Two days to the New Year, the demand for cash, Point of Sales (PoS) and online transactions has reached the season’s high in Nigeria. This has led to thousands of failed transactions on Automated Teller Machines (ATM), Pos and online service portals, as consumers rush for holiday shopping and payment of other services.
With the commencement of cashless policy in Lagos in 2012 many Nigerians have adopted the method of making online or PoS payments with their debit cards. However, a significant number of Nigerians still doubt that the country is fully ready for this transition as the complaints seem to be on the rise, especially during demanding festive seasons.
Although there has been constant growth in the use of electronic payments across the country, analysts say that there could have been faster and larger growth with the absence of systems failure, network problems and the introduction of more advanced payment methods asides the usual chip and pin PoS transaction and complex online methods of payments.
Sade Ajayi, a customer at one of Nigeria’s large retail shops complained about the problems she has been experiencing on ATM and PoS channels.
“I did some shopping for Christmas and after piling my shopping trolley with groceries, I got to the payment till and the attendant told me that the server was down and so I could not pay using my debit card. I had to go out to try and use the ATM but it wasn’t dispensing cash either, so I had to forgo some items and pay for the most important ones with the cash I had,” she told BusinessDay.
Daniel Saleh, another customer expressed his disappointment saying; “Even on weekends, most ATMs in Lagos are empty and unable to dispense cash, not to talk of during festive periods especially Christmas. This problem has been unresolved for years.”
Deji Oguntonade, the Group Head, Electronic Payment Solutions, Guarantee Trust Bank Plc, explained that network challenges on PoS terminals were being tackled with new innovations and that most of the people with complaints are customers of Small and Medium Enterprises (SMEs) who usually use the Global System of Mobile communication Subscriber Identification Module (SIM) cards.
He said that users of the PoS terminals at places like Ikeja City Mall had less network challenges because “they are on an Internet solution and not SIM card solution. Anywhere there are clusters, we deploy Internet connectivity or better data bandwidth, but it would only be economical where there is a cluster of people.”
According to Austin Okere, founder of CWG Plc: “Most banks opt out of weekend support for ATMs in order to save support money. During the week, the ATM infrastructure benefits from the widespread support from the branches where they are located.
“The bank’s custodians ensure that the surround environment such as power and networks links are available, and any cash jam or out of service issue is quickly resolved or escalated to the support company.
“It is during the weekend and holiday periods when that support structure is unavailable that ATM attendance is most required. And it is precisely this critical period that banks choose not to support their ATMs in order to save cost.”
Just a few days to the New Year, many Nigerians still queue up in banks and ATM points to get physical cash, an indication that some Nigerians are yet to fully welcome the cashless policy, three years after it was introduced.
BusinessDay’s survey of selected banks across Lagos, on December, 24, 2015 when all banks closed banking hall operations after working half day and yesterday, December 29 when they re-opened, showed that the demand for cash amongst Nigerians is still very high, especially during the holiday seasons when banks will either be closed or have limited operating times.
In the past few days of Christmas festivities, gearing up for the New Year, BusinessDay findings have revealed increased queues in banking halls and at ATMs. It was revealed that as much as 80 per cent of bank customers withdrew cash while 20 per cent were in the bank for cash and cheque deposit, even though 90 per cent of bank customers have ATM cards and have the option of transacting through POS terminals.
According to the CBN, there were 15,000 ATMs’ in the country as at June 2014, a significant increase from about 11,000 as at the end of 2013. As electronic payments gain ground, the number of connected card readers has increased to more than 180,000 from 5,000 before 2012.
A recent survey showed that, of all the bank channels, customers used ATMs 68% of the time, with most customers using the ATMs more than once a week. The ATM has assumed great importance as the barometer of a bank’s brand as far as customers are concerned.
The survey also shows that the local online shopping sector grew from N49.9 billion to N62.4 billion between 2010 and 2011 and from N62.4 to N78billion the next year. These figures keep growing year on year. However customer’s complaints on cash alternative transactions remain the same.
The Nigerian Interbank Settlement System (NIBSS) stated that since January 2014, it has seen tremendous growth in electronic payments trends on its platforms.
“In July 2014, NIBSS for the first time since its history recorded over 10,000,000 e-payment transactions on its platform during the month.”
However, it did not state how many of these transactions were successful.
Many bank customers are also losing confidence in electronic payment systems as a result of slow and inefficient dispute resolution when issues relating to faulty ATM or online transactions arise, especially during the end of year holiday season when the banks would either be shut or most of their staff would take their annual leave.
These e-payment systems constitute a huge security measure as the previously rampant attacks by robbers on cross-country transports have reduced by over 90 percent. This is because travelers, especially traders no longer need to carry cash as they can now conduct transactions electronically, transiting from traditional cash payment.
