As part of the preparations for the Central Bank of Nigeria, CBN Cashless Lagos project, MasterCard Worldwide recently hosted several leading Nigerian banks at a training workshop that shared insights into global best practice in the electronic payments industry.
The training involved rollout of the cashless economy policy with the Cashless Lagos project focused on how financial institutions can build effective business relationships with retailers, the vast majority of whom have operated on a purely cash basis historically.
“As the Nigerian economy embraces the government’s cashless policy, many retailers who have not had experience in accepting electronic payments are looking to banks for guidance in setting up their infrastructure to accept electronic payments,” says Omokehinde Ojomuyide, Vice President, Business Development, West Africa, MasterCard Worldwide.
“By holding these training workshops, MasterCard is working closely with its customer financial institutions to ensure that best-practice principles are implemented by all stakeholders across the payments network in Nigeria.”
The cashless or cash-lite policy aims to modernise the country’s payment systems. One of the key elements is the reduction of banking services costs and the cost of credit, as well as driving financial inclusion by providing more efficient transaction options, and greater reach. It aims to curb the high cost of using and accepting cash as a payment method, and prevent corruption, leakage, money laundering and other fraudulent activities that cash can sometimes make easy.
“Cashless Nigeria is going to make everyday transactions easier for Nigerians, and it is going to remove the risk of cash-related crimes,” says Ojomuyide. “It will offer faster access to capital for entrepreneurs and companies wanting to grow, and in the long term it will facilitate increased economic development for the country through broader financial inclusion.”
A key outcome of the training workshop was the fact that for the Cashless policy to become a reality, it is vital that Nigerian banks formalise their agreements with retailers, to afford both parties the peace of mind that comes with a legally protected transaction.
Kirsten Wortmann, Business Leader, Card Acceptance, MasterCard Worldwide, who facilitated the event said: “Just as it is important for merchants to know where their money is going in an electronic transaction, it is essential that a bank trusts the merchants it is dealing with.”
He explained that when Nigerian banks establish relationships with retailers such as supermarkets, restaurants, hotels, and bars, they need to consider several factors, including anti-money laundering legislation; data security standards global, regional and local compliance; currency conversion; and loss control programmes, among others.
While it is imperative that retailers comply with these criteria, banks need to maintain a high level of service, including the speedy resolution of complaints, and retailer education and support. And arguably the most important party in any transaction – the end-consumers - need the banks to show them how to use their payments cards. This will also help them understand how using their payment cards protect them and simplifies their lives.
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