Advancement in the payment system comes with its own challenges, a situation that has made it imperative for the government, private sector organisations, and international partners to engage in strong and cohesive collaboration.
This was the focus of discourse amongst stakeholders from regulators to operators in the digital payment space at the 2023 edition of the Finance Correspondents Association of Nigeria (FICAN) annual conference in Lagos.
Speaking on “Strengthening Digital Infrastructure for Efficient, Innovative Payment Systems in Nigeria”, the head, Digital Banking at United Bank for Africa, Olukayode Olubiyi, noted that, digital payments have become an increasing target of cyber hacks and attacks.
Affirming that the increasing attacks could result on loss of confidence in the ecosystem if not addressed, he said, addressing digital threats is a pressing need that would require the support from all stakeholders in checkmating the growing threats.
Stating that Nigerian banks lost a total of N9.5 billion to electronic fraud within first eight months of 2023, he said, cyber threats is the most prevalent threats facing digital payment technology presently.
Olubiyi stressed further that the digital ecosystem has produced an avenue for large volume of customer data to be harnessed electronically, adding that, the data could be unduly exposed to external parties that would use them to facilitate identity fraud amongst others.
Asides this, he said the japa syndrome has led to the loss of critical skill sets to foreign countries, posing “major threats to our growing digital payment infrastructure. These skills are necessary for innovation and sustaining the success in the space.”
In addition, he said, there is need for the regulations covering digital payments should be robust and designed enable a secure and competitive landscape for digital payments players to run seamlessly, as “lack of proper or insufficient regulatory oversight over the digital payments systems can result in major and systemic loss of business.”
On his part, the group chief financial officer of Parthian Partners, Olayinka Arewa, disclosed that Nigeria unlocked $3.2 billion in additional economic output through the development and utilisation of electronic payments, particularly real-time payment services in 2022.
“Globally, financial technology has reshaped the consumer experience, with individuals seeking the convenience of conducting transactions anytime, anywhere. Take, for instance, Parthian Partners’ investment app, i-invest, which offers a secure platform for individuals to easily access investment opportunities such as Fixed Deposits, Treasury bills, Eurobonds and even stock purchases on the Nigerian Exchange in one breath.
“Once your i-invest wallet is funded, you can invest in any product of your choice from anywhere you are in the world and at any time of the day. This would usually not take you more than five minutes,” he said.
Speaking on the potential of the sector, he noted that, “Electronic payments offer manifold benefits to our economy. In 2022, Nigeria unlocked $3.2 billion in additional economic output through the development and utilization of electronic payments, particularly real-time payment services. Electronic payments continue to attract substantial global investments and have exhibited the highest returns and growth within the sector over the past decade. As one of Africa’s largest economies, Nigeria is well-positioned to harness the potential within this sector.”
Arewa pointed out the lack of operational telecommunications facilities and an unstable power supply as significant challenges facing the sector and echoed the call for collaboration among stakeholders, including financial institutions, fintech companies, government entities, and regulatory bodies to tackle these burgeoning issues.
He emphasised that policy, regulation, and collaboration are pivotal elements in the success of innovative solutions in the Nigerian financial services sector.
“Collaboration among stakeholders, including financial institutions, fintech companies, government entities, and regulatory bodies, plays a pivotal role in ensuring the success of innovative payment solutions,” he said.
“This alignment will boost technology and infrastructure, expedite the adoption of digital payments, and further enhance financial inclusion in Nigeria. Ultimately, it boils down to policy, regulation, and collaboration. If parties are inclined to collaborate, many of the frictions currently experienced in the Nigerian financial service sector can be mitigated,” he affirmed.
Deputy director, Nigerian Communications Commission (NCC), Engr. Anthony Ikemefuna, said, strengthening digital infrastructure for efficient and innovative payment systems in Nigeria requires a multi-faceted approach involving various stakeholders, including government agencies, regulatory bodies, financial institutions, technology providers, and the private sector.
According to him, investing in digital infrastructure by expanding and upgrading broadband and mobile network infrastructure, particularly in underserved and rural areas as well as promoting digital literacy and inclusion whilst strengthening regulatory frameworks and enhancing cybersecurity measures are ways to ensure an efficient payment system in Nigeria
