By BUKOLA IDOWU, Lagos ~
As more bank branches offer reduced services in observance of COVID-19 protocols, more Nigerians have turned to agency banking, popularly known as PoS (Point of Sale), for easy and quick transactions.
LEADERSHIP Sunday checks revealed that of recent, there had been a significant uptick in the use of PoS, as banks and Super Agents licenced by the Central Bank of Nigeria (CBN) have cashed in on agency banking to contend with dwindling revenue and harsh operating environment.
The Super Agents include First Bank, Zenith Bank, Access Bank, Interswitch Ltd, Innovectives Ltd, Etranzact Ltd, Flutterwave and Glo.
The players in the Agency Banking value chain are: CBN (regulator), Super Agents, Payment Terminal Solution Providers (PTSPs) and PoS agents.
Although their numbers had swelled over the years, it was learnt their total transaction volume increased during the lockdown when automated teller machines (ATMs) ran out of money while banks remained closed.
Findings by this paper revealed that PoS agents are almost in every street, including beside banks, offering quick cash deposit and withdrawal services to bank customers who do not have the patience to wait on long queues to be attended to.
The PoS terminals are deployed by both the banks and the Payment Terminal Service Providers (PTSPs) to merchant locations such as shopping malls, filling stations, supermarkets, stalls and traders in open markets.
PTSPs are companies licensed by CBN to deploy PoS terminals; they include Unified Payments, Accelerex (Formerly Global Accelerex), ITEX Integrated Services Limited and Express Payments Solutions, among others.
The banks are being impacted by the economic and regulatory actions that have seen their sources of revenue reduced.
The global impact of COVID-19 on the international oil markets and reduced purchase and scarcity of foreign exchange has seen their multiple revenue streams impacted negatively.
This has left them with no option than to increase their focus on agency banking as they earn income through movement of money on customers’ bank accounts.
As of April 2021, industry data from NIBSS indicated that there are 844,000 PoS terminals registered with 543,109 connected while 374,000 are active on the NIBSS switch platform.
Over 65 per cent of PoS terminals are deployed by commercial banks nationwide.
One of the PSTPs, ITEX Integrated Services Limited, a foremost player in the segment, has 101,253 terminals registered, 59,000 connected and 40,000 active.
Nigeria Interbank Settlement System (NIBSS) data showed that there are about 307,000 PoS machines in Nigeria, 30,000 Automated Teller Machines, and over 6,000 bank branches.
However, only 167,000 PoS are active with many of them malfunctioning at the point of trial, while majority of the PoS terminals are not active.
According to latest report by the National Bureau of Statistics (NBS) on e-payment for the fourth quarter 2020, the record Automated Teller Machine (ATM) transactions in Q4 were 455,259,043 valued at N4.545 trillion.
The volume of ATM transactions decreased by 14.11 percent in Q4, while the value in Q4 decreased by 10.06 percent in quarter-on-quarter.
In October 2020, there were 151,924,854 ATM transactions; 158,259,049 in November, and 145,075,140 in December valued at N1.486 trillion, N1.553 trillion and N1.505 trillion.
On the other hand, PoS transactions in the same Q4 were 214,849,612 valued at N1.516 trillion, while volume of PoS transactions increased by 32.12 per cent. The value also rose by 25.49 percent.
In October 2020, there were 68,411,116 PoS transactions valued at N460.95 billion; in November there were 68,537,758 PoS transactions valued at N480.55 billion, while in December 2020, there were 77,900,738 PoS transactions valued at N574.37 billion.
It was further learnt that banks now use the PoS agents to reach areas where they cannot afford to go due to the high cost of operating in such an environment.
This is because they do not have to bear the cost of putting up a physical branch with the entire accompanying infrastructure or an ATM as well as the electricity supply and security that has to be constant.
It was also gathered that with the insecurities that abound in the country, banks are wary of putting up too much infrastructure in remote places where they are prone to vandalism, and so they rely on the services of POS agents in setting financial footprint where they cannot go.
According the National Bureau of Statistics (NBS) fourth quarter 2021 report, the headwinds experienced as result of COVID-19 had led to decrease of banks’ staff by -0.90 percent quarter-on-quarter (QoQ) from 95,888 in Q3 2020 to 95,026. This implies that no fewer than 862 banking staff were out of their jobs in the review period.
Presently, there are more than 200,000 agents around the country with First Bank having the largest number of agents, close to 90,000.
But in recent times, there had been growing complaints about excessive charges by the PoS agents whose charges have remained unmonitored, especially in areas where there is no banking presence.
