As Nigeria repositions to meet the targets set for vision 2020:20, Onu Okorie writes that achieving efficient payment system is inevitable

Payment is a very important aspect of the value chain in the financial system. This means that any country that wants to meet up with the best global practices in modern economy, revolution of the payment system is inevitable.
Nigeria started the journey of revolutionising its national payments system in 2007. This culminated into the recent launching of the Payments System Strategy Board. Vested with the over –sight responsibility for the policy formulations and implementation of payment development in the Nigerian financial sector, analysts have argued that it would bring about sanity in the system. The terms of reference for this board are as follows: To provide strategic direction and drive the overall national payments system strategy; to provide cross-scheme priorities and resource allocation; and to arbitrate in cross-scheme decisions.
According to the governor of Central Bank of Nigeria, CBN, Godwin Emefiele, “it is another milestone in realising our vision of “facilitating economic activities, by providing safe and efficient mechanisms for making and receiving payments with minimum risks to the central bank, payment service providers and end users, extending the availability and usage to all sectors and geographies, banked and unbanked, and conforming to internationally accepted regulatory, technical and operational standards”.
He argued that Nigeria is gradually realising her dream of becoming one of the 20 largest economies in the World by the year 2020, just as the nation has attained the 26th largest economy in the world, with our activities getting much more intertwined with occurrences in the global economy.
Emefiele said that in order to participate actively in the global economy, Nigerian payments system must be successfully benchmarked against the global best practices, as in most developed nations of the world.
Some of the significant achievements in this regard include: in March 2007, the CBN launched the Payments System Vision 2020 PSV2020 programme with the aim of transforming the Nigerian Payments System. This vision originally identified the seven priorities/ and key initiatives that will drive the usage of electronic payments, including:
Government Supplier Payments, Person-to-Person Payments, P2P,
Salary Payments, Bills Payments, Taxes – for Business Taxes – for Individual, Securities Settlement and Income Processing.
The CBN boss disclosed that the initiatives were intended to benchmark the existing core payments infrastructures in Nigeria against international best practices.
“Through the implementation of these initiatives by the CBN, in association with the banking community, Nigeria has witnessed an impressive growth of electronic payments and a shift from the overwhelming dominance of cash as a means of payment” he said.
He mentioned a few of the achievements made so far in this regard to include: Implementation of Nigerian Uniform Bank Account Number, NUBAN; the deployment of a new RTGS that is built on the Society for Worldwide Interbank Financial Telecommunication, SWIFT, messaging standards; Introduction of the Cash-Less Policy; The deployment of the Scriptless Securities Settlement System, SSSS; Adoption of Mobile money as a major channel for delivering financial inclusion; and Active support for the implementation of the federal government Treasury Single Account, TSA.
He however, stated that a detailed assessment of the Nigerian Payments infrastructure has identified eight new industry verticals aimed at advancing the adoption of the electronic payments in Nigeria. These verticals and their objectives are as follows: Agriculture – to develop electronic payment methods to support the agriculture value chain inputs through to tertiary production and supply; Smart Cities- to develop a cashless model for Smart Cities.
Emefiele said the focus will be on both existing cities and “Greenfield cities”, to ensure that less cash is used as a means of payment; Government Flows– to ensure adoption of end-to-end electronic, channels for all forms of salaries, pensions, suppliers, individual & business taxes payment and collection of revenues by private and public sector organisations;
Hotels and Entertainment; to work with key pilot hotels and other key entertainment venues such as restaurants, cinemas, sports centres to promote the ‘cashless initiative’; Transport; to develop strategies for getting the public to pay for transportation electronically.
CBN however, assured that a pilot implementation would be organised with various transportation companies. “I am aware that a lot of traction has been gained on this initiative, on air transportation, but a lot still remains to be done on such other means as land, water and rail” he said.
He mentioned plans to design and develop an electronic fund transfer system, which utilises multiple channels in processing electronic payments that supports the educational ecosystem with components such as grants, scholarships, consultancy services, Internally Generated Revenue IGR, tuition and administrative fees;
Also, it would provide solutions that supports the provision of personal and medical information and payments for health and medical services; on the bill payment and direct debits, Emefiele said CBN wants to drive the current initiative for bill payments to conclusion, by building on the significant improvements to the direct debit programmes, by increasing usage of bill payments programmes across suitable industry segments such as insurance, pensions, telecommunications, Cable TV and utilities. He said that the apex bank has set up working groups for each of these initiatives order to facilitate the achievement of these objectives.
In addition to that, Emefiele stated that the existing four special interest working groups and one initiative working group will continue to pursue the objectives earlier set for them, more so with the injection of new members into the groups.
These groups and their functions are: West African Monetary Zone, WAMZ ,Special Interest Working Group—To ensure consistency between domestic and WAMZ payment initiatives; Legal Special Interest Working Group—To promote the appropriate legal framework for payment systems; Information Security and Risk Management Special Interest Working Group—To develop and implement Information Security & Risk Management Framework for the payments system; Public Awareness Special Interest Working Group—To act as a respected spokesperson for the payments industry, on behalf of the CBN and industry participants; and Securities Settlement Working Group–To create ‘best-practice’ solution for securities market-side and investor-side clearing and settlement.
He argued that having put in place all the aforementioned initiatives, working groups and the governance scheme boards’ best practice demands that there should be a senior and superior body that oversees all payment systems activities, and provides strategic direction for the National Payments System.
And it is in this respect that the Payment Systems Strategy Board, PSSB, is being put in place by CBN. The body is expected to replace the National Payment Systems Council, NPSC, and will be the pinnacle organisation for the governance, management and operation of the Nigerian payment systems.
It has been argued that for Nigeria to meet the desire of becoming financial hub of sub-Saharan Africa, which is part of the vision 2020:20, efficient financial system must be put in place.

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