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Payment system records N49 trillion transactions, as BVN, TSA reduce fraud


PoS accounts for N54.3 billion
There were indications that despite the challenging economic situation and high-level sophistication of fraudsters, huge increase in the volume and value of transactions across all payment channels in the banking system has been recorded.

The development, which has been attributed to the implementation of monetary-fiscal policy measures, was said to have helped in strengthening the banking system, particularly, the payment system, as well as offered protection to customers’ identity and fraud exposure.

The Director of Banking and Payments System Department, ‘Dipo Fatokun, affirmed that there were 162.6 million transactions across all payment channels worth N48.9 trillion processed in 2015.

The figure however, was in contrast to 113.4 million transactions across all payment channels in 2014, worth N43.9 trillion and represented 43.4 per cent and 11.6 per cent increase in volume and value respectively.

He noted that the implementations of the Bank Verification Number (BVN), Treasury Single Account (TSA), the E-Dividend Project with the Securities and Exchange Commission (SEC) and other fraud mitigation strategies, had reinforced security in the operations of agent banking and other electronic payment channels.

Already, the Federal Government has uncovered about 23,000 ghost workers in its payroll, through the combined application of BVN and TSA, which at the minimum wage of N20,000, is estimated at over N5.5 billion yearly.

Meanwhile, as at February 7, 2016, a total of 23.4 million customers have been enrolled in the BVN scheme, which enforcement commenced by November 1, 2015, for those residing in the country.

So far, about 28.3 million accounts, out of the estimated 55.3 million active accounts have been linked to their respective unique identities industry wide, totalling about 51.7 million accounts already captured into the scheme.

Fatokun explained that while the actual loss resulting from fraud was put at N2.3 billion in 2015, it was far from N6.2 recorded in 2014, while the attempted fraud also fell to N4.4 billion from N7.8 billion, with an increase in volume of attempt from 1, 461 in 2014, to 10, 743 in 2015.

According to him, the significant reduction in fraud losses in 2015 puts the country’s electronic fraud rate at less than that of Europe as a whole, and particularly Portugal, which boasts of the least fraud rate in Europe.

He pointed out that the success in blocking the leakages was possible by vigorous enforcement of the various CBN circulars released to industry operators in 2015 and released prior to the year under review.

However, the Nigeria Interbank Settlement System (NIBSS) has said that out of 139, 182 Point of Sales Terminals (PoS) registered in the country, only 116, 868 were deployed, while the value of transactions as at December 2015, was estimated at N53.4 billion in 3.95 billion deals.

NIBSS further disclosed that Internet banking was responsible for 34 per cent of electronic banking frauds with three per cent noticed on the PoS, while e-Commerce was responsible for one per cent of the fraud.
Meanwhile, in the drive towards financial inclusion, a World Bank study revealed last year that a total of 39.2 million adult Nigerians (46.3 per cent of the adult population) were financially excluded in 2010. It further revealed that 54.4 per cent of the excluded population was women, 73.8 per cent were younger than 45 years, 34.0 per cent had no formal education, and 80.4 per cent resided in rural areas.
Interestingly, it noted that financial inclusion is most advanced in Nigeria’s urban areas, especially in the southern parts of the country.
Northern Nigeria is particularly disadvantaged, with 68 per cent of adults excluded in both the North-East and North-West regions.

The study noted that formal inclusion rates range from 49 per cent in the South-West region to only 19 per cent in the North-West region. The “informally included”, primarily live in the North-Central region, where 23 per cent of adults have access to only informal services.

To bridge the financial inclusion gap, the Central Bank of Nigeria (CBN) has developed a multi-prong attack that will reduce the percentage of adult Nigerians that are excluded from financial services from 46.3 per cent in 2010 to 20 per cent by 2020.

The number of Nigerians included in the formal sector was expected to increase from 36.3 per cent in 2010 to 80 per cent by 2020.
The approach includes; the transformation of existing Know Your Customer (KYC) regulations into a simplified risk-based tiered framework that allows individuals who do not currently meet formal identification requirements to enter the banking system; development and implementation of a regulatory framework for agent banking to enable financial institutions to bring banking services to the unbanked in all parts of the country; development and implementation of a National Financial Literacy Framework to increase awareness and understanding of financial products and services, with the ultimate goal of increasing sustainable usage.