• We have resolved over 60% ePayment challenges, says CIO
• USSD platforms still challenged despite over N100b debts owed telcos by banks
• CeBIH assures of improved services, fresh investment
• Banks infrastructure insufficient, say experts

Despite several complaints of unresolved failed electronic transactions that trailed the payment sub-sector in the first quarter of 2023, as a result of the Federal Government policy on naira redesign, volumes and values of electronic payment transactions, which slumped in February to N37.6 trillion has climbed to N49.4 trillion by March.

Though the Nigeria Inter-Bank Settlement System (NIBSS) was silent about unresolved transactions, industry sources noted that only 60 per cent of the ePayment transaction failures that occurred earlier in the year had been resolved, leaving 40 per cent of complaints unresolved.

Latest data released by the NIBSS showed that ePayments were up by over 23 per cent within one month, attributable to surge in the total value of e-payment transactions last month as well as sustained use of digital payment channels despite the waning cash scarcity.

Notwithstanding the rise in ePayment adoption, there are still several unresolved failed ePayment transactions that characterised the first quarter. These problems have continued to keep more Nigerians in the banking hall. These transactions, according to findings, run into millions of Naira.

While to some people, it could be as low as N2000; there are however, transactions that run into hundreds of thousands that are currently hanging, which have not been reversed.

Checks by The Guardian in the last three weeks have revealed that 70 per cent of bank customers, who visit the banks, are there to resolve issues that border on failed ePayment transactions.

From Lagos to Kano, Ondo to Kebbi, Rivers to Sokoto states, the story has remained the same. Customers continued to besiege the banking halls with the hope that their failed ePayment transactions would be resolved. While many customers were told to come back, others lament that their transactions could not be traced, setting in rounds of frustrations on the banking public.

These transactions were not limited to within the banking cycle alone, customers were also stranded at super markets, hospitals, shopping malls, cinemas, among others, where payment transactions also failed.

This has brought untold frustrations, as a result of the rise in transaction failures, primarily via the unstructured supplementary service data (USSD), failed automated teller machine (ATM) terminals transactions, which are associated with intermittent slow service and sluggish Internet banking system, among others.

Analysis of the statistics showed that PoS transactions volume rose from 113.53 million in February to 177.93 million in March, with the value also rising from N883.4 billion to N1.152 trillion, representing a surge of about 30.41 per cent.

Further, the Nigeria Interbank Settlement System Electronic Fund Transfer (NEFT) transactions increased by 20.52 per cent to N2.08 trillion in March from N1.73 trillion in February. Similarly, the report said that the value of NIBSS Instant Payment (NIP) transactions jumped by 31.37 per cent to N48.33 trillion in March from N36.79 trillion in the previous month.

The data also showed that cheque transactions volume increased to 426,926 in March from 333,952 in February with values put at N283.4 billion in March as against N238.4 billion in February.

In terms of transactions carried out through the mobile devices as captured by the system, the volume rose from 183,687.1 in February to 380,110.94 in March. The value rose from N2.56 trillion in February to N4.14 trillion a month after.

This is even as the debts on owed telecoms operators by banks on the Unstructured Supplementary Service Data (USSD) continued to rise, which according to the Head of Operations, Association of Licensed Telecoms Operators (ALTON), Gbolahan Awonuga, is now in excess of N100 billion with the debtors keeping mute.

Though these challenges have been with the banking public in the past few years, it however, compounded significantly in the last three months, owing to the Federal Government and the Central Bank of Nigeria (CBN) forced policies of Naira redesign on the banking public.

Consequently, many of the unresolved and yet-to-be reversed transactions have breached the CBN rules on dispense errors, among others.

Recall that on June 1, 2020, in a circular, which took effect June 8, 2020, signed by former CBN Director, Corporate Communications, Isaac Okorafor, with the title: “CBN Revises Timelines for Dispense Errors, Refund Complaints,” noted that in its determination to further enhance service quality, particularly quick refunds when customers experience failed transactions, dispense errors or disputes, has revised timelines for reversals and/or resolution of refund complaints on electronic channels, with effect from June 8, 2020, as follows: 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 PoS or Web transactions shall be concluded within 72 hours from the current five (5) days. All banks are directed to resolve the backlog of all ATM, POS and Web customer refunds within two weeks starting June 8, 2020.”

