Cashless Lagos FAQs

http://www.sludba.com Will the charges be applied per transaction, daily or monthly? Charges will be applied daily, since it requires the total daily amounts above the limit Will it devalue the Naira in anyway? No. we are spending more money printing and destroying notes. It might even strengthen the naira. Will customer or cardholder be charged 1.25% for using POS? The 1.25% transaction fee will be paid by the merchant.   Will a signatory to a corporate account be allowed to withdraw on the corporate account over N150,000 since he is one person? If a representative and signatory to a corporate account present a cheque on behalf of his company, it is considered a corporate withdrawal and he can cash up to N3, 000,000 cumulatively on that account. Why should a merchant pay 1.25% of transaction fee subject to a maximum of N2000? The fee is distributed to different parties for playing different roles in ensuring the POS system works well.  The fee enables the parties to recover the cost of the POS, the cost for support, maintenance, connectivity of the POS system, amongst others  If you do not use POS, you will still pay a penal fee above 1.25% for cash transactions in excess of the cash policy limit Merchants should also recognise that there are other ways in which the POS terminal can benefit them – they can sell other services and earn a commission. For example, mobile credit can be sold through the terminals; or collect bill payments (eg PHCN bills). Why is CBN introducing the cash policy and what are the benefits? To enable the achievement of the nation’s vision 2020 objective To reduce huge cost associated with cash handling (printing, storing, processing, distributing, etc) To reduce risk of robbery To increase convenience/access to payment (more payment options) To enable more transparency in payment systems, and allow for more effective monetary policy Reduce cash-related crimes for safety of bank customers and the general public. Who trains a merchant to know how to use a POS? Training will be provided by the acquirer’s payment terminal service provider (PTSP). Part of the deployment process is to ensure a practical training of how to use the POS for the merchant and their staff When will the charges begin? The charges on cash deposit/withdrawal above the set limit will begin FROM March 30, 2012. When will my account be credited when people pay with card? Your account as a merchant that accept payments through POS will be credited on T+1. This means that amount for today’s transactions will be credited into your account tomorrow (if tomorrow is a working day). When is the cash policy taking effect? The cash policy takes effect on January 1, 2012 in Lagos as pilot Nationwide implementation of the policy will commence from June 1, 2012 What will happen to CIT operations? Are they going to close shop? No. They will still be relevant. The cash policy means “less cash” not “no cash”. The amount of cash in the system will just reduce. What is the plan to create awareness of the cash policy? Stakeholders interactive engagement has been done but will be on-going Grass root sensitization at different markets in Lagos has also been done. Mass media campaign has commenced. What is the cost of POS? The industry has endorsed four manufacturers for supply of Point-of-Sale terminals - PAX, Bitel, Ingenico, and Verifone - with negotiated discounts and local support arrangements. A PoS can be purchased from any of these four for as low as N45k per terminal. However, parties are free to purchase PoS terminals from any manufacturer, so far they meet the PoS specifications in the Point-of-Sale guidelines. What is the CBN cash policy? The CBN cash policy stipulates a daily cumulative limit of N500, 000 and N3, 000,000 on free cash withdrawals and lodgments by individual and corporate customers respectively in Lagos State with effect from March 30, 2012. Individuals and corporate organizations that make cash transactions above the limits will be charged a service fee for amounts above the cumulative limits. Furthermore, 3rd party cheques above N150, 000 shall not be eligible for encashment over the counter with effect from March 30, 2012. Value for such cheques shall be received through the clearing house. Banks will discontinue cash in transit lodgment services rendered to merchant-customers with effect from January 1, 2012. What is NIBSS instant payment? NIBSS instant payment is new and it enables people to transfer funds immediately between two accounts within same bank or in different banks. This is currently being offered by a few banks. What is CBN doing to address the issue of card acceptance? CBN has already issued a circular to break exclusivity of card. Within Nigeria, all cards will be accepted at any terminal. There will be no more “only MasterCard or VISA accepted here”; every POS terminal will accept any of the cards issued in Nigeria. What is CBN doing to