Revealed!: NCS, Why e-Payment is not Working

The take off of Nigeria Central Switch (NCS), a key national payments infrastructure hub would have to wait a little longer until fine details including a set of rule of engagement, policy and legal framework are put in place, Nigeria CommunicationsWeek can now reveal.
Nigeria has made only limited progress in the e-payment as payment networks have continued to increase without integration, just as channels of payments offered by each payment scheme is closed to tokens issued by other schemes
Nigeria CommunicationsWeek gathered that the country’s e-payment system including the federal government’s massive adoption of e-payment for all transactions by all ministries and agencies has operated in fits and starts because of the absence of a Central Switch.
To get the Central Switch to work, the Nigeria payment ecosystem comprising banks, clearing houses, switches, and so on must be audited.
Laws; Central Bank of Nigeria Act, money laundering laws, evidence laws and rules and guidelines governing clearing houses and e-banking as well as ICT networks which interconnects all must also be reviewed.
Nigeria Central Switch is to provide interconnectivity and interoperability between electronic funds transfer (EFT) switches and can be used for switching transactions between other third party processors in the country as well as serve as the national gateway for payments services.
It will create a more efficient national payment infrastructure by electronically switching retail payment transactions between commercial banks.
The firm was established by the Nigerian Bankers Committee, and to be operated by Nigerian Inter-Bank Settlement System (NIBSS) to also possibly answer Nigeria’s need for central databank for population, crime control and many more.
Nigeria CommunicationsWeek gathered that a combination of factors have been responsible for the delay in the take off of the Central Switch.
Primarily, as the Nigerian payment systems has been evolving rapidly with arrays of payments products by banks and non-banks alike, the legislature which will provide directions has not kept pace with development in the e-payment space.
The effect is that there is no set of rules and Interoperability framework, which a set of norms, standards, and references which describe an accomplished or desired agreement of interested parties on ways of interconnectivity.
Without Interoperability there will be no handshake across various switching platforms and bulk payments, salaries and dividends will continue to be delayed.
Nigeria CommunicationsWeek investigations reveal that aside the rule of engagement, there is no legal framework, the legal teeth that will give to the emergence of a regulatory commission to oversee the e-payment industry and operations of the Central Switch in particular.
The legal framework will also address fraud related issues and punishments to be melted out to defaulting companies since the switch has the capability to record frauds on switching networks.
Already, there has been growing concerns over the difficulty in interconnectivity among switching platforms, a situation blamed on absence of standardized technology in the system.
The Nigeria Central Switch is currently implementing ACI Worldwide’s Base24-es platform to drive for transferring payments messages around the country.