PoS transaction failures threaten cashless policy, financial inclusion
On April 8, 20194:12

Growth rate decelerates in Q1’19

Mobile money agents lament
Bankers advise against using PoS

We are addressing the problem — NIBSS

By Babajide Komolafe & Elizabeth Adegbesan

THE widespread and incessant failure of transactions through Point of Sale, PoS, terminals is threatening the cashless policy as well as the financial inclusion efforts of the banking industry.

Consequently, growth rate in value of transactions decelerated in the first quarter of 2019 (Q1’19) due to inadequate capacity on the part of electronic payment operators to cope with rising volume of transactions.

Financial Vanguard analysis of data from the Nigerian Inter-Bank Settlement System, NIBSS, showed that value of PoS transactions grew by 34 percent (as against 66 percent in Q1’18) to N633.8 billion, year-on-year (y/y) in Q1’19.


It also represents 65 percent deceleration in growth rate when compared to the growth rate of 98 percent recorded in Q1’17.

Also following the same trend, volume of PoS transactions grew by 56 percent in Q1’19 to 83.8 million from 53.6 million in Q1’18. But this represents a 45 percent deceleration in growth rate when compared with the 101 percent recorded in Q1’18. It also represents a 56 percent deceleration in growth rate when compared with 127 percent growth recorded in Q1’17.

PoS transaction failures persist

Though NIBSS recently met and agreed on measures to address PoS transactions failure and delay of reversal credit to cardholders account, but Financial Vanguard investigations revealed that the problem has not abated, prompting some bank staff to advise customers to temporarily stop using PoS terminals for transactions.

Data obtained from NIBSS showed that as at Tuesday April 2, PoS transactions failure rose to 20 percent, from 16 percent average for March. This means that one out of every five transactions initiated via PoS terminals across the country was not successful.

NIBSS data also revealed that out of about 948,000 PoS transactions initiated on April 2nd, about 198,000 failed or were unsuccessful.

This is worsened by the fact that most times, the account of cardholders initiating the transaction is debited and the reverse credit is usually not executed within 24 hours as expected.

Threat to Cashless policy and financial inclusion

The enormity of the problem and how it may undermine the cashless policy as well as the financial inclusion efforts of the banking industry are reflected in the experience of some agents of banks and mobile money who spoke to Financial Vanguard.

“The good thing about the PoS is that it makes people have access to their fund through their ATM card. The bad experience I had using PoS is the network problem coming from Interswitch,” said Salami Olarenwaju, Samsoft Global Concept Limited, a bank and mobile agent.

Failure in transaction

Continuing he said: “The relationship between Interswitch and the power bank of the PoS is not smooth. Then peradventure, when a customer is debited through PoS without pay, the time frame for the reversal of such fund is longer which makes most of the customers to stop using the PoS because by the time there is failure in transaction and they expect a reversal in 24 hours which they didn’t get, they get frustrated.

“Another issue is with interrupted withdrawals. This is a situation where the customer account is debited without completion of transaction, we ask the customer to go to their bank to fill an error form. The duration of the reversal takes a long time because of the processes involved to solve the problem.

“When I carry out a PoS transfer, the fund is supposed to drop to the recipient bank account but because of the network issue, the fund will neither go to the recipient nor come back to my account from where the money is transferred. On such occasion, as an agent I would need to follow up with my bank for a fund reversal.”

Also narrating his experience with customers, Kosoko Sheu Tijani, of TK Investment, a mobile money and bank agent, said: The PoS has solved the issue of people standing in queues from the bank to get their money and save their money but despite its usefulness I have had problems with the network. It sometimes fails during transactions which causes a lot of inconveniences to the customers and myself. The worst part of it all is when the network goes off completely the transaction is not successful and the customer is debited. That is the most annoying situation in this PoS business.

“The reversal of their debited fund is now the real issue because according to the issuers of the PoS, they won’t be held responsible for any declined transaction. When customers get debited when a transaction is declined, they expect to get fund because they had already gotten the debit alert. There is 50 percent certainty that the money would be reversed immediately or within the next 24 hours but there is much certainty that after the declined transaction and debiting, the money would be reversed into their account later.

“So while processing the reversal at the bank, what I have been noticing is that the bankers or let say the customer care officer at the bank have been telling the customers to stop using PoS because they are getting debited and they find it difficult for them to process their reversal to get the money back into their account and they make it look as if it is the agents that are trying to manipulate or take their fund away from their bank account. This situation has really been the fault of this business.”

Inadequate capacity

Financial Vanguard investigations revealed that the root cause of the above challenge is inadequate capacity on the part of electronic payment operators in the PoS ecosystem to cope with rising volume of transactions.

Some bank staff who spoke to Financial Vanguard on condition of anonymity, however, pointed accusing fingers to Interswitch, operators the Verve card scheme, which accounts for about half of electronic payment transactions in the country. They alleged that the PoS transaction failure is frequent with the Verve cards.

“Interswitch is the one doing these things to us. There is no issue with our system. It is Interswitch system that is responsible,” a branch manager of a Tier 1 bank told Financial Vanguard on condition of anonymity.

Interswitch, however, declined to respond to these allegations when contacted by Financial Vanguard.

Financial Vanguard investigations as well as data from NIBSS, however, indicate that banks and card holders were responsible for about nine out of 10 PoS transaction failures in March. NIBSS data for March 29, 2019, showed that five out of ten (51 percent) PoS transactions failure were caused by cardholders while banks caused four out of ten (42 percent) of the failures.

