By Christian Mmadubuogu
How do you trust a person that leads you out of the desert but ends up dropping you in the middle of the sea? How do you trust a system that promised an ‘easy peasy’ banking experience but ends up fagging you out with incessant technical hitches and excuses? How do you trust a government’s idiosyncrasy of the ‘change’ homily while it continues to maintain the status quo of ‘business as usual’ How do you reconcile the regulatory deficiencies that leave the citizenry confused and doubtful?
A thousand ‘hows and whys’ yet no answer or even an attempt at amelioration. The level of public confidence in banks operating in Nigeria is fast dissipating and not such that can guarantee effective customer patronage of inter-bank payments.
According to media reports, Point of Sale (PoS) transaction failure hit an all-time high in March, with a leading commercial bank recording about 30,000 failure in one day on its platform. Though transactions via the PoS had not heretofore been great, it further deteriorated from October last year.
The general belief is that banks are failing Nigerians. Ask an average Nigerian what he thinks, and he would tell you that the internet services banks promised to make for a happy and less stressful experience, is now the bane that he contends with.
The truth that the people have yet to grasp is that the failings of the electronic transfer system is out of the hands of the banks. The main culprit is the Nigeria Interbank Settlement System (NIBSS).
When all Licenced banks through the Central Bank of Nigeria decided that it was pertinent to provide a single settlement window, they set up NIBSS in 1993 but it was not until 1994 that it kicked off. Life was easy and people were happy until same apex bank decided yet again that NIBSS deserved to be overloaded. NIBSS in 2011 accepted the burden of biting off more than it can chew by adding electronic fund transfers to the settlement system they already handle and called it NIBSS Instant Payments (NIP).
NIBSS may be a phenomenon — the preferred option – in the aspect of the settlement, a darling of the financial sector on properness and timeliness of checks and balances, but NIP is a total flop and among the growing number of the service’s 28.5 million customers (Jan-June 2018), backlash is brewing. The system has repeatedly fallen and is still falling short of expectations, and annoyingly, they make excuses every time. When people decried the interminable error messages which were responses to failed transactions during the June Salah holiday, NIBSS blamed their incompetence on technical difficulties.
When the Federal Competition and Consumer Protection Bill was finally passed into law to consolidate the 2014 Act, hope rose for Nigerians. Consumers were excited to have a government that stands behind them and the business savvy lot were encouraged to succeed even in the saturated market space. Amongst others, the Act proscribes unfair business practices or abuse of dominant market position by any company, as well as any agreement to restrain competition, and to put a check on the aforementioned, a commission was set up. The Act mandates the Federal Competition and Consumer Prohibition Commission (FCCPC) to administer the regulation. But for the government to now play conflicting roles of both a player (NIBSS/NIP) and a regulator (CBN), it shows that there is not only market failure but also government failure.
The question is ‘who regulates the regulator?’ FCCPC – regulator – CBN (pioneers of NIBSS) – regulator – This is a case of an intervener’s shortcomings more or less approximating or exceeding the market imperfection.
Ideally, one of the chief roles of government, particularly government embedded in a highly commercial culture, is to serve as a dispassionate go-between for settling contingencies about veridical claims in the marketplace. But government today has so many stakes in the outcome of so much enterprise that they do not care about the murmurs of the end-users.
NIBSS has been and is still proving themselves incapable of handling the instant payment system. The woman who rushes to the mall to buy food for her home and unable to pay with the PoS; the student who takes a bike to an ATM and unable to pay the motorcyclist from inability to make withdrawals, the company whose employees start to lose faith in because they failed to pay salaries as a result of malfunctioning e-payment channels and a host of other end users are fed up with the system. It is either they stop with the whole attempt now and face that which they are good at – settlement – or God help Nigerians who may have been led out of the desert only to be dropped off in the middle of the sea. The heart-breaking part would be if they cannot swim