Managing Director, ChamsAccess Limited, Mrs. Funke AlomoOluwa
Managing Director, ChamsAccess Limited, Mrs. Funke AlomoOluwa, spoke with the media on how the adoption and application of new technology will enhance the ongoing cashless initiative. Emma Okonji who was there presents the excerpts
What is the role of ChamsAccess in the secure payments industry, and what are the latest trends in the industry?
The payment cards industry, in which ChamsAccess plays a significant role in the Nigerian market, has extended its frontiers beyond the technology of credit, debit and prepaid cards, as well as Automated Teller Machines (ATM), Point of Sales (PoS) terminals, and Internet banking. The industry is looking at new technology that will further drive business growth with huge revenue potential for participants in the global financial services industry.
Innovation in the application of new technology and business models to make payments more secure and convenient for consumers is trending. As such, mobile payments entailing the use of mobile banking apps, SMS/USSD-based transactional payment and Near Field Communication (NFC) mobile payments are on the rise in both developing and developed markets with non-financial institutions joining the payments value chain using technology infrastructure that facilitate financial transactions.
About two years ago, the Central Bank of Nigeria (CBN) estimated formal payments penetration in Nigeria at 36 per cent. Today, Nigeria lags behind South Africa by 59 per cent cashless penetration and Kenya by 52 per cent. To bridge this gap, the CBN deployed mobile payments in the Nigerian market with over 120 million active mobile phone subscribers to further deepen cashless initiative. The daily transaction volumes from the Nigeria InterBank Settlement Scheme (NIBSS) are pointers to the gradual achievement of this goal.
In a matter of years, cash will no longer be the predominant means of transaction in Nigeria, and the huge gap between the formal and informal economy will be bridged.
There have been lots of disruptions, using payment channels such as ATMs, PoS in the electronic payment space. How best can they be addressed?
We have experienced digital disruptions in several sectors of the economy that have embraced technology in their payment system. Therefore the electronic payment space in the financial sector cannot be said to be the only sector facing digital disruption.
Globally businesses are embracing the innovation that comes with it, and are transforming their business models in alignment with this reality. Locally, banks are investing in transformation into digital businesses. I am certain that you aware of social banking from GT Bank which makes it very convenient for their customers to view their account balance, perform money transfers, and open accounts, all on Facebook.
As a technology solutions provider to banks, we are abreast of mobile banking apps and how it will change our payments industry dynamics. We are working with our global partners like DataCard, Bitel, and KingTeller to deliver integrated solutions. While integration of mobile banking applications with PoS, and the use of contactless payment cards are emergent trend, we are presently focused on meeting the immediate needs of the market players.
Though cash is on its way out, it is still a strong payment option in the Nigerian market even as global payment standards are embracing mobile options.
How will the mobile payment platform provide consumers with adequate security that will address fraud in the e-payment industry?
The mobile payment platform comes with its own security measures that protects customers from fraudulent attacks. However, every innovation has its advantages and disadvantages, with areas for improvement as the solution becomes more utilised. The risks of mobile transactions can be managed.
For instance, the network-connected nature of mobile phones and devices mean that the payment mechanisms in the phone can be shut down if the phone is lost or stolen, the payment applications parameters can be changed immediately with new applications and security updates can be added almost instantly.
On the other hand, just like other e-payments channels, mobile payments have its vulnerabilities. The truth is that mobile phones were not initially designed for payment transactions resulting in issues with the current generation that could turn into major problems if not handled properly.
For example, the keypads in mobile phones are not secure like the keypads in the PoS terminals. It is taking a new generation of mobile phones design to fix secure keypads that verify and do not pose high risk to payment transactions.
One major challenge to e-payment system is the issue of limited bandwidth infrastructure. Do you think adoption of new technologies can address the issue?
Allover the world infrastructure is a major challenge to mobile money, but Africa has a greater challenge in this area.
The prevailing challenge has not prevented technology from making significant difference in markets like Kenya. Let’s use mobile payments as an example, the Kenyan market boasts of one of the most successful global deployments in mobile money, using MPESA.
Bringing it closer home, corporations doing business in Nigeria continue to invest in best-in-class technology to reduce operational cost, improve customer satisfaction and profitability.
The telecom companies, multinational manufacturing companies, and banks in the country are leveraging new technologies to improve business performance. For instance, we are in talks with banks in the country on the deployment of DataCard CardWizard for instant issuance of payment cards. This is a new technology that will redefine payments card issuance in the country.
How will electronic payment cards redefine the electronic industry in Nigeria?
Instant Issuance of payment cards is a new technology being deployed by leading banks in the sophisticated financial markets of Europe and the Americas. The solution makes it possible for new and existing customers of banks to walk into their branch to pick up a fully-functioning debit and credit card that are encoded with exceptional security features and are personalized in a few minutes.