According to an industry source, who spoke on condition of anonymity, some banks are not making the investment to upgrade their capacity and this is what is affecting the system. He said given the interdependent nature of the PoS ecosystem, all the operators should be upgrading their capacity simultaneously as failure on the part of just one operator to do this will affect the whole system. He added that the reason why some operators are foot dragging in terms of capacity upgrade is because there is no sanction for not doing so, and hence the problem may persist for a while.

NIBSS reacts

However, Acting Managing Director/Chief Executive, NIBSS, Mr. Niyi Ajao, told Financial Vanguard that stakeholders are making efforts to address the challenge and the efforts are yielding good results.

He said: “PoS failure rate has always been in double digits because of the complexity of the PoS network. In the best of times we record 12 percent failure rate, with six out of this 12 being caused by insufficient funds (in cardholders’ account). The PoS problem has abated in the last two weeks, as all stakeholders have been working together to improve performance and the effort is yielding good results as can be seen in the NIBSS real-time monitoring dashboard available to the public on NIBSS web site”.

https://www.vanguardngr.com/2019/04/pos-transaction-failures-threaten-cashless-policy-financial-inclusion/

ok

and the funniest thing is it will show fail and you would be forced to pay with cash and when you get home your money will be deducted...
so annoying



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to see result

Nigerian demon ti takeover
What works effortlessly in other clime struggles to stir in Nigeria

Ok

Declined!

What about Unified Payments?

Exactly, so I went to maitama stores which is on my street and they have 3 POS machines. Guess what? All three failed to work, after some minutes I asked the guy to try the third again and it worked.

Nigeria is not in the right place for this so called cashless society agenda, I'm sorry.

Nigeria is ripe yet.

if it doesn't work... your money has already bn deducted and you have to wait for reversal which takes days sometimes and sometimes if it works your money gets deducted twice

they had better work on it

Ordinary pos transactions, they can't get it right but will never fail to post their voluminous profits.

slapandfall:
What about Unified Payments?

oga they all route thru NIBSS. wen NIBSS is down everything is down and lately NIBSS has been a pain in the ass. always going down. interswitch has follow them also. 80% of ATM cards are powered by interswitch. USSD method is d best but coralpay is not doing enough with the advert.

They shud fix the system.

My own experience is horrible, from 26 till Diz very moment 65 k was deducted from my account for a failed transaction and I never see the revert alert, and the bank keeps telling me to wait another one week, am broke as hell but I don't have a fucking choice bcoz we dey naija

Pos that made me lose 10000

Rubbish

dailynaijanews:
Polaris bank has refused to refund my 40,300 since December 2018

u no go their bank go complain

That thing can be so annoying ehn.. Being debited after a failed transaction. And the most annoying thing is having to wait for weeks to get your money back.







GIVE YOUR SKIN A TREAT, CHECK MY SIGNATURE!

God bless you

First bank has refused to give me back my 18,000. Hell will loose it’s hold the next time I’ll be in the Bank

That's how I lost my 5k to Rainoil .....

Gentle034:
My own experience is horrible, from 26 till Diz very moment 65 k was deducted from my account for a failed transaction and I never see the revert alert, and the bank keeps telling me to wait another one week, am broke as hell but I don't have a fucking choice bcoz we dey naija

Oliver80:
First bank has refused to give me back my 18,000. Hell will loose it’s hold the next time I’ll be in the Bank

qualityGod:
Pos that made me lose 10000

Rubbish

Go to twitter, write a letter to CBN and hashtag your bank... You will get a response fast and you money will be reversed ASAP.

A lady got her money back in 10 minutes after writing CBN on twitter and tagging her bank. The already told her to wait for 2 weeks


Trust me, the fear of CBN is the beginning of wisdom for all Nigerian Banks

dailynaijanews:
Polaris bank has refused to refund my 40,300 since December 2018

do you know cbn will pay you extra 10k plus your money after they have dealt with Polaris....just send a complaint mail to Cbn..copy Polaris bank....


I can send you their mail address too


oshi banks

Not just pos , mobile app too.

Oliver80:
First bank has refused to give me back my 18,000. Hell will loose it’s hold the next time I’ll be in the Bank

and you never copy them for mail send complaint give cbn make you even hold extra 10k for your troubles

The this a serious issue I must say. I still have my 12K hanging with Gtbank, they said i should wait for 8 Working days for they to confirm from the receiving bank.

Two weeks ago it was zenith bank.

dailynaijanews:
Polaris bank has refused to refund my 40,300 since December 2018

write again ,this time around copy cbn.

mysticgal:


and you never copy them for mail send complaint give cbn make you even hold extra 10k for your troubles

Av u ever seen anybody DAT collected d 10k before?




It was boldly written in d circular as penalty for a failed transaction not solve within speculated time. ........in my own interpretation it will serve as as fine for bank to pay into CBN cover.......not a compensation to customer.

+ Remember, THIS IS NIGERIA

Threatening them with CBN works though....

They are always scared when you threaten to report them to cbn. Try amd see they will refund it asap

Humblega:




Av u ever seen anybody DAT collected d 10k before?




It was boldly written in d circular as penalty for a failed transaction not solve within speculated time. ........in my own interpretation it will serve as as fine for bank to pay into CBN cover.......not a compensation to customer.

+ Remember, THIS IS NIGERIA

Threatening them with CBN works though....

I didn't collect but my 18k was returned with a sorry