Omodele Adigun
As the Nigeria Inter-bank Settlement System (NIBSS) and its partners executed 285 million Point of Sale (PoS) transactions last year, its Acting Managing Director, Mr. Niyi Ajao, is upbeat that the figure is going to be more than doubled this year.
Basing his optimism on historical trend, he said: “This year, 2019, our projection is to make sure that we double that (2018 figure). In 2017, we did half of the 285 million. So our projection for 2019 is about 600 million transactions. That is why we are making sure that we enhance our capacity.”
At a briefing last week in Lagos, Ajao laid out strategies on how to achieve this. Aside that, he also assured PoS users that the hitches witnessed since October are gone for good. “So we are calling on Nigerians to continue to use their cards. When things go wrong, card holders should go to their banks that issued the cards and complain to them what happened. Once you complain, they will be able to fix it,” he added.
PoS hitches
On the issue we are having about PoS transactions hitches since last December, I want to tell you that we are aware. The truth of the matter is that since about December last year, we have been having some service issues on the Point of Sales (PoS) transactions. Up till now, the PoS services have been very stable. We did the highest volume of about 285 million transactions in 2018. It has never happened in this country before. We have been working over the years to stabilise the system and ensure that we are able to meet the needs of the card holders. But when you are dealing with machines, once in a while, you will have some hitches. That was what happened as from December. So our message to Nigerians and to the world is that the pain people are going through, we feel it. We are aware because we have online rating and monitoring tools that work 24-7 in NIBSS.
So we know when a transaction has failed. We know when the debit in an account as a result of a failed transaction is not reversed, which is not supposed to be so. We are aware of all the troubles that people are going through. And we have been working very hard to restore normalcy since about December when it started. We have been working with all stakeholders. If you look at PoS transactions, the way it is operated, for one transaction to go through successfully, we have many parties playing different roles. There are about five main parties that work together to ensure that things go on well. Now, we did 285 million transactions in 2018. I can tell you, it is still growing and it has been growing.
Because we know that, we meet with all of our stakeholders every time to make sure we enhance capacity in preparing for the increased volume. But unfortunately, some of the steps being taken by NIBSS, by processors, by banks since about December to ensure that we have a system that accommodate the growing volume of transactions, some things still went wrong. That is why you are seeing that transactions are failing. We have instances where a number of transactions failed. And secondly, when they failed, the reversal that should happen gets delayed in happening.
Between that December and January, companies that people don’t even know that they are involved in PoS transactions have some issues that affect PoS transactions. They all have fibre cables underground. When somebody cuts any of the cables on the road, the PoS transaction that is supposed to pass through that cable begins to fail. We have sat down with them too. We had serious conversation with them to make sure that they work to minimise the failures. Even if it fails, they can run to other service providers to make sure card holders always enjoy sales. Those are the issues. We ‘ve been working to ensure that we put the situation under control. We have a solution provider whose solution we are using. We have to sit down with them to ensure that we restore normalcy very quickly.
We just finished a meeting where we called all stakeholders together. All the banks that issue cards, that authorise card transactions, CBN representatives, all processors, PTAD: those that write the applications that you see on the PoS terminals and the PTSPs, those that manage and service the terminals when they are out of order We had a session where we all sat down to review the situation.
We want to see the effects of the counter measures that we have been applying since December on the market. We can tell you that in the last few days, things are beginning to get better. And we went ahead to agree on further steps that we want to take. We call it capacity enhancement, which we must do and continue to do because volume is growing and capacity needs to be expanded. So we left that meeting with commitment from all stakeholders that we would all work harder to enhance capacity to cope with the volume that is coming. And that the immediate problem that people are suffering, which is reversals not being treated quickly enough; we all resolved that we would all work harder now to ensure that they are treated so that the pain of Nigerians and card holders will be eliminated. We want to assure Nigerians that in the next couple of days, you will see things improving seriously.
In the last few days, all the measures we have been applying, we can see that they are yielding good results. And as we move on in the next few days, you will see that things have come to normalcy. So we are calling on Nigerians to continue to use their cards.
When things go wrong, card holders should go their banks that issued the cards and complain to them what happened, either by calling the contact centre or going to the bank’s branch to complain. The banks gave commitment at the meeting we just finished now that when those complaints come from card holders, they would be treated promptly. And we will continue to work on all the systems to ensure that the failures we just revealed don’t happen any more.
