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ATMs overwhelmed as low use of PoS persists

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The festive season may have come and gone, but bank customers in Nigeria are clearly yet to get over the anger and anxiety experienced during the period while standing in long Automated Teller Machine (ATM) queues.
New Telegraph’s findings in the days leading to and during the festive season showed that in cities such as Lagos, which has a significant deployment of ATMs, a lot of the machines were not dispensing cash, either due to network failure or shortage of money, thus resulting in bank customers waiting endless hours at the relatively few ATMs that were dispensing cash during the period.
While some industry sources attributed the frustrating ATM queues to the cash shortage that the banking industry experiences in festive periods when there is usually a spike in cash demand, this newspaper gathered that the situation could be avoided if more Nigerians embrace PoS over cash payment.
A top official of a new generation bank, who spoke on condition of anonymity, told our correspondent that although the long ATM queues noticed during the Christmas and New Year season was partly due to the huge demand for cash during the period, which, according to him, was occasioned by the failure of the Central Bank of Nigeria (CBN) to print adequate volume of cash, the main cause of the problem is Nigerians’ general preference for cash transactions over PoS.
He said: “During holidays, it is normal that the demand for cash rises. But during this period, CBN does not print enough cash thereby leading to cash shortages in the system. It is even worse up-country where banks’ bullion vans have to travel long distances to be able to get cash from CBN. However, the main reason for the long queues at ATMs is that most Nigerians are yet to fully embrace PoS. They still prefer to pay and receive cash for transactions that they could easily have used their cards to do at a PoS terminal.
“For instance, if you carry out a survey of operators in the small and medium enterprises (SMEs) as well as the micro small and medium enterprises (MSMEs) sub-sector, you will find that only a negligible percentage use PoS,” he stated.
Corroborating him, the Head of Operations at a Tier 2 bank branch in Lagos, who did not want to be named, revealed that from her interactions with customers, a lot of them said that they prefer using ATMs over PoS because of the shorter period it takes banks to resolve issues of dispense error for the former compared with the latter.
According to her: “Despite the CBN’s cashless policy, most Nigerians still prefer carrying cash about instead of using PoS and that is the reason why you see long queues at ATMs. Also, most customers feel that the length of time it takes to resolve issues such as when a customer’s account is debited for a payment that the intended beneficiary never receives is far too long for PoS transactions compared with ATMs’. It takes about a month to resolve this kind of error when payment is made at a PoS terminal, whereas it can be corrected within a week if it is an ATM transaction.”
Interestingly, at the PoS innovation summit held in Lagos last October, merchants making use of PoS terminals for transactions at their locations identified factors hindering the use of the device as a means of payment.
These factors include lack of credit backing for PoS transactions by banks; +two days settlement arrangement; placing of burden on customer for technology failure among others.
Specifically, President, Association of Mobile Money Agents in Nigeria, Sarafadeen Fasasi, said that the practice of +two days settlement arrangement for transaction on the PoS is a major challenge in the business of using the device as a means of payment.
“By policy, settlement should be done in one day of the payment, but today that is not obtainable in practice as what we get is +two days. This means that if a merchant gets payment through PoS device today by 10am, he will not get value in his account till 6pm tomorrow, which means he has lost two days of business. This settlement system slows down business for us merchants as well as does not optimize the benefits of PoS system,” he said.
Also, Managing director, ARTEE industries (SPAR), Mr. Prakash Keswani, stated that the system of transferring burden of technological failure in the process of payment through PoS on the customer is worrisome instead of the provider of the device.
“We often face with a situation where transactions did not go through and customers account debited and not reversed immediately expecting the customer to go to their bank and fill one form or the other. In some cases customers insist on going with the goods they purchase,” he explained.
However, despite these challenges, latest data from the Nigeria Interbank Settlement System (NIBSS) shows that the country has recorded a significant increase in the value of transactions via PoS channels.
According to the NIBSS, the value of PoS transactions increased by 65per cent to hit N651.37 billion between January and November 2016, compared to N395.05 billion recorded in the same period in 2015.
The figures also show that November 2016 recorded the highest value of transactions with N81.15 billion worth of transactions carried out in that month alone. In the same month in 2015, only N40.25 billion worth of transactions were recorded.
Significantly, the figures reveal that that 51 per cent of volume of transactions in 2016 occurred in Lagos with 32.7million, followed by Abuja with 6.8million and Port Harcourt 5.1million.

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Telecoms’ GDP leaps to 1.8% growth

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From a decline of -3.28 per cent in the fourth quarter of 2017, Gross Domestic Product (GDP) growth rate in Nigeria’s telecommunications sub-sector jumped to 1.8 per cent in the first quarter of this year, New Telegraph has learnt.

This, according to latest data from the National Bureau of Statistics (NBS), shows a general improvement in the Information and Communication sector.

The telecoms and information services, which come under the Information and Communication sector in the NBS’ categorisation of economic activities, had in the last three quarters recorded negative growth rate as it fell by 1.9 per cent in second quarter 2017. In the third quarter of same year, it also went down by -5.68 per cent. By fourth quarter, the sector still went down by -3.28, even at the time when the overall GDP growth rate of the country looked positive.