address card fraud? The ATM fraud was prevalent when Nigeria was using magnetic stripe cards. Nigeria migrated all their cards to chip+PIN which is more secured and drastically reduced the fraud level. With Chip and PIN the chances of fraud are reduced, provided you keep your PIN number secret. The CBN ATM Fraud Prevention Committee comprising banks, EFCC, NIMC, Interswitch, Valucard, CPC, PCC and many others deliberate monthly to make our e-payments more secured.. Nigeria electronic Payment Fraud Forum has been inaugurated to share strategy for fraud prevention. What is CBN doing on enhancing the laws such as evidence Act to support electronic payments? The Payments System Management Bill and Financial System Ombudsman Bill are before the National Assembly for enactment  Evidence Act is also undergoing a review What is CBN doing about regulating commission? CBN is currently reviewing the guide to banking charges, to ensure an open and transparent view of the various banking charges. It is also important to note that some banks already offer ZERO COT accounts. What is CBN doing about many unresolved issues with the banks on ATM card fraud or dispense error that drag for too long? The CBN stipulated 72 hours for responding to ATM complaints by banks, failing which the customer can escalate issue to the CBN. The CBN is also trying to establish a card arbitration panel or payments system ombudsman to fast track resolution of dispute. The issues has drastically reduced with the migration of cards to Chip and PIN What is being done about the people who are going to be laid off due to the new cash policy? There will be no layoffs due to the cash policy. Banks will still need to operate cash; but the number of people needed to manage cash will reduce. These people will be trained and redeployed to other departments in the electronic area – for product development, support and other needs. What are the alternatives to cash payments? Any of the under listed channels can be used for electronic transactions instead of cash; • Point-of-sale (POS) terminals • Mobile payment system • Internet banking • Multi-functional ATM • Electronic Funds Transfer Systems • Direct debit for regular in nature bills payment Must I use all the alternative payment channels? You can use any one that suits your need You can equally use more than one or all depending on your needs, but it is not a must for you to use all. More than half of the Nigerian population are not literate. How will they use e-payment channels? The literacy required is basic numerals. Many Nigerians can use a mobile phone, so they can do mobile payments. They can also recharge their phones, so they can surely enter PIN into their phones or POS. In addition, biometrics is being used at some ATMs and POS. It is important to note that literacy is different from numeracy; Nigerians are quite numerate especially when currency is involved; and what is required for these electronic systems is numeracy. Is there any charge on the amount spent by a customer in my shop?  You will only be paying 1.25% of the transaction (amount spent by customer) subject to a maximum of N2000 per transaction. Is the policy on third party cheques immediate or it will take effect from March? The policy takes immediate effect. However, Banks are encouraged to accommodate their customers and educate them that from March there will be no accommodation. In a situation where armed bandits get on a bus and force passengers to give their ATM cards and pins. How do you prevent such? This is beyond the cash policy. If there was no cash policy, they’d just collect your money. It would even be much easier. Also, robbers can’t carry around POS systems as these are only given to businesses and associations. If I withdraw N600, 000 which is above the limit how will I be charged? You will be charged the processing fee on N3,000.00 ONLY If a VISA or MasterCard issued outside Nigeria is used, is the T+1 settlement cycle going to apply on Visa and MasterCard? T+1 only applies to cards issued in Nigeria. For card issued outside Nigeria, the settlement cycle should be about T+3 at most. CBN is reviewing this settlement cycle with the various key stakeholders to see how it can be aligned in line with the local settlement framework. If a POS or mobile phone is stolen, does it mean that all the money of the users of such devices are stolen? No. The money of the user is safe as the devices do not hold the money. The money is in the user’s account in a bank The person that stole the devices cannot use them to access your account since they don’t have your PIN number and other information. How will the POS benefit me? It saves you from robbery, theft, cost of cash management, hassles of counting cash, looking for change, getting more customers that do not have cash but card, access to more revenue from value added services of POS such as bills payment and airtime vending, etc http://www.sludba.com