In markets where it has been deployed, available data indicate that banks using the solution record higher debit and credit cards activation rates than banks that are not using it. No doubt, this will lead to greater card usage by Nigerians.
Is ChamsAccess adequately equipped to tap this unique window of opportunity?
Yes we are adequately equipped to provide expert service and support for financial
instant issuance. Our partnership with DataCard, the world’s largest provider of identity and card payments solution makes us very strong in this regard. There is constant knowledge transfer from DataCard to ChamsAccess through capacity building programmes.
ChamsAccess and DataCard have taken this a step further by involving the banks, exposing them to innovations in card issuance. Not forgetting that we are an integral part of Chams Plc; the leading provider of identity management and transaction solutions in the Nigeria market with 28 years heritage of innovation and customer success.
How is ChamsAccess differentiating itself as technology solutions provider in the marketplace?
As a business, our duty to the customer is to deliver exceptional service or product that is more useful and desirable than alternatives provided by competition. In segments where there are no alternatives, as well as segment in which we have many competitors and the grey market to contend with, we have been able to differentiate the ChamsAccess brand through innovation, first-class consumer experience, responsiveness, expert support service and consistent quality delivery.
How will you assess technology development in the country, vis a vis its many challenges in broadband deployment?
The telecommunications sector is about the fastest growing sector of the Nigerian economy due to the pressure of innovation on the global technology industry. To survive and retain competitive edge, local players are left to constantly readapt and align with global trends.
But a large chunk of the market, especially the highly profitable fast moving consumer goods segment in which products like phones and computers belong, is dominated by multinational technology brands. Clearly, there is presently a dearth of skills, funding and infrastructure in the Nigerian market to support such a venture.
However, Nigeria’s technology ecosystem is evolving with massive influx of foreign venture capital into the service sub-sector of the industry. Overall, there is need to bridge skill, funding and infrastructure gaps to ensure the holistic development of the local technology industry.
ChamsAccess plays prominently in the financial services sector which is experiencing operational and technological changes as a result of the ongoing transition from cash to cash-lite economy. What does this portend for your business?
The cash-lite initiative and biometric matching solution for customer identification by the banks are most helpful to our business. They are validation of our business case and prior investments in the e-payment space before the enunciation of these two policies. Let us consider the area of PoS.
The Central Bank of Nigeria set a target of 350,000 deployments by 2015. It means increased patronage for us from the banks and other end users. Cashless policy is boosting the adoption of electronic channels and usage of payments cards across the country which is good for our business and industry.
How will you assess the transformation of ChamsAccess from a strategic business unit in Chams Plc into a subsidiary, motivated by projected growth of technology needs of corporations in the Nigerian market?
In spite of its numerous challenges, you will agree with me that the country’s economy has recorded growth in the last 15 years since the return to democratic rule. The increasing demands for technology solutions by new and existing clients, as well as the need to further raise service delivery standards triggered the spin-off of ChamsAccess into a wholly owned subsidiary of Chams Plc, retaining and managing its affiliation to global brands that include Datacard Corporation, Bitel and iGuard.
What does ChamsAccess want to achieve in the next five years as a business?
ChamsAcess wants to achieve a premier position in the deployment of payment and Identity channels for financial services sector, multinational corporations and medium to large industries in the country. On the Identity management part, ChamsAcess deploys wide range of solutions, and aspires to be the known name across every state in Nigeria.
On the financial front, we want to achieve market dominance by catering to 90 per cent of all Nigerian banks and associated bureaus in terms of sales and more importantly support. Our strategy involves building an assembly plant for printers and ATMs within the next five years with a robust support mechanism providing services across all states of the federation.
What have been the most significant developments for you as a business?
We provide the best support service on both the central issuance system and the desktop printers. Over 70 per cent of financial cards are run by our machines – the Datacard central issuance machines. Also in the desktop space, we have over 800 printers across various banks for the instantly linked cards. We support these printers across the country, and we have improved on our ATM support through training and employment of resources.
Does ChamsAccess have solutions for community banks and microfinance banks in meeting the needs of their customers?
The community banks and Microfinance banks are perfect tools for financial inclusion strategy of the CBN. You would recall that in 2013, CBN rolled out guidelines for agency banking to deepen financial inclusion. We are working closely with our partners to deploy end-to-end financial instant issuance solutions with some financial institution. In a similar manner, Microfinance banks can leverage our solution on instantly linked cards.
On the ATM side, we are working with some Microfinance banks on shared services model for ATM deployment and support.
The thrift market is another area we are proposing the Point Of Transaction Terminals (POTs) to the Microfinance/community banks. Using POTs, such as the Bitel flex 7000 an agent can identify and electronically collect thrift in markets and various gatherings.