Cashless policy, which the economy has accepted as essential for the nation’s social-economic development,has, however,had its challenges caused by lack of infrastructures particularly seemed to be a clog in the wheel of its progress. In this interview with ISAIAH ERHIAWARIEN, the Country Manager for West Africa, MasterCard Worldwide, Mrs. Omokehinde Ojomuyide, insists that Nigeria does not need a full-developed infrastructure to make cashless policy a success.
WHAT is your focus in Nigeria?
MasterCard is a technology company that is focused on e-payments. So everything we do is about moving people from cash transaction to electronic transaction. We have a vision of a world beyond cash, and that is what we stand to achieve with our yearly exhibitions.
We do more than yearly exhibitions, as we are also involved in interactions with government and people as well as in promos. The essence is to educate people on the value and benefits of electronic transactions and to let people know that cash is expensive to manage and that the best way forward is to go cashless and embrace electronic transactions.
Specifically, what is your contribution to electronic payment in Nigeria?
One thing that MasterCard did about two years ago was to move fully into Nigeria and made Nigeria the hub for sub-Sahara Africa. By that move, we are running MasterCard operations in the whole of sub-Sahara Africa from Nigeria and the reason behind this is because Nigeria has the population to grow our type of business, and we also needed to develop Nigeria in the area of e-payment and we have been doing just that to promote electronic payment in Lagos and Nigeria.
The Central Bank is driving the cashless initiative, beginning with Lagos as pilot scheme, and we are very much in support of the initiative. Nigeria has just realised what developed countries have realised some years back in the area of cashless economy. We are encouraging the people of Lagos and Nigeria to go cashless, and we are doing just that with our partners who are mainly the financial institutions.
Apart from our customer through which, we reach the public, we are also collaborating with government in educating the people on the need to go cashless. We have had several promos in support of CBN’s campaign to go cashless. We have best practices initiatives on cashless that we are sharing with people and governments.
What is your assessment of CBN’s cashless initiative, concerning infrastructure?
Infrastructure is important in driving the initiative of cashless economy, but the infrastructure we have in Nigeria is developing. It is true that the country has not developed its infrastructural base, but we do not need a full-developed infrastructure before we implement the cashless policy. It is a gradual process, which I strongly believe we will get over with time.
Since the implementation began with Lagos as the pilot state, banks have invested a great deal in infrastructure, deploying lots of Point of Sales (PoS) terminals and other devices that will drive cashless in the society. Merchants have also changed their behaviour and they are accepting payments through PoS terminals.
Again, the electric power situation has to be improved upon, to enable the devices work. So I think there is room for growth as the awareness creation for cashless is increasing by the day.
The telecommunications operators are also playing their part by building telecoms infrastructure that will drive the cashless initiative. Since the whole system about cashless run on the platform of the telecommunications operators, the CBN brought them into the scene to provide the much needed infrastructure for the implementation of the cashless initiative, and they are doing just that.
People are worried about security. Do the issues of identity theft, hacking and cloning of cards bother MasterCard?
I quite understand that most Nigerians are still afraid of carrying out electronic transactions and I understand what is propelling such fears. The fears started from the days when we as a country, were using magnetic strip cards and old technology. Then those cards could be cloned, but with the modern technology that is in place, where we use Chip and Pin technology and the Verve cards, it has become very difficult to clone cards or hack into encrypted card numbers.
If people do not compromise with their Puke Identification Number (PIN) that is on their card, it becomes very difficult to lose money through the Automated Teller Machine (ATM) cards. Chip and Pin technology is safe and secured and that is what all banks in Nigeria and the world are using today.
Do you see the cashless policy promoting accountability in governance and among people?
Cashless policy is capable of promoting accountability in governance and within the private sector business environment. One of the reasons for electronic payment is the audit aspect, which completely eliminates cash, and discourages the tendency to pilfer, since there is no cash handling. With electronic transaction, it records the time of the transaction, the type of transaction and the money involved in the transaction.
The money is send electronically, through the debiting and crediting of accounts, without people involved in physical cash. For any government transaction, money is paid electronically and it will help to promote accountability in governance.
How does MasterCard operates in an environment where it does not have issuance electronic card, yet it owns a large chunk of it?
As MasterCard, we do not issue cards directly to customers but we license our partners to issue and acquire our cards worldwide. MasterCard has actually moved beyond cards, even though we are still involved in card business. We also do payments that are not card-based. Yes card payment has come to stay in Nigeria, but that is not the only way to do electronic payment. There is mobile payment, contactless payment, which enable financial transactions without the use of cash, where technology exists.
MasterCard is not directly involved with issuing cards because we have our licensed partners who do that on behalf of MasterCard.
What we do is to create infrastructure and ensure interoperability that will make electronic transactions easy and hitch-free.
When a bank in Nigeria for instance issues MasterCard cards, it is not their business to ensure that the cards issued work perfectly, but it is the duty of MasterCard to ensure that.
And so we do just that through the interoperability system put in place in all the Automated Teller Machines (ATMs) installed in all the 210 countries where we have our footprint worldwide. We create the infrastructure, the standards, and the interoperability that will enable users of our products plug into and make better use of them.
What are your strategies operating in a world beyond cash?
We are working to build a world without cash, and what we do in this regard is to make sure that our technology enhances payments from cash-base to electronic payments. We have a MasterCard laboratory where people are researching and creating new forms of payment system. Today we are talking about mobile payment, contactless payment and Near Field Communications (NFC) technology that will drive mobile payments, with mobile phones. We create a network of people and the technology that will enhance electronic payment system.
How will electronic payment system drive e-Commerce?
Electronic Commerce also known as e-Commerce is the next big thing that is driving cashless across nations. People sit in their offices, homes in Nigeria, and go shopping online abroad. They visit different websites and do their shopping online, make payments online using the MasterCard and the items are delivered to them online. This is done without the person leaving the shores of the country.
Again, with e-Commerce, Nigerians can display their goods and services to the rest of the world by taking their businesses online. People from different states of Nigeria and from different countries of the world will get to see the goods and services of the dealer in a particular location in Nigeria. So it helps to promote business and advance economic development, because many people want several things, but do not know exactly where and how to get them. E-Commerce makes it easier for everyone to trade in different types of businesses at the most convenient way.
What are some of the challenges faced by MasterCard in its efforts to take countries beyond cash?
There are several challenges, but we are surmounting them. The challenges are not just for MasterCard, but for every institution in the financial ecosystem. Communications is one major challenge. There is gap in data communication between the PoS terminal and the backend.
The gap creates some delays in transaction and we need to improve on that. Power is also a major challenge in Nigeria because the PoS terminals are power driven and without electricity, they cannot work. Consumer education is another challenge for us. Some people are still not excited with the cashless initiative and we are doing a lot to educate people, to enable them see the need for electronic payment system.
What is your MasterCard working relationship with government or regulatory authority on the cashless initiative?
Yes we are working with the regulator and government, but beyond that, we have several partners we are working with in every of our locations worldwide. In Nigeria, we are working with the Federal, State and Local governments and we are working with the Central Bank of Nigeria, the regulator of the financial institutions in the country.
How would you rate MasterCard in Nigeria and internationally?
In Nigeria MasterCard is accepted everywhere. Virtually all the banks in Nigeria issue and use MasterCard products. We do not have any challenge on acceptability in Nigeria, because there is a standing rule from CBN that all financial transactions must accept MsaterCard products and virtually every bank in the country, issues MasterCard cards for their online transactions. Internationally, MasterCard is accepted in 410 countries, at 33 million merchant locations.