The Central Bank of Nigeria (CBN) has said only 57.4 million Nigerians have Bank Verification Number (BVN).
The CBN, in collaboration with the Nigerian Interbank Settlement System (NIBSS), bankers committee, and Nigerian deposit money banks launched the BVN project in February 2014.
The BVN was introduced as a means to uniquely identify customers of Nigerian banks, reduce fraud, and improve the efficiency of banking operations in the country.
Also, the Paex bank said 7,500 BVNs have been watchlisted for alleged fraudulent transactions.
CBN Governor, Godwin Emefiele made this disclosure in Calabar at the 34th seminar for Finance Correspondents and Business Editors.
Emefiele, who was represented by the Director Monetary Policy Department of the CBN, Dr. Hassan Mahmoud, said: “With a total enrollment of 57,431,355 as of 31st March 2023, the BVN is supporting the development of credit profiles for banking customers, which will assist in improving access to credit for credit-worthy borrowers by banks.”
Emefiele stated that BVN has continued to feature in the bank’s Know Your Customer (KYC) requirements as part of plans to ease the constraint associated with poor identification of banking customers.
The CBN, he said, will “continue to support the aggressive enrollment of prospective banking customers in the informal sector onto the BVN system”.
Emefiele added that the Payments System Vision (PSV) 2025 was introduced “to expand payment options available to customers and strengthen regulation of the payments system”.
Speaking more about the payments system, the CBN governor noted that the apex bank now uses the “payments system as a tool to achieve the financial inclusion goals of the country”.
To this end, the CBN governor revealed that “while the use of cash and cheques continued to diminish, web-based transactions such as POS, NIP, ATM, and MMO have increased substantially”.
“For instance, between 2012 and 2017, the volume of transactions via electronic channels such as ATM, POS, WEB, MMO, and NIP increased by 99.76, 1,775.72, 35,502.58, 2,413.44 and 836.50 percent, respectively,” Emefiele said.
With regards to the eNaira initiative, the CBN governor stated that the eNaira was developed and launched in 2021 “to broaden the payment possibilities of Nigerians, foster digital financial inclusion, with potential for fast-tracking intergovernmental and social transfers”.
Since its launch, the CBN has continued to modify its features to make it more accessible to a wide range of users.
According to Emefiele, “over 1.4 million transactions have passed through the eNaira platform and one does not need a smartphone to use the eNaira as it has become compatible with all generations of mobile devices (old and new).
The suite of initiatives like Open banking; Regulatory Sandbox; Cardless and other contactless payment options he said have helped to open a vista of new opportunities in the payment ecosystem.
“With these revolutionary technological developments, the market has witnessed the deployment of new payment solutions,” Emefiele said.
“Artificial intelligence, quantum computing, and contactless payments are some of the areas creating new opportunities for operators” he added.
It has not been all rosy for the CBN with regard to payments system development.
Emefiele lamented that the CBN has faced some challenges in implementing these initiatives. Some of the challenges are Weak social infrastructure occasioned by telecommunication networks and power infrastructure that is not optimal in Nigeria, thus, impacting the stability and resilience of the payments system.
The activities of unlicensed entities he said “have continued to exploit access to information technology to engage in regulated activities without the appropriate licenses and authorization.
There is also the challenge of cyber threats and fraud. Emefiele expressed concern that “the activities of fraudsters continue to threaten the resilience of the payment platforms”.
“The confidence of the public is impacted by these activities. However, the collaborative effort between the Central Bank of Nigeria and other players in the industry is helping to curtail the nefarious activities of these fraudsters” he assured.
Meanwhile, the CBN has hinted at its plans to carry out an intensive audit of all payments systems to strengthen e-payment infrastructure for seamless services.
This is in preparation for the December 31, 2023 exit of old denominations N1,000, N500, and N200 banknotes from circulation.
The CBN does not want to be caught unawares by a payments system collapse like what was experienced when it tried to implement the Naira redesign policy.
Deputy Director, of the Payment System Management Department of the CBN, Adeyemi Adefuye, said there would be an infrastructure audit noting that no operator wants to be on the bad side of the audit report so operators in the system will invest massively in upgrading their infrastructure.
He was optimistic that “before the end of the year, things will improve drastically in the payments system environment”.
Ahead of the December transition of the old notes to the new ones, Adefuye said the CBN is “ready for December. There will be initial resistance and loss of confidence in the process but over time, confidence will be restored and we will be alright”.
The CBN said Cybercrime Acts’ enacted in 2021 was to address National Cybersecurity Policy and Strategy
It said with these initiatives in place, the CBN has demonstrated irrevocable commitment to ensuring the stability and safety of the Nigerian payment system.
Accordingly, the apex bank said it shall continue to deepen our oversight of the activities of operators in the payments system as well as ensure full compliance with regulations. In this regard, examiners and supervisors would continue to ensure that services delivered by participants meet required security standards.
“The bank will also continue to adopt a collaborative approach to achieve minimal cybersecurity threats in the payments system. A holistic mechanism for addressing cybersecurity threats requires policy and operational actions by all stakeholders. As you are aware, effective January 2023, the Bank issued a Risk-Based Cyber-Security Framework and Guidelines for Other Financial Institutions, to ensure their operational resilience in the face of cyber-security threats,” it said.
According to the CBN, The Bank Verification Number (BVN) has also helped the industry in investigating fraud and other related crimes.
It said the activities of fraudsters continue to threaten the resilience of the payment platforms.
“The confidence of the public is impacted by these activities. However, the collaborative effort between the Central Bank of Nigeria and other players in the industry is helping to curtail the nefarious activities of these fraudsters,” it said.
