Multiple Failed Transactions Mount As E-payment Falls To N37trn

Multiple Failed Transactions Mounts As E-payment Falls To N37trn
With the cash crunch which has been caused by the Naira redesign policy by the CBN, it is expected that cashless transactions should be on the rise but the reverse is the case.
Multiple failed transactions have caused a sharp decline in the value of cashless transactions from N39.58trn to N37.67trn which is about 4.83% of what was recorded in January 2023.

This is coming on at a time when e-payment gateways recorded a sharp 41.29% month-on-month increase according to the data presented by the Nigeria Inter-Bank Settlement System. The recent data shows that in February, the e-payment solution was used 901.46 million times, while in January, it was used 638 million times. However, the increase in usage has now fallen in February, which shows an increase in the number of failed transactions.

The NIBSS has not updated its efficiency platform portal, which shows the number of failed transactions and other data reports, and it has been difficult to report the number of failed transactions as the report has not been updated since 2020.

The NIBSS gives reports on cashless transactions from the Nigeria Instant Payment System and Point of Sales terminals, which shows that the total of NIP in February fell to N36.79trn from N38.772trn in January.

However, the data from the NIBSS also showed that the value of PoS transactions grew from N807.16bn in January to N883.45bn despite the scarcity of cash recorded in that month. While the use of mobile transfers, which is one of Nigeria’s major payment gateway increased by 69.87% from 108.41 million times in January to 183.69 million times in February.

The usage grew quickly but transaction value only grew marginally by 7.88% from N2.37trn in January to N2.56trn in February and this shows the reality of many Nigerians in the month, who suffered multiple failures of mobile transactions.

The apex bank which announced the policy said “The maximum weekly limit for cash withdrawals across all channels by individuals and corporate organizations shall be N500,000 and N5m respectively.”

It also added that “Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”

The increased pressure on the use of electronic payment has overwhelmed the banking sector, which has caused many customers to be stranded. Nigerians have taken to Twitter several times to tag banks and complain about failed transactions multiple times, which recently, the Vice President of the Nigerian Association of Small Scale Industrialists, Seun Kuti-George, disclosed to The PUNCH, “I made a payment to someone one morning and they did not receive the alert immediately.

“I had to leave the goods there until the next morning hoping that the fellow would get alert by then. If it was an emergency or a matter of life and death or a matter of contract that will be canceled, I would have lost that.”.

While many banks have faulted the NIBSS for not increasing the capacity to handle a large volume of transactions as the cause of the multiple failed transactions. A banker at First Bank, speaking anonymously disclosed that the NIBSS has experienced more downtime because of the pressure of the transactions.

According to the banker also, this downtime has been hindering the outflow and inflow of transfers. The banker added that the payment switch has to increase its capacity to be able to handle the pressure from the CBN’s policy.

While another source in the payment industry, also recently disclosed to The PUNCH that the multiple failed transaction is due to pressures on the system and a lack of robust infrastructure to handle the pressure.

“I don’t think we are ready for this. I think the infrastructure is not robust enough to carry out the volume of transactions we intend to do. With that said, I believe is over time, the infrastructure will catch up. This will probably happen because the CBN will put pressure on the banks and financial institutions to invest more.” The source said.

Experts have also stated that a lot of failing transactions are also a result of poor network infrastructure. The President of the Bank Customers Association of Nigeria, Dr. Uju Ogunbunka, disclosed to The PUNCH, “You know the banks do not provide network services. Based on what we found out, there was a failure in the network system.”