The truth is that we all cry about high rate of inflatio[/b]n and high case of [b]money laundering.

How can this policy reduce inflation and money laundering? Are money laundered in cash or electronically?

Kobojunkie:

The poor people don't have to conduct more than 150,000/1 million in transactions per day with banks -- they can however conduct in their numbers 150,000/1 million in transactions with sole proprietors/small businesses and corporate entities.

Imagine the store owner at the corner store whose customers are only able to pay in cash since cash is what they have -- at the end of the day the store owner counts his till and finds he has made over Naira 250,000(this is actually his sales average per day) what does he do with this money? Deposit it in the bank, right(lets assume that)? Well, this policy says he cannot do that without penalty, every night. Do you get it now?

@Kobojunkie Your skepticism is understandable; but there are huge benefits to ebanking. Sadly, CBN are not telling us the benefits but try to force it down our throats. I believe CBN should leave this to market forces to determine if ebanking will be a popular choice of payment. Let the Banks take the risk. But in typical Naija style, Govt legislate things and create all sorts of headache.

Businesses (even the little stores) will embrace epayments once they know the benefits. My fear is that Nigerian banks will only try to profit and make life difficult for everyone

Read about the Kenyan experience with Mobile payments and you may get a sense of the benefits

Carrying N100,000 (or more) can be a huge headache as well, but epayment provides an option.

Kobojunkie:

The poor people don't have to conduct more than 150,000/1 million in transactions per day with banks -- they can however conduct in their numbers 150,000/1 million in transactions with sole proprietors/small businesses and corporate entities.

Imagine the store owner at the corner store whose customers are only able to pay in cash since cash is what they have -- at the end of the day the store owner counts his till and finds he has made over Naira 250,000(this is actually his sales average per day) what does he do with this money? Deposit it in the bank, right(lets assume that)? Well, this policy says he cannot do that without penalty, every night. Do you get it now?

I get your point but i still believe CBN is making the right decision by forcing this policy.  The benefits of e-payments far outweigh the risk of being robbed of daily earnings especially since carrying 250K in Nigeria is not as convenient as tucking a credit in your front pocket.  

My only qualm is forcing vendors to adopt an innovation that requires electricity/web/hardware etc is not conducive at the moment.

my mother is a caterer and pays about 170k for a cow every other week, she also spends about 300k on other things, (goat meat, tomatoes, peppers, banga, other food items) can you imagine how much she will have to pay in penalties a month this is ridiculous. Until our infrastructure is ready for ebanking we shouldnt force it on people. Which market woman accepts VISA or mastercard? Our Pos systems rely on wireless technology, so when the weather is bad or if nepa takes light you will not be able to make purchases, how does that make sense?

;d

I got transferred to work in katsina. I went to the Skye bank branch in katsina to request for my transaction alerts to be sent to a new email address. I was told that I had to write a letter which they will scan and forward to my branch and then wait for my branch not only to reply but also effect the change.
All our banks claim to be computerised and I still have to write a letter before I can change my email address in their database. By the way, the change hasn't been effected 6 months later.
How are banks supposed to be able to handle the complexity of such a venture when to change my email in their database is still manual?

You can force a horse to a river but can't force it to drink. As an economist, I believe in the invisible hands that push demand and supply.

occam:

@Kobojunkie Your skepticism is understandable; but there are huge benefits to ebanking. Sadly, CBN are not telling us the benefits but try to force it down our throats. I believe CBN should leave this to market forces to determine if ebanking will be a popular choice of payment. Let the Banks take the risk. But in typical Naija style, Govt legislate things and create all sorts of headache.

I am not at all skeptical -- I mean this is a country that implements draconian policies that shackle people, and what people do is simply live with it without as much as a NO WAY HOSE -- Why else do you think Fela sang "Suffering and Smiling" for?

And yes, CBN is not telling people the exact reasons for this Shackling(IMO) policy, and that to me makes it even harder for me to make sense of.

occam:

Businesses (even the little stores) will embrace epayments once they know the benefits. My fear is that Nigerian banks will only try to profit and make life difficult for everyone
Read about the Kenyan experience with Mobile payments and you may get a sense of the benefits
Carrying N100,000 (or more) can be a huge headache as well, but epayment provides an option.

What benefits though? If 99% of your customers pay cash, what huge benefit do you gain from embracing epayments though? If the owner of the corner autoparts store has 99% customers who pay cash, what will installing electronic payment do for this store owner? Really?

Mobile Payments even in Kenya is still not used by a high percentage of the populace. We copy success stories without considering what fraction of the populace really use these things. Also you need to ask if Kenya had to go as far as instituting penalties against those who could not afford these upgrades? I mean come on!! Someone on another thread tried to suggest Japan as reason why it will benefit Nigeria. Is Nigeria Japan? Does Kenya share the same unique situations we have in Nigeria? Why Kenya? Why not US?

Laudable! but they need to look at the cultural issues deeply

Change will come. But sometimes, we must lead change where we want it to go.

On its face, this is an excellent policy. And as with all things human, there will be hiccups and teething problems.

All the rural folk will learn, as they have with the ATM cards, how to manage life without a Ghana Must Go bag. Robbery incidence will reduce, more difficult will be money laundering, and bla bla bla,

All those planning to bury money in their homes, good luck to you.

Initially, it will be difficult, very. but as time goes on, it should get easier. And if it proves too difficult to implement, there's alays the status quo to be returned to. Doesnt mean we cant try.

So, all things being equal, on the balance, this is an excellent policy & for what its worth, it has my support.

The infrastructures needed to make this type of policy work do not exist! It will only cause unnecessary pain for the populace! Perhaps, the CBN has plans to give us uninterrupted power supply, 70% nationwide internet/phone network coverage, Adequate consumer protection and education about their rights when the Banks mess up! The uneducated will suffer the most!

Kobojunkie:

I am not at all skeptical -- I mean this is a country that implements draconian policies that shackle people, and what people do is simply live with it without as much as a NO WAY HOSE -- Why else do you think Fela sang "Suffering and Smiling" for?

And yes, CBN is not telling people the exact reasons for this Shackling(IMO) policy, and that to me makes it even harder for me to make sense of.
What benefits though? If 99% of your customers pay cash, what huge benefit do you gain from embracing epayments though? If the owner of the corner autoparts store has 99% customers who pay cash, what will installing electronic payment do for this store owner? Really?

Mobile Payments even in Kenya is still not used by a high percentage of the populace. We copy success stories without considering what fraction of the populace really use these things. Also you need to ask if Kenya had to go as far as instituting penalties against those who could not afford these upgrades? I mean come on!! Someone on another thread tried to suggest Japan as reason why it will benefit Nigeria. Is Nigeria Japan? Does Kenya share the same unique situations we have in Nigeria? Why Kenya? Why not US?

The CBN approach sucks; but epayments should be still be encouraged. You need to understand how epayments can drive business growth before making your assertions (in bold). Businesses will quickly adapt once the benefits are clear.

Not sure why you think usage rate is low in Kenya when reports state the contrary. click & read these reports:

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:22551641~pagePK:146736~piPK:146830~theSitePK:258644,00.html

http://mobilepaymentmagazine.com/m-pesa-kenya-savings-transfe

We don't have to copy Kenya, but study and figure out the challenges and opportunities there. With nearly 70 million mobile phone subscribers in there is huge potential for Mobile payments to flourish. CBN should just stay away and let the Banks/Telecoms take the risk.

occam:

The CBN approach sucks; but epayments should be still be encouraged. You need to understand how epayments can drive business growth before making your assertions (in bold). Businesses will quickly adapt once the benefits are clear.

Currently there is NOTHING that stops banks from promoting EPayment methods --- as far as I am concerned, they need to step up and offer if IF and ONLY IF they feel the service is something they would like for their customers. Or is that not how it ought to happen?

You don't need to get me to understand EPayments -- I live in a country where I enjoy the benefit of EPayment when I WANT TO -- NOT BECAUSE I HAVE TO. So I should be the one telling you of the benefits of EPayment. You, on the otherhand, need to understand the ISSUES that stand in the way of EPayment in the way you envision it in helping Nigeria today. There is nothing wrong with EPayment -- the difference is like owning a cell phone over a landline. It offers convenience and the sorts BUT if yoiu do not have infrastructure and a system able to handle the potential issues that come with it, your cell phone might as well be a brick or paperweight to you.

occam:

Not sure why you think usage rate is low in Kenya when reports state the contrary. click & read these reports:

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:22551641~pagePK:146736~piPK:146830~theSitePK:258644,00.html

http://mobilepaymentmagazine.com/m-pesa-kenya-savings-transfe

So, because about 25% of the people in Kenya use EPayment means it is a solution for Nigeria-- it is a solution to be forced on over 70% of Nigerians , why? Why? Why ? Seriously, Why?

occam:

We don't have to copy Kenya, but study and figure out the challenges and opportunities there. With nearly 70 million mobile phone subscribers in there is huge potential for Mobile payments to flourish. CBN should just stay away and let the Banks/Telecoms take the risk.

What you describe above ought not to be the CBN's Job -- what do we have creative business minds out there for? If they decide to take advantage of the 70 million mobile subscribers number, the sure . . . businesses can. But the CBN should not be in the business of creating situations that essentially FORCE people to subscribe to services without much else of a choice. It is NOT RIGHT POLICY !

Kobojunkie:

Currently there is NOTHING that stops banks from promoting EPayment methods --- as far as I am concerned, they need to step up and offer if IF and ONLY IF they feel the service is something they would like for their customers. Or is that not how it ought to happen?

You don't need to get me to understand EPayments -- I live in a country where I enjoy the benefit of EPayment when I WANT TO -- NOT BECAUSE I HAVE TO. So I should be the one telling you of the benefits of EPayment. You, on the otherhand, need to understand the ISSUES that stand in the way of EPayment in the way you envision it in helping Nigeria today. There is nothing wrong with EPayment -- the difference is like owning a cell phone over a landline. It offers convenience and the sorts BUT if yoiu do not have infrastructure and a system able to handle the potential issues that come with it, your cell phone might as well be a brick or paperweight to you.


So, because about 25% of the people in Kenya use EPayment means it is a solution for Nigeria-- it is a solution to be forced on over 70% of Nigerians , why? Why? Why ? Seriously, Why?

What you describe above ought not to be the CBN's Job -- what do we have creative business minds out there for? If they decide to take advantage of the 70 million mobile subscribers number, the sure . . . businesses can. But the CBN should not be in the business of creating situations that essentially FORCE people to subscribe to services without much else of a choice. It is NOT RIGHT POLICY !

No roads, no electricity yada yada yada, yes we know this, but doesn't mean businesses have to be risk-averse. We heard the same "no infrastructure song" when the Mobile telcoms came 10 yrs ago. And today? MTN made $2.5 billion profit last year.

guess we have different perspectives of Nigeria. you see infrastructural challenges; I see growth opportunities for businesses

BTW - 40% of adult pop in Kenya use Mobile payments. you don't expect kids to be added. don't try to distort the facts by saying 25% of the entire pop.
I

occam:

No roads, no electricity yada yada yada, yes we know this, but doesn't mean businesses have to be risk-averse. We heard the same "no infrastructure song" when the Mobile telcoms came 10 yrs ago. And today? MTN made $2.5 billion profit last year.