In places like markets, the charges range from N200 to N500 to make a N20,000 withdrawal, even as charges on deposit can equally be as high.
A Lagos based PoS agent, Johnson who spoke with LEADERSHIP Sunday noted that since his shop is close to two banks and a MFB, his charges have remained low to attract customers.
He said he charges a N100 flat fee for deposits and not more than N200 for withdrawals.
Notwithstanding, Johnson said he makes a daily turnover of around N3 million to N5 million in a day.
Speaking with LEADERSHIP Sunday, bank customers lamented the excessive charges by some of the PoS agents, saying in most cases they have no option than to patronise them.
They said paying N200 or even N500 was better than waiting outside the bank for hours and then queuing inside the banking hall for another 30 minutes.
Bola, a resident of Abule Egba in Lagos, said it would cost her not less than N200 to take transport to the nearest bank branch and the same N200 to make a deposit or withdrawal just in front of her house.
“I only go to the bank when I have a complaint and it is not easy. Even though the PoS charges are much, I still think it is a cheaper option for me”, she noted.
Also, a PoS operator in Kano State, Alhaji Attahiru Mohammad, said, “As a matter of fact, this business is one of the most lucrative businesses you can start with a small capital. An average PoS merchant in a good location makes at least N10,000 profit on a daily basis.”
A customer and a 300 level student of the Abubakar Tafawa Balewa University, Bauchi, Adiza Lawal thanked operators of PoS, saying their services is a welcome development.
The student who said she pays her utility bills online through her bank app described the business as a big relief to Nigerians, particularly those in remote areas.
“Bank ATMs are always crowded and sometimes are unable to dispense cash; hence, people find it easier to get money from POS.
“Some remote areas have no access to banks where people can do transactions. But with the presence of PoS in markets, motor parks and the streets, we no longer have cause to worry”, she added.
Also, Abiola, a resident of Ifo in Ogun State said because there is no banking presence in his area, he only goes to bank when he has a complaint that is worth spending half of the day.
He said making withdrawals could be as high as N1,000 but it is still a better option than going to look for a bank.
Miss Justina Nwokoro, a PoS agent in Achingali, Obowo local government area of Imo State said it has become the easiest and quickest means of conducting financial transactions.
“People send money to their relatives in villages and small towns from urban cities and different states of the federation.
“Because of the distance to banks, they just come to us and use their ATM cards to collect their money. People building houses and household items send money to those overseeing their projects and they come to us to collect the money for a fee” she said.
Another POS operator in Obizi Ezinihitte local government area in Mbaise, Hyginus Ukoha, who commended the CBN for introducing agency banking, said apart from the fact that it has created employment for several unemployed youths in rural and urban areas, it has also reduced the stress people face going to banks to withdraw money from ATMs.
“The nearest banks to our neighbouring village are located 25 minutes away by motorcycle or vehicle and they are in another local government area. All the banks are at Ahiara Junction, Ahiazu LGA of Imo State. It saves our people time and they can patronise us event after the closure of banking hours at our kiosks and homes, he said.
The Group Executive, e-Business and Retail Products, First Bank of Nigeria Limited, Mr. Chuma Ezirim, told LEADERSHIP Sunday that the roles played by Firstmonie agents in promoting businesses across the nooks and crannies of the country have continued to set the pace in extending financial inclusion to communities with little or no access to financial services.
“With our Firstmonie agents in every neighbourhood, several communities have witnessed a surge in business and financial activities, which is contributory to national growth and development. We commend our Agents and are delighted to support them with credit facilities, which they can access 24hours a day in less than two minutes
“Located in every neighbourhood, Firstmonie Agents have been integral to filling the financial exclusion gap, providing convenient banking services that are easily accessible, thereby saving time and travel costs for individuals in the suburbs and remote environments that have no access to financial services,” Ezirim added.
Also, the deputy managing director of Etranzat, an agent banking network which also runs Pocketmoni, Hakeem Adeniji-Adele said, “It is about financial inclusion and it is about how we reach the last mile, how to get financial inclusion to every part of the country. For us what makes sense is that we are part of the financial inclusion ecosystem and we are also part of SANEF and we are proud of it and take it seriously. Not everyone can open an account today because not everyone still has a NIN or BVN. But through Pocketmoni they can be part of the financial system.
“The more people get involved in this the better for the country in addressing poverty. How do we influence people that don’t feel they belong? Financial system is a way to bring people out of poverty.
On charges, he noted that the charges are actually inconsequential when compared to the services being rendered. We charge N10 to N15 for cash-out.
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