However, the telecoms sector has shown remarkable signs of growth since the beginning of this year as subscriber data continue to surge.

Analysis of active mobile subscriptions in the first three months of the year shows that the telecom operators added 4.2 million subscribers within the period. Data subscriptions on the four GSM networks also crossed the 100 million mark in January and have maintained a steady growth.

The Information and Communication sector is composed of the four activities of Telecommunications and Information Services; Publishing; Motion Picture, Sound Recording and Music Production and Broadcasting. In nominal terms, the first quarter of 2018 saw the sector grow by 1.79 per cent (year-on-year) , a 7.25 per cent points decrease from the rate of 9.04 per cent recorded in the same quarter of 2017. However, it is 2.34 per cent points higher than rate recorded in the preceding quarter. The quarter-on-quarter growth rate was 3.58 per cent. The Information and Communications sector contributed 10.64 per cent to total Nominal GDP in the 2018 first quarter, lower than the rate of 11.43 per cent recorded in the same quarter of 2017 but higher than the 10.04 per cent it contributed in the preceding quarter.

The sector, in the first quarter of 2018, recorded a growth rate of 1.58 per cent in real terms, year-on-year. From the rate recorded in the corresponding period of 2017, there was a decline by 1.15 per cent points. Quarter on quarter, the sector exhibited a growth of –4.15 per cent in real terms. Of total real GDP, the sector contributed 12.41 per cent in 2018 first quarter, lower than in the same quarter of the previous year in which it represented 12.46 per cent but higher than the preceding quarter, in which it represented 11.35 per cent.

Analysts see the growth rate as a positive sign of more economic activities in the sector, leading to job creations and increased contribution to the economy.

Citing the NBS statistics, Executive Vice Chairman, Nigerian Communications Commission (NCC), Prof. Umar Danbatta recently disclosed that the telecoms sector in the first quarter of 2017 contributed N1.45 trillion to the GDP, adding that in the second quarter, the figure rose to N1.549 trillion.

“This performance at a period of recession is very remarkable,” he said. “We are keeping dates with the NBS to identify and track how these trends progress. On the aggregate, the telecoms industry’s contribution to GDP in Nigeria stands at 10 per cent.

“But the figures may not tell the entire story. Investments in the sector, in human and material resources, have continued to soar. In 2001, the telecom sector could boast of a mere $50 million worth of investments but as at September 2017, we have investments worth $70 billion. The Value Added Services (VAS), segment of the telecom market in Nigeria today is worth $200 million and is estimated to grow to $500 million by 2021. The industry has provided both direct and indirect employment opportunities, accentuated growth and expansion.”

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Reps probe Pencom over alleged financial mismanagement

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The House of Representatives has resolved to investigate the National Pension Commission (PENCOM) over alleged reckless financial management of retirees’ funds and infraction on the public procurement Law. The House has consequently mandated its committee on public procurement and pensions to carry out a comprehensive investigation on alleged monumental fraud ongoing at the commission.

 

The decision followed the passage of a motion sponsored by Hon. Zakariya Galadima on the “need to investigate the alleged violation of provisions of the public procurement Act and financial mismanagement by the National Pension Commission (PENCOM)” During debate, the legislators faulted the commission over several financial infractions as against the principles and objectives of the provisions of the Pension Reform Act, which required the commission to collect and utilize fees, levies and penalties prudently in accordance with its regulatory and compliance roles. For instance, part of the 2014 Act authorizes PENCOM to invest the retiree funds in order to generate revenue but the lawmakers are worried that such investments powers of the agency have been grossly eroded by financial abuses.

 

In his lead debate, Galadima faulted the agency over several financial mismanagement while expressing worry that PENCOM engaged in fraudulent practice by investing N1billion into Aso Savings and Loans Plc under its investments portfolio at a ridiculously low interest rates and further directed Aso to lend the money to MGSL Mortgage Bank Limited where a top PENCOM management staff has interest.

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Confectionery firm hosts BBNaija ex-housemates

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Infusion Cakes & Cafe, a Lagos-based confectionery firm, has hosted ex-housemates of the reality TV show, Big Brother Nigeria (BBNaija), in a meet and greet session in Lagos recently.

Founder and chief executive of Infusion Cakes & Cafe, Mrs. Ibigbeye Okobi, in a statement, said the company decided to host the BBNaija ex-housemates because: “We really enjoyed the free spirit they exhibited, how natural they were and how they were able to get Nigerians to actually get engaged in everything they did while in the house.”

Okobi said the management of Infusion Cakes & Cafe also felt that the location of the company in the highbrow Lekki area of Lagos would serve as an excellent platform for Nigerians who were keen to meet the ex-housemates, get to know and interact with them in a friendly and hospitable environment to really appreciate them.

Infusion Cakes & Cafe is a modern bakery and cafe where customers can get a combination of international and locally made cakes, coffee, pastries and desserts for refreshment, weddings and special occasions like birthdays and anniversaries, among others.

The highlight of the event was a competition for the decoration of cakes. Participants in the competition included the reigning Miss Nigeria, Miss Mildred Peace Ehiguese; one of the BBNaija ex-housemates, Anto; and a representative of Team Definition, a band of musical artistes which entertained guests at the session.

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