What has roads and electricity to do with this? What has roads and electricity to do with what I have said so far on this? So when it comes to infrastructure to handle issues that come with electronic payments, you think roads, electricity??

occam:

guess we have different perspectives of Nigeria. you see infrastructural challenges; I see growth opportunities for businesses

BTW - 40% of adult pop in Kenya use Mobile payments. you don't expect kids to be added. don't try to distort the facts by saying 25% of the entire pop.
I

Riddle me this . . . you continue to spew forth the claim of Kenyans using Mobile Payment , Now here is for you you. Did the Kenyan [b]Central Bank [/b]IMPOSE this on Kenyans? Make sure you SPEND TIME THINKING this one through before you post a response as I am close to accepting you are just singing this without even understanding what really went into making it work there. Was this move a PRIVATE move or a Central Bank move in Kenya? NOTE: I have been reading up on this since you mentioned it earlier . , only I wonder if you even spent time making sure you understand the difference between the kenyan situation and the Nigerian here.

as much as not everyone can withdraw 150thousand per day the policy sucks i say

This will lead to deficit financing among business men.

There are a couple of things we all need to understand

[size=14pt]1. The policy will reduce corruption and crime
2. Transfers above the limits can still be done through clearing (issuance of crossed cheques, or transfers via NEFT within the banks' branches for those who feel uncomfortable moving their monies electronically)[/size]

I really dont see why anyone should kick against it as all high volume money transactions will leave a trail for audit

Brilliant, brilliant move by this brilliant brilliant man called Sanusi.

The next thing is to ensure any electronic transfer fees/charges is monitored with eagle eyes.

tEsLim:

Well they should make sure Iya Alamala and Iya oni bolly have POS machines. THe banks should give this things out for free and charge little transaction fees. Else the policy is just still another sutpid thing. I should be able to walk to any Igbo man store and make purchases by just swiping

Why would you need over 150K, even over 10K for Iya Alamala or Iya Oni bolly?

I think its a good move to check fraud, etc

Why should Nigeria attempt to run when it's just learning to crawl? CBN should look into the service delivery of most banks which is very appalling to say the least.

4. This arrangement shall be in force in Lagos state, F.C.T., Port Harcourt, Kano and Aba in the first instance. The arrangement shall be extended to other parts of the country at a date to be determined by the Bankers Committee.

So, because about 25% of the people in Kenya use EPayment means it is a solution for Nigeria-- it is a solution to be forced on over 70% of Nigerians , why? Why? Why ? Seriously, Why?

I don't think the population in those five places equal 70% of Nigerians, and i think LAgos, FCT, PHC, Kano have the infrastructure to make this work cant say much about Aba though,

No matter how difficult change is, we have to start from somewhere even if it means forcing it down our throats, it definately will not be succesful immediately and there will be hitches, but we all know that we need moves like this to ginger Nigerians, else we will keep doing the same thing for the next 10years and keep saying we dont have the infrastructure,

The infrastructures needed to make this type of policy work do not exist! It will only cause unnecessary pain for the populace! Perhaps, the CBN has plans to give us uninterrupted power supply, 70% nationwide internet/phone network coverage, Adequate consumer protection and education about their rights when the Banks mess up! The uneducated will suffer the most!

Its not CBN that will provide other infrastructure, other sectors -especially the private will wake up and key into opportunities provided by this, trust Nigerians and thier Fire brigade approach, I think its a good move,

lovejo:

i think uneducated business man will not release his goods to me except he can confirm his money, this will cause many crisis between literate and illiterate.

How many uneducated business men would you be spending N150K on a day?

You just want to complain to show you are knowledgeable not?

lovejo:

No infrastructure to implement this, electricity, wifi , and good intention, why selected states in the south, it should be balance between the geo political zone.

More ranting complaints.

Why does it have to be geo-political? You think everything should be quota system in Nigeria or based on sense?

Let the proper infrastructure be put in place before this is implemented. Lack of power supply and poor internet connectivity will make rubbish the policy

occam:

5. To achieve interoperability of local currency POS transactions, no card scheme, foreign or local, shall operate exclusive acquirer agreement or contract in Nigeria with effect from June 1, 2011. Any payments scheme, processor, switching company, service provider or bank that contravenes this policy may be suspended for a minimum of one (1) month by the CBN as a processor, switching company, service provider etc in the first instance. The license may be withdrawn by the CBN if the contravention is repeated.

