In recent times, the Point of Sale (PoS) machines has surged significantly in the digital banking space as cardholders who were initially cautious about digital banking and safety of their funds are beginning to tap into the space especially as COVID-19 pandemic reduced cash demand and usage.
As banking becomes more interesting with the advent of discoveries making digital banking the new rendition for all stakeholders to increase transaction speed and security, the number of active POS machines cuts drastically to reach 167,000 in January out of the 307,000 PoS machines deployed nationwide, leaving the gap at 140,000 as cardholders lament rising charges for using the device.
Speaking on the development, Harrison Nnaji, Chief Information Security Officer at First Bank, pointed out that there are two broad components in the financial services sector- the brick and mortar- over-the-counter transactions and digital transactions. He added that the last decade has seen migration to digital platforms.
He added that the growing digital space and risk have made it difficult for some customers to trust the digital system. “You will not be surprised, that today, there are still some people that do not have payment cards because of fear. You have a situation where customers actually do not need security; they need confidence in the digital products that banks offer,” he said.
Meanwhile, banks and other financial institutions are taking advantage of digital banking as the reality today calls for real-time payments and banking capabilities made available at the time and place of need to improve financial inclusion, access to credit and getting transactions done at the lowest possible cost to achieve seamless digital banking and improved access to financial services. Thus banks are aggressively entering into the digital space and this has caused a rise in the Point of Sale (PoS), Automated Teller Machine (ATM), mobile and internet banking activation and usage across different segments of the economy as well as the unbanked.
According to Nigeria Interbank Settlement (NIBSS) data, Nigeria has 30,000 Automated Teller Machines, and over 6,000 bank branches and 307,000 Point of Sale (PoS) machines. While the POS account for the largest, nearly half of the figure has abandoned the machine due to exorbitant amount charges.
The volume of electronic payment transactions through PoS terminals dropped by 4.83 billion While the PoS value transaction declined to reach N60 billion in January as merchants demand for N50 fee for using the device causing transactions to drop from 46.13 billion deals in December 2019 to 41.3 billion in January despite CBN directive that the charges be borne by merchants.
Speaking on the added fee, Musa Jimoh, the CBN Director, Payment System Management Department, in his view urged customers to reject the N50 PoS fee whilst also noting that stamp duty as a fee regulated by an Act has been misinterpreted.
“Our circular that talks about merchants paying stamp duty according to the law, does not say that the stamp duty should be paid by the consumer. