regulation must not be too prescriptive but should allow room for technology to develop. Nevertheless there is no doubt that there is a need in Nigeria for the development of a coherent regulatory framework. CBN, tasked with regulating the cashless policy, has enacted a number of guidelines, including PoS guidelines and recently, guidelines on agency banking. This, however, is not enough going forward. The legislature should work towards enacting regulation which is technology neutral and creates an enabling environment which promotes market development and allows competition.
For the regulator or lawmaker it is attaining a balancing act between mitigating risks and maximising opportunities particularly where new technology is concerned. One specific area of legislation which comes to mind as requiring urgent attention is consumer protection and data protection due to the amount of personal information which is being collected, processed and stored nowadays.

He enjoined the entire country to embrace the use of the services to aid information knowledge level, business development and contribute to achieving the Nigeria we all desire
In a statement issued from the technical company in charge –, its Chief Technical Officer, Matt Howard  said “the data centre is an advanced one of a kind, built with over 13 million different software used in B2B directory tracking, global positioning, 24 hours traffic surveillance, stock market analysis reporting, finger print readers, vehicle tracking, crime scene reporting, CCTV Data records and backup, cross marketing and emergency response call forwarding to police and trained authorities.

The centre he said, would receive in- bound enquiry calls from over 3,000 Nigerians at a time for now, and about 27 million enquiries could be processed every day.

“We are working to increase inbound trunks to accommodate 10 million callers at a time. This we should achieve before the end of June 2014.  As at today, we have employment for over 3,000 Nigerians, majorly trained statistics and data dissemination experts, multi lingual distress experts; Anti-terrorist negotiators, doctors, first aid nurses, pilots, call centre agents, career development advisors, weather experts, IT and Technical experts among others. They will offer professional services daily to Nigerians,” Howard said.

The company Chief Operating officer Ms. Denise Cann also stressed that the directory number – 7411 may equally serve as a counter terrorism number into which the entire nation may dial into at the hour of need. Such distress calls or emergency will be forwarded to police or the joint task force as the case may be for rapid intervention. “We will work with major companies like Google GPS, NIGCOMSAT, CBN, GLO1 and Main one to achieve the feat,” Cann said.
According to  Howard, “Though not primarily set up for emergency responses, but we are also capable of connecting to all emergency units, and such would not deprive the citizens of Nigeria the right to instant help at critical time of need.”

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