Can someone please explain what this means in plain language

Here you go:

"To achieve interoperability of local currency POS transactions, no card scheme, foreign or local, shall operate exclusive acquirer agreement or contract in Nigeria with effect from June 1, 2011."

Basically, this says that to ensure the successful operation of local currency-programmed Point-of-sale (POS) machines (i.e. the machines that we swipe/insert cards into that is operating on Naira, not dollars or pounds), no cards issued to bank customers shall restrict/penalise the usage of a card, be it locally or foreign issued to the customer, from/for using any POS when making payment. Basically, they can not charge you extra or stop you using a card because e.g. GTB has a special agreement with Visa to get its customers using Visa instead of Mastercard or others. All POS should be neutral to card type.

"Any payments scheme, processor, switching company, service provider or bank that contravenes this policy may be suspended for a minimum of one (1) month by the CBN as a processor, switching company, service provider etc in the first instance. The license may be withdrawn by the CBN if the contravention is repeated."

I think this is clear and self-explanatory. I assume only the former was what you did not understand.

Cheers

Let the proper infrastructure be put in place before this is implemented. Lack of power supply and poor internet connectivity will make rubbish the policy

Sagamite:

How many uneducated business men would you be spending N150K on a day?

You just want to complain to show you are knowledgeable not?

More ranting complaints.

Why does it have to be geo-political? You think everything should be quota system in Nigeria or based on sense?

You'll be surprised that those market women move funds in millions daily.

This is brilliant idea in a wrong economic system. I know some people that have cancelled their bank cards cos fraudulent activities on their accounts, now you want to introduce drastic epayment system?

For this to work, we need constant power supply, good network infrastructure and internet backbone,aggressive education/awareness programmes, clearcut processes and policies of interbank settlements, information security systems and control. Can we provide all these?

Don Diara:

Let us all note that, this policy does not stop the lawmakers from looting our money to another country and it does not stop them from bribing each other with huge amount of money. So what is the essence of the policy @enyojo, @seun and others that support the policy, is it to frustrate innocent business men and women ? ?

Utter illiteracy!

denzel2009:

You'll be surprised that those market women move funds in millions daily.

This is brilliant idea in a wrong economic system. I know some people that have cancelled their bank cards cos fraudulent activities on their accounts, now you want to introduce drastic epayment system?

For this to work, we need constant power supply, good network infrastructure and internet backbone,aggressive education/awareness programmes, clearcut processes and policies of interbank settlements, information security systems and control. Can we provide all these?

That is pure fallacy, denzel.

Hardly will many market woman be moving millions per day in trade. Are we suppose not to progress because of an extreme few?

Any of the extreme few that does can (a) start e-transactions or (b) have multiple accounts and divide takens into them (c) if a and b does not appeal to them, pay the 10% fine of the top-up.

The other things you listed will be a challenge but let is be so clear that very few people spend over N150K a day. That is effing £600!!! Even the UK, my bank card will not allow me take over £500 per day and there is no way I am spending that much in one day (as I don't date money-hungry, pay-my-bills girls).

Kobojunkie:

Imagine the store owner at the corner store whose customers are only able to pay in cash since cash is what they have -- at the end of the day the store owner counts his till and finds he has made over Naira 250,000(this is actually his sales average per day) what does he do with this money? Deposit it in the bank, right(lets assume that)? Well, this policy says he cannot do that without penalty, every night. Do you get it now?

What part of businesses can transact up to a million a day don't you understand?

ose_o:

my mother is a caterer and pays about 170k for a cow every other week, she also spends about 300k on other things, (goat meat, tomatoes, peppers, banga, other food items) can you imagine how much she will have to pay in penalties a month this is ridiculous. Until our infrastructure is ready for ebanking we shouldnt force it on people. Which market woman accepts VISA or mastercard? Our Pos systems rely on wireless technology, so when the weather is bad or if nepa takes light you will not be able to make purchases, how does that make sense?

Your mother should have a corporate account for her catering business. With that she can withdraw a million a day if she wishes.

