Connectivity Problem Tops Challenges of PoS Usuage

Telecommunications network connectivity difficulties account for 58.5% of challenges merchants face in Point of Sale (PoS) transactions according to a field market research sponsored by Nigeria Inter-Bank Settlement System (NIBSS).


Samuel Oluyemi, head, Business Development, NIBBS, who disclosed this at this year’s Card Expo going on in Lagos, said that the field market research main goal is to provide to NIBSS, as Payments Terminal Service Aggregator for the industry (PTSA), a clear guidance on the improvement areas for NIBSS services, as well as to support other stakeholder in the Nigerian Payment System, how to achieve increased volumes of transactions on PoS Terminals in Nigeria.


Other challenges include transactions charges 47.2%, customer insistence to pay in cash 31.3%, transactions often rejected account for 29.1%, card reading difficulties 27.4% and customers’ do not have cards 26.5%.


He noted that the market research was conducted by Financial Derivatives Company Limited in October, 2012 and covered four different areas of Lagos namely, Lagos, Yaba, Ikeja and Badagry.


The Company administered a total of 6,776 questionnaires 3,562 to merchants with PoS, 1,627 to merchants without PoS and 1,587 to consumers.


“Although there is increasing effort to deploy PoS to Lagos’ merchants, it is not fully accepted as 26.8% of merchants still do not accept PoS payments.


The research further revealed that 40% of the merchants that still does not accept payments with card using the PoS are merchants that typically have facilities above the common standard in Nigeria, e.g. restaurants and hospitals.


Furthermore, from these merchants 21%, irrespective of their activity, are located in shopping malls which also provide better infrastructures than usual.


Additionally, almost all these merchants are accepting payments in cash which is 98%, while the cheques are the second most accepted mean of payment representing 36%.


The report also revealed reasons why merchants still not having a PoS, these include, fear of default/fraud, easy access to cash, Bank refusal to deploy terminal among others.


He added that, there are some technical difficulties to solve but also the preference of cash and the lack of confidence in PoS network, as well as price sensitivity are still major constraints to PoS adoption.


The report concluded that, “nonetheless, the consumers understand the PoS and its value, as more than 70% already would recommend its usage as a mean of payment to other people”.


It would be recalled that CBN had issued guideline on PoS card acceptance services aimed at increasing transactions through the device.


According to the guideline, acquirers were mandated to handover to CBN licensed Payments Terminal Service Providers (PTSP) among who are Unified payments Plc, Paymaster, Etop Nigeria, Easyfuel and Citiserve before November 1, 2011.


The process of deploying a point of sale terminal requires the PTSPs to first register such terminal with Payments Terminal Service Aggregator for the industry which is Nigeria Inter-Bank Settlement System (NIBSS) before such terminal will be deployed.


The essence of registration of terminal before deployment in the present arrangement is to ensure that the terminal commences transaction immediately it is deployed.