CBN to issue guidelines on contactless payment system

The Central Bank of Nigeria (CBN) has revealed that it is set to issue guidelines to promote safe and efficient use of contactless payments across the country. This, according to the apex bank is part of its effort to modernise and drive the cashless payment policy in Nigeria.

Musa Jimoh, Director, Payment Systems Management Department at CBN, stated this during the recently concluded 34th conference for Finance Correspondents and Business Editors titled “Implementing a Robust Payment Architecture: Prospects, Opportunities, and Challenges” in Calabar.

Jimoh who was represented by the Deputy Director, Payment Systems Management Department at CBN, Adefuye Adeyemi, said the introduction of contactless payment is another tool the apex bank will introduce before December 31 to mitigate any inconvenience that may arise when the old notes make way for the new ones. Describing the contactless payment system as a technology that enables an alternative payment method whereby payment instruments are used without physical contact with devices, the Deputy Director said the guidelines would cover the technical and operational requirements for implementing contactless payment systems and the security measures needed to protect customers’ information.

“Contactless technology in payments will provide easy, convenient, and efficient cashless options for users. Create shorter queues at checkout points. The instruments that will be used for contactless payment include pre-paid debit and credit cards, stickers, fobs, wearable devices, tokens, and mobile electronics devices’’.

An interesting feature of contactless payment is the introduction of Free on board (FOB). In this case the risk of loss shifts from the buyer to seller”, he said.

Identifying some of the benefits of contactless payment which include ease of payments, speed and convenience to consumers’ in-person transactions using their phone, Adefuye noted that this would enhance customer experience.

According to him, “the contactless payment system is more secure than traditional payment methods thus giving customers peace of mind; it will reduce printing of currency thus save the regulator cost of printing and managing currency in circulation; and it reduces spread of contagious diseases during payment due to the lack of contact”.

When quizzed on what the apex bank’s strategies are as regards the phasing out of the old naira notes and the availability of the new naira notes amid the December 31st deadline, Adefuye said, “We are ready and working effectively on that. If we look at India, they did exactly what we did. They did a currency redesign for 6 months and the outcome was the same problem we had and the bad part of it is that people lost confidence in the currency to the extent that people stopped saving their currencies in banks and kept it at home.

Yes, we know there is a loss of confidence but overtime, everything will come back to normal. The December 31st deadline is still a long way to go. That is in about 8 months’ time and so I know we are ready”.