By Omodele Adigun
Settling your bills with mCash may not be a new thing again, particularly following its recent launch, but using your phone to pay tax via mCash fashion is the in-thing now.
According to Mr. Ade Sonubi, the Managing Director of Nigeria Interbank Settlement System (NIBSS), settling tax issues with phone may be the latest short-cut to deepening financial inclusion in the country.
The channel, mCash, introduced last November, is many things to many people. “We call it micro, some call it mobile. Others call it merchant, but the whole intention is to further broaden the opportunity for people who, today, use cash to find a convenient means of making payments,” says Sonubi.
As far as tax payment is concerned, he explains: “You can use your phone to pay tax. The same way I go to a shop, because their PoS is not working, I ask for your bank account number, and I do a transfer. The same way a tax office can have a code. So one of the things we are trying to do is to create a central merchant register where everybody will be given a code the same way a textile or bookshop has code. When I go there, I don’t even need to ask for your account number. I just use your code number and do something like *XXX* to your code. And you get the money. All the tax offices can have that.
“When you start having agents or agencies, tax authorities can ask them to collect taxes for them. So when I go to your agents, then I do *something* to the agent, maybe I put 1 or 5 at the back to represent tax payment, so we can now tell the tax authorities, this phone number has paid. In their database, that phone number is tied to you. So they know when you have paid or not paid. They can have an aggregate tax picture of you. And the day you come to Lagos that you want to do small contract for them, they ask for your tax number. ‘Oh I cant remember it’. Okay what is your phone number, and with that they check your tax history: ‘you last paid us tax six months ago, you have not paid us in the last six months.’ It is data information. It can be done today. It is not rocket science.”
On how it can deepen financial inclusion, he states:
“As we begin to deepen and reach out to a lot more people, as we begin to make real the dreams of financial inclusion, and as we begin to realise that a lot of government social programmes would touch a different set of people, we have to start creating the opportunity for them to have commerce that is not tied around cash. And to achieve that, the banking industry, the telcom industry have come together to partner and find a way to deliver that kind of service at a reasonable value point, which is in terms of efficiency, price and addressing concerns of being able to ascertain that their transactions are real.”
Still on tax collection, he explains that there are some fundamentals to get first.
“One, I need to identify the tax payer. And if you’ve paid, you need number to start with. Otherwise, how would I know who has not paid or who has paid but has not paid everything. So there is need to bring in people to the tax bracket.
“The second is to make it easy for them to pay. The excuse is that ‘I cannot take my money to go and pay taxes so far away. Something I don’t want to do. If you cannot make it convenient, I will not do it.’ Electronic channels can help. And, of course, there are leakages and reconciliation, electronic channels can help. And I have a theory; when we talk about financial inclusion, we focus on the wrong thing. If you ask anybody about financial inclusion, they would say, ‘oh, we need to help people in the villages. That’s financial inclusion. I don’t agree with that concept. Not that I don’t want to help them, don’t quote me out of context. But usually, it is the person that pays that dictates how you receive the money and what you can do with it.
“Lagos has an inflow of over one million new people every time. I think you start financial inclusion with the cities, and people like gardeners, drivers, security people and encourage them to start adopting electronic means (of payment) because when they are sending money home, these are the channels they would encourage people at home to use. Coming back to tax: I can identify them, make it easy for them to pay. I can tell vulcanisers by the roadside, please just pay N50 everyday. They have a mobile wallet, register it and give them tax numbers, and the PIN. Now I have a system that I can check everyday who has paid and who has not paid. I can now send a few people to the guy that he has not paid. And after a while, if he has not paid, you lock him up. But once they know that they can be found out, people would not be unreasonable. Those are the ones I think we can start financial inclusion with. It is not the village where you put PoS for the people at village centre. There is no electricity now, there is no network. What is PoS doing in the village?”
At its launch last November, mCash was touted as the new solution to facilitate low-value retail payments, drive payments by providing accessible electronic channels to a wider range of users and to further grow financial inclusion by extending electronic payment services to payers and merchants at the bottom of the pyramid. In short, it was designed to make payment convenient, easy and affordable.
In order to make payment, you can use any mobile phone. It leverages on the Bank Verification Number (BVN) since there are about 27 million BVN numbers tied to customers’ accounts. It also leverages on the fastest platform for transfers – the NIBSS Instant Payment infrastructure (NIP), the BVN – is to identify the financial institution where the payer has an account and the mobile telephone’s Unstructured Supplementary Service Data (USSD) technology, which in recent times has become the most accessible channel for processing financial and non-financial transactions.
A general USSD short code is made available for banks that do not already have their own short codes. However, banks with existing USSD short codes can also access the service using their own short codes. Merchants are expected to display their allocated merchant codes at their various business locations. Merchants and payers may use the USSD code of their preferred bank or a zero-rated universal USSD code.
As a payer (customer or buyer), one can simply dial *402*sellercode*Amount#.
The phone screen will display the following: the name of seller; list of banks. Then select your bank; input your PIN/Passcode. If you do not have a PIN/passcode, you will be required to register for a PIN/Passcode. You can also pay using your bank’s USSD code.
Its advantages include the fact that it does not require internet access, it works on all mobile phones and USSD service is available on all mobile networks for widest coverage possible. It is available every time.
“It also has phone insurance cover. For transaction below N50,000, in case of fraud, there is certainty that you will get your money back. And if there is any transaction done in error, you will get refund done, and it will be done latest within six hours,” said Sarah Chidebelu-Eze, Head, Product Management of NIBBS.