Banks to pay customers for using e-payment channels

The Central Bank of Nigeria says it has approved an industry-wide incentive scheme and awareness campaign on electronic payment channels for stakeholders and users.

As a result, the CBN is collaborating with Deposit Money Banks through the Nigeria Inter-Bank Settlement System Plc to work out a system that will make banks to pay customers, merchants and salespersons for using electronic payment channels. Some analysts see this as a gradual paradigm shift from the CBN’s punitive approach in driving the cashless policy to an incentive-based one.

The Electronic Payments Incentives Scheme will make bank customers, merchants and salespersons receive cash and gift rewards for using electronic payment channels. The scheme will commence in batches, starting from November 1, 2014. The central bank said the move was in furtherance of the drive for pervasive usage of e-payment channels in the country. It said in a circular posted on its website that the scheme would appreciate and reward usage across all channels with emphasis on channels of e-payment that promote financial inclusion.

The circular, signed by the Director of Banking and Payment System, CBN, Mr. Dipo Fatokun, read in part, “The scheme has identified and will reward consumers, merchants and sales persons. The incentive is designed as a ‘white-label’ campaign in which all stakeholders are required to partner.” According to the circular, the scheme will lead to a point-based reward system for consumers in which Automated Teller Machine cardholders will be rewarded based on point grossed through frequency of card usage.

The central bank said NIBSS would implement the programme in conjunction with other service providers. It noted that the scheme would also involve cash refund to customers; a system that was already being implemented by all the banks. It added, “Merchants may leverage on the incentive scheme to offer promotional gift items to their customers based on the usage of e-payments for transactions. Salespersons will be encouraged to support e-payments by having them enrolled on the tipping point schemes, through which they will earn points accrued over a period. Such points may be redeemed by salespersons through various gift items or cash.”

The CBN director further noted that the EPIS would lead to reduction in merchant service charge from the current 1.25 per cent (N2,000) to 0.75 per cent (N1,200). According to Fatokun, it will also lead to exemption from Commission on Turnover charges such that the free COT will be accelerated ahead of the dates in the ‘Guide to Bank Charges’ for merchants.

He said the NIBSS would collaborate with the DMBs for the implementation of Point of Sales functionalities that would permit merchants to offer cash-out services to their customers. Meanwhile, beginning from March 1, 2015, Deposit Money Banks in the country will start barring customers without biometric registration numbers from carrying our certain transactions, the CBN has said in a new circular posted on its website The circular stated that the scheme was part of efforts to develop a safe, reliable and efficient payment system in the country.

The CBN, in collaboration with the Bankers’ Committee, had in February inaugurated the biometric registration exercise.

It said the exercise would lead to the issuance of Bank Verification Number to every customer. The BVN is a unique identity that will help to mitigate frauds, money laundering and other illegal acts. In the circular, which was signed by Fatokun, the central bank said all bank customers should have had the BVN by July 2015. The circular read, “The CBN has observed the progress made so far in the implementation of the BVN project. In order to increase the tempo of the enrolment by the DMB customers in the BVN and to start the enormous benefits of the project, it is imperative to stipulate milestones for the implementation.

“All stakeholders are hereby advised to note and implement the following; that by March 2015, transactions valued at N100m and above should only be allowed for customers with the BVN; (this includes, but not limited to money transfers, loans, contingencies etc.); that by June, all bank customers should have the BVN. Any bank customer without the BVN will be deemed to have inadequate Know Your Customer.”