Plunging volume
You said you have seen volume going down. That is why NIBSS itself is bothered generally about what is going on because for every transaction that fails, it is a loss of volume to us, a loss of business; apart from the pain to the customer, it is a business loss to the merchant that is to be paid. So really, all that have been going on since about October to December are a loss of transactions. That is why we have been working very hard to make sure that we restore normalcy as quickly as possible.
Cost
To be very frank, we did 285 million in 2018. This year, 2019, our projection is to make sure that we double that. In 2017, we did half of the 285 million. So our projection for 2019 is about 600 million transactions. That is why we are making sure that we enhance our capacity. Incidentally, like I said earlier on, to make a PoS transaction go successfully, it takes so many parties. And that is why we are calling everybody together. NIBSS has capacity, we are upgrading our capacity. Other partners have to do the same thing. That is why we keep talking to everybody. This meeting we just held was not the first. Apart from e-mails and phone calls, we held several meetings with each. In the last three months, we met almost on weekly basis. So talking about the cost, to be frank, it is part of efforts to enhance capacity that the system hitch did happen. Incidentally, within that same period, other players too had technology challenges; they have manpower challenges. In the middle of this, Interswitch had its own issues, a number of banks too had their own issues which then compounded the whole problem. It is all in efforts to enhance capacity. The assurance I can give is that we have been in this business since 2011. We have stabilised the system. We have the competence, we understand the system and we are working very hard; we will put it under control in the next couple of days. We have been applying different measures to improve the system. These past few days, results are coming out well already. And that is why we are going ahead to even put pressure on other stakeholders to ensure they do the needful. We are very confident that we will solve this. We have the expertise to put the situation under control.
Dispense error
The regulation says within one week, dispense error reversal must be sorted out. My advice to card holders in particular is that when you have reversal problems, please, immediately get to your bank and use the right complaint mechanism in the bank. For some banks, all you need to do is to call your account officer. For some, you need to call the contact centre; for some banks, you need to go to the bank branch to fill a form. I know many banks that allow you to go on internet banking system to lodge your complaint of dispense error. And they work on it. The bank has an automated system that connects them to the customer’s case. Once you complain, they will be able to fix it.
I heard the other comment about some banks that have not been living up to expectation. NIBSS has a contact centre too. I will advise that when the bank is not working on it quickly, card holders can ask NIBSS to intervene at 0800ASKNIBSS (080027564277). Our client services is [email protected]. We are partnering with all the banks and supporting them to ensure that their customers are happy. The way we are taking it is that ordinarily, the need for reversals should not happen. Tackling this is the root cause of it.
One fundamental thing that we did at about December when we saw that the system had improved was that we set the system time out time at 15 seconds, meaning that by our statistics, all transactions will get completed within 15 seconds. But unfortunately, because of the telcos’ problem, issues that came up with a number of banks, issues that came up with the processors, transactions then began to happen outside the 15 seconds. That is what caused the reversal. So one fundamental decision we have taken now at this meeting that we will implement as from March 22 is to increase the time out time to 45 seconds, meaning that transaction that would have timed out after 15 seconds now has more 30 seconds. So that would bring down the volume of reversal drastically.
Failure rate
Under normal circumstances, failure rate for our PoS is about 13 per cent daily. But within this period of the crisis, it has climbed to about 16 per cent. So we are working hard with other stakeholders to bring it down further to something close to 10 per cent.
Upgrading
What started off all of these is our upgrade efforts to change the system. We changed our system to be ready for the big volume that is coming. We have technical partners we are working with. They are working hard to make sure they stabilise the system. Interswitch has a big role in this. In our parlance, we call Interswitch a processor. When PoS terminal sends transaction to NIBSS, based on the directive of the bank that installed the terminal, the bank actually directs NIBSS. This one should go to Interswitch, this one should go to unified payments, this one should go somewhere else. Based on that, we run Interswitch. Interswitch plays up to 70 per cent of the PoS transactions that go through us. So when I talk of partners, I am referring to Interswitch, the banks and all of them that I can’t mention one by one.
Incentive
The first incentive is to bring the situation to normalcy. Customers who have suffered dispense errors (reversals), whose accounts have been debited and not reversed on time now get their money back. Beyond that, many banks run loyalty schemes to reward customers. NIBSS did something about a year or two years ago. And we intend to do more of that this year to bring confidence back to PoS business. We will continue to do that because our core business is to grow payment system e-payment adoption. It is our core mandate. It is the only thing we do in NIBSS. We will continue to provide support to all our partners to ensure that the volume continues to grow.