Narrating her ordeal with the USSD platform, Raliat Oyadeyi, said: “I was to make an urgent transfer to my mum for medicals. I was debited but the recipient account was not credited for days. That was frustrating because I sent the balance to my account. The problem was not resolved until about four weeks later, after I had visited the banks multiple times. ”

To 40-year-old Segun Alabi, he was at Spar shopping mall to do some shopping ahead of the general elections. “After picking the goods, I decided to pay via the ATM, the network didn’t allow it. After waiting for about 45 minutes, I decided to transfer! The money, about N35, 000 left my account, but never got to the Spar account. When my payment couldn’t be confirmed, despite deduction, I had to return the goods.

“The money was reversed after about three weeks. I was lucky, though I had to be going to the bank twice a week before it was resolved. There are so many people who weren’t lucky…their transactions are still pending.”

A Chief Information Officer (CIO), who spoke anonymously, claimed that banks have resolved about 60 per cent of ePayment transaction failures that happened in February and March.

According to him,  “the challenge is much. It was exacerbated by the shortage of infrastructure and reduced manpower in the banking sector. You know most technical staffers have left for abroad. It is really a huge challenge in the industry, but we are managing it. I can say that we have resolved about 60 per cent of ePayment failures. We have upgraded our infrastructure too. At our bank, we have employed more technical hands to salvage the situation.”

Speaking on these challenges, the Chairman, Committee of e-Business Industry Heads (CeBIH), Celestina Appeal, said no doubt, banks have spent huge financial investments to deploy electronic banking channels and information technology infrastructure across Nigeria.

Appeal said the demand for customers to return old bank notes in line with regulatory requirements had caused a surge in the number of customers visiting bank branches and migrating to digital.

“As an impact of this surge, we witnessed some transaction failures on ePayment channels, and I am aware that banks quickly rose to the challenge of upscaling these channels and infrastructure to meet the demands. This situation is calm now, Banks have absorbed the lessons from these scenarios and are very well prepared to serve customers regardless of the level of demand or transaction traffic.

“I do not have the exact figure for the failure rates as it stands today, but going by our analysis, the failure rate (in percentage) has not worsened, the systems only experienced more failed transactions counts as a direct reflection of the increased overall transaction fed into the digital payment ecosystem,” she stated.

She disclosed that banks have been preparing for cashless for far more than a decade, the experiences of the last few months came as a well-deserved stress test for our digital channels, “this experience made us stronger and better to serve the customer. ”

According to her, it is important to note that in January 2023, CBN currently puts the amount of cash outside the banks as N788 billion, this represents a significant decrease when compared to N2.57 trillion before the end of 2022 .

“The objectives of the cashless initiatives remain sacrosanct, we are all aligned on the benefits to businesses, consumers, and the overall economy of Nigeria. Improved adoption of cashless will go a long way to tackle societal menace such as armed robbery, kidnapping, terrorism, advance fee fraud, corruption, amongst others.

“My advice would be for Nigerians to fully embrace cashless and continue to trust that at every stage of adoption, the CBN and banks would continue to work together to make the process seamless and beneficial to customers,” she stated.

Speaking recently on the banks’ IT infrastructure, the Country Director of BudgiT Foundation Nigeria, Gabriel Okeowo, said aside from the need for the availability of the redesigned notes, there was an urgent need for an overhaul of banks’ IT infrastructure for effective implementation of the cashless policy.

“If what is in circulation right now are the old Naira notes, it then means even the new Naira notes are not available. Also, as we speak, the queues have not completely gone, electronic transactions still decline and money is not reversed within 24 hours in most cases.

“Furthermore, the Internet infrastructure is not advanced enough for effective electronic transactions. If all of these are not put in place, I see a possibility of the extension of the deadline for use of old Naira notes beyond Dec. 31,” he said.

Recall that the Supreme Court had on March 3, ruled that all old denominations including N500 and N1, 000 notes remained valid till Dec. 31. The ruling followed hardship experienced by Nigerians as a result of the Naira redesign and cashless policy of the CBN, which took effect from Jan. 31.

While the cash scarcity eased a few weeks after the CBN complied with the ruling and directed banks to push out the old notes, the new notes have since become scarce. Bank ATMs are being loaded only with old notes.

With a few months to the new deadline fixed by the courts, the apex bank was expected to have started gradually mopping up the old notes while releasing the new notes, but that is not happening yet.

On his part, the Life Trustee and former President, CeBIH, Chuks Iku, the  the banks witnessed overwhelming pressure because the infrastructure deployed were not adequate, largely because the stretch witnessed on their infrastructure was sudden.

Iku said this was compounded by the fact that most IT support staff of banks have moved abroad.

While admitting that there are still several ePayment transactions that are currently hanging, he called on banks to invest afresh on their infrastructure, especially ahead of the December 31 deadline for the use of the old Naira notes to avoid a repeat of last quarter.