The Central Bank of Nigeria (CBN) is about to introduce a new cashless payment system in Nigeria.
Known as contactless payment system, the CBN will issue the guidelines for the operation of the cashless innovation in a few months time.
The introduction of contactless payment is another tool the apex bank will introduce before December 31 to mitigate any inconvenience that may arise when the old notes make way for the new ones.
Adefuye described the contactless payment system as a technology that “enables an alternative payments method whereby payment instruments are used without physical contact with devices”.
When operational, payments can be made using QR Code, NFC (Near Field Communication) which is a technology that allows two devices – like your phone and a payments terminal – to talk to each other when they’re close together.
Adefuye noted: “Contactless technology in payments will provide easy, convenient, and efficient cashless options for users. Create shorter queues at checkout points.”
The instruments that will be used for contactless payment “include pre-paid debit and credit cards, stickers, fobs, wearable devices, tokens, and mobile electronics devices’’.
An interesting feature of the contactless payment is the introduction of Free on board (FOB). In this case the risk of loss shifts from the buyer to seller.
Adefuye identified some of the benefits of contactless payment to include ease of payments, speed and convenience to consumers’ in-person transactions using their phone thus enhancing customer experience”.
The CBN he said foresees “increase in spending, revenue and profitability which grows the retail business leading to increase in GDP”.
Adefuye stated the features of the contactless initiative as, “it is more secured than traditional payment method thus give customer peace of mind; it will reduce printing of currency thus save the regulator cost of printing and managing currency in circulation; and it reduces spread of contagious diseases during payment due to the lack of contact”.
Also speaking to the advancement of the payment system in Nigeria, Niyi Toluwalope in his presentation stated that “Nigeria’s Payment Architecture has developed into one of the most advanced payment ecosystems globally, in terms of development and adoption of modern payment systems”.
Toluwalope added that “payments in Nigeria has entered a new era of growth and requires that stakeholders view payment infrastructure through new lenses”.
He argued that “efficiency can be achieved by reducing repetitive investment in payment infrastructure, while ensuring competitiveness by empowering a qualified set of fintechs with demonstrable capabilities to provide payment infrastructure needs for the rest of the industry-they are called Super-Fintechs”.
