Cash-less Policy: Interbank processing to exceed N2.4tr —Interswitch

Posted by Mgbenka at Wednesday, March 28, 2012 |

Transaction processing for banks and other financial services is set  to surpass US$15 billion (2.4 trillion) this year as the Central Bank  of Nigeria (CBN) intensifies the
implementation of the cash-less policy.

The policy is aimed at reducing the quantity of physical cash in  circulation in Nigeria.
Mr Mitchell Elegbe, Managing Director/CEO, Interswitch, the  transaction and switching firm that handles front-end-processors of  all banks in Nigeria , most Point of Sale (PoS) and automated teller  machines (ATMs) including debit and credit cards interbank  transactions, said the full implementation of the cash-less policy at  the end of March would grow the electronic payment landscape.

Despite about 18 to 20 million cards of various makes from  debit, credit, e-purse and loyalty schemes in circulation which allows  consumers and enterprises to pay and collect bills and taxes via many  channels such as ATMs, banks, PoS, online, etc, Nigeria, he said, still  lagged behind many nations in bank accounts, ATM and PoS deployments.
Presently, commercial banks are working to raise the level of inter  bank processing and transactions volumes to over 1100 million before  the end of 2012 as this would  make more Nigerians use electronic  modes of payment for their transactions including payment of utility  bills, tax, and banking payments.

The Central Bank of Nigeria (CBN) said cash transactions represented  over 99 per cent of customers activities in banks. Statistics from  World Bank, MobileActive, Nielsen Online, International  Telecommunications Union (ITU), McKinsey, Euromonitor International,  Roland Berger and Finscope shows that Nigeria remains relatively  unbanked compared to Germany , United Kingdom , USA , Saudi Arabia, South  Africa, Namibia and Botswana.

While Nigeria has 79 per cent of its population unbanked, Germany,  United Kingdom, USA, Saudi Arabia, South Africa and Namibia and  Botswana have over 59 per cents of their population unbanked compared  to Nigeria .

However, bank accounts in Nigeria have grown from seven million in  2004 to 25.4 million in 2010 at 24 per cent compound annual growth  rate (CAGR) contributed by the apex bank policy to switch from  magstripe to EuroPayMastercard (EMV) chip and pin card conversion.