Mix that with another 150 a day from her personal account that she can withdraw, what is her problem then?

[/quote]How many uneducated business men would you be spending N150K on a day?

What are you saying? That very few uneducated business men spend N150k  on daily basis? You might have to go back and do a better survey.

No infrastructure to implement this, electricity, wifi , and good intention, why selected states in the south, it should be balance between the geo political zone.

More ranting complaints.[quote]

Bros, you don't need to get angered because you don't agree with peoples opinion.
Try and understand. This is a very good idea and should help in so many ways but its just like raising a building with a bad foundation.
There had been times you get to an ATM and the message you get is; 'USER OR ISSUER NOT AVAILABLE'  Nothing you can do about it, obviously, your bank network is down.
Imagine being away somewhere, made your shopping and ready to pay at the counter,  SORRY, SOME FORM OF LOSS OF COMMUNICATION, as a result of power failure, network link bla bla bla.
you need to make a transfer or payment from home or book a flight, sorry your internet just failed you or is it the service provider.
Things should be put in place to make a success, the implementation.

ogbori:

Bros, you don't need to get angered because you don't agree with peoples opinion.
Try and understand. This is a very good idea and should help in so many ways but its just like raising a building with a bad foundation.
There had been times you get to an ATM and the message you get is; 'USER OR ISSUER NOT AVAILABLE'  Nothing you can do about it, obviously, your bank network is down.
Imagine being away somewhere, made your shopping and ready to pay at the counter,  SORRY, SOME FORM OF LOSS OF COMMUNICATION, as a result of power failure, network link bla bla bla.
you need to make a transfer or payment from home or book a flight, sorry your internet just failed you or is it the service provider.
Things should be put in place to make a success, the implementation.

Mate, you can still conveniently make most daily transactions as they are all under N150K a day.

150K transactions are big ticket transactions that will not be the norm. The few cases of "Your bank network is down" once in a while is not enough excuse to extinguish the benefits.

If worst comes to worst, most big ticket transactions (over N150K) are purchase decisions made well in advance, based on planning by the purchaser, the purchaser can take N150K on Mon, another on Tues, another on Wed etc until he gets the sum he wants if he really wants to remain bush at all cost.

Sagamite:


That is pure fallacy, denzel.

Hardly will many market woman be moving millions per day in trade. Are we suppose not to progress because of an extreme few?

Any of the extreme few that does can (a) start e-transactions or (b) have multiple accounts and divide takens into them (c) if a and b does not appeal to them, pay the 10% fine of the top-up.

The other things you listed will be a challenge but let is be so clear that very few people spend over N150K a day. That is effing £600!!! Even the UK, my bank card will not allow me take over £500 per day and there is no way I am spending that much in one day (as I don't date money-hungry, pay-my-bills girls).

Sagamite, I worked in a bank as a Teller few years ago and my branch was very close to tejuosho/yaba market. These small traders bank their daily sales and they are often more than 150k a day. If you see what they sell like shampoo, relaxer, shirley, dermovate, figire(bendown boutique) and so on, you won't be able to reconcile it.

The thing is, they don't keep the money in the accounts for too long. So, I know what I'm talking about.

If you are talking about the average roadside traders, those ones don't even have accounts, they keep their money with baba alajo(daily contribution collectors).

Well, you need to be here to appreciate the way things works for now.

While all these seem like excuses, you should be reminded that the system is not there yet and has to be taken slowly and cautiously.
Someone mentioned a case of a local restaurant, where the owner need to get a cow on daily basis. Wish aboki you wan do on-line transact with, nanana.
there are series of business that would take longer time to integrate, and some much longer. I need to buy raw materials from villages weekly, you suggest i withdraw 5ties and keep at home, E NO GO WORK . . ./

Once again Sanusi's First Class degree has becoming an embarrassment, Too Much theory and no common sense. A country That cannot boast of 1 day Uninterruptible Power supply has no business delving into electonic payment or electronic transactions of any Kind. First Fix the Light, then lets Talk.