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Digital Payments Volume Rises As Cash Remains in Mainstream – Report

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Global digital payments volumes will increase by an average 10.9 percent through to 2020, reaching nearly 726 billion transactions, according to the World Payments Report 2017.

The WPR, published by consulting, technology and outsourcing firm Capgemini and BNP Paribas, estimates that volumes generated by emerging economies will grow 19.6 percent by 2020 — three times the rate of mature economies.

Emerging Asia, led by China and India, is projected to grow 30.9 percent in transaction volume.

Global noncash transaction volumes grew 11.2 percent to reach 433.1 billion from 2014 to 2015, the highest growth in a decade.

Developing markets drove this growth with a 21.6 percent increase. Mature markets increased by 6.8 percent, a nominal rise of over 6 percent in 2014.

Mobility, connected homes, entertainment, and media are expected to boost noncash transactions in the future, as will alternate channels, including contactless, wearables and augmented reality.

Despite increased adoption of digital payments, cash remains in the mainstream, especially for low-value transactions.

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E-Financial

NIBSS, PFS Launch National Automated Cheque Clearing System

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Dr. Yele Okeremi, Managing Director of PFS,

Nigeria Inter-Bank Settlement System (NIBSS) and Precise Financial Systems (PFS) have collaborated to unveil a new National Automated Clearing System (NACS), which allows all the Deposit Money Banks in the country to clear cheques within hours.

 

The banks have been test-running the infrastructure for 11 weeks ago and a total of N5 trillion  worth of cheques from 10 million transactions has been processed through the new platform.

 

At the post go-live session in Lagos with representatives of the banks, Mr. Ade Shonubi, managing director of NIBSS, explained that the institution had been on the project for over 18 months. He added that the infrastructure would allow all the banks to achieve several payment and non-payment transactions.

 

NIBSS’ boss said that as at today there are four clearing sessions. According to him, the advantage of having multiple clearing sessions was that the net amount against each bank is smaller so that risks are managed.

 

“With the new system, a cheque can be cleared within six hours, four hour or at whatever duration we agree”, he said.

 

Dr. Yele Okeremi, Managing Director of PFS, the software firm behind NACS, at the session said the process of clearing cheques in all Nigerian banks has been simplified with the launch of NACS and that the successful completion of the project has the door for more Nigerian firms to take on more national challenges.

 

Okeremi commended the collaborative effort that exists between NIBSS and PFS, saying that the partnership has given birth to the new system that “allows bank customers to experience the benefits of shorter cheque clearing cycles, as it reduces operational cost of the banks because the clearing departments of the bank can work smarter and close earlier”.

 

Mr. Kolawole Aminu, Head, Domestic Payments and Collections, Union Bank,  described the new platform as user-friendly.

 

He added that “over N5 trillion that has been processed on the new platform just within 11 weeks. We are talking of over 10 million in terms of the volume of cheques. That tells you how much we do with this mode of payment.”

 

 

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E-Financial

ATM Cash Withdrawal Volume Reach 107 Billion in 2016

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In 2016, the number of cash withdrawals at ATMs worldwide was 107 billion, a 6 percent increase over 2015.

And though the total number of withdrawals is declining in some developed markets, the value of the cash withdrawn is increasing as consumers choose fewer, higher-value transactions, according to Global ATM Market and Forecasts to 2022, a report from the research and consultancy firm RBR.

According to the report, not only are ATM withdrawal volumes and values on the rise in most markets, but also real-time cash deposits.

By the end of 2016, the number of ATMs that could be used to automatically deposit banknotes reached 1.1 million, or 34 percent of the global ATM total, RBR said in a press release.

By connecting additional facilities to the deposit module, deployers often enable customers to settle bills, transfer money, or pay for other goods and services with the deposited cash.

And just as the rise in ATM popularity meant that banks could rationalise their branch networks and redeploy staff to higher-value positions, automated deposit ATMs mean that they can continue to move staff members to other roles, such as sales.

For the customer, these ATMs mean that they can deposit their banknotes at more times of the day and in more locations, for greater convenience.

Recycling ATMs — automated deposit ATMs that also dispense the deposited banknotes — are growing in number. At the end of 2016, more than 670,000 ATMs at the end of 2016 were recyclers, up from 360,000 in 2012, RBR said.

In addition to staff redeployment or rationalisation, these machines also allow banks and independent ATM deployers to reduce their cash-in-transit costs, since fewer CIT visits may be required.

“Banks are improving the functionality of their ATMs so that more transactions can be migrated from the branch counter to self-service, freeing up staff to undertake sales and advisory tasks. Furthermore, they are increasingly rationalizing their branch networks and using ATMs to offer a wide range of services in areas that do not justify the presence of a traditional outlet,” said Rowan Berridge, research leader for the report.

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CBN Licenses Inlaks as Super-agent for Financial Inclusion

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The Central Bank of Nigeria, CBN, has granted an approval-in-principle to Inlaks, a financial technology company, to drive its financial inclusion and the cashless initiative agenda. Inlaks will operate as a super-agent in the nation’s financial services system.

Inlaks, a system integrator in Nigeria and Sub-saharan Africa will work very closely with the CBN and all partners to reach the underserved population as well as the financially excluded.

The aim is to ensure that informal workers in Nigeria have access to affordable financial services through its agent network which will address social challenges in key areas such as health insurance, credit accessibility, savings, wage payments, among others.

To launch the service, Inlaks will leverage the Nigerian Inter-Bank Settlement System, NIBSS, switching infrastructure to enable inter-scheme Cash-In-Cash-Out, CICO, at all its agent locations as approved under the CBN regulatory framework.

The Inlaks’ super-agency platform therefore shall be enabled to communicate with all its agents and shall also have visibility of its agents’ transactions through integration with NIBSS, according the CBN framework.

As stated in the framework, “Super-agents’ in Nigeria shall be responsible for the management and monitoring of the activities of their agents only, and shall not hold electronic money value and would also have information on the volume and value of transactions carried out for each type of service by each agent.”

The framework also states that the volume and value of transactions should be made available to the principal to monitor effective compliance with set limits and establish other prudential measures in each case. Measures such as onsite visits will be carried out to ensure that agents operate strictly within the requirements of the law, guidelines and the contract.

Femi Adeoti, managing director, Inlaks, while commending the CBN for granting it the license also highlighted the fact that the licence would deliver numerous gains to the Nigerian economy by enhancing financial access, financial inclusion, sustainability and growth of the small and medium scale enterprises.

Also as part of its efforts to reach the underserved, Adeoti said Inlaks would partner CBN to deploy a unified information technology platform for about 1000 Microfinance Banks in Nigeria. “The landmark project which is ongoing will be implemented under the auspices of the National Association of Microfinance Banks, NAMB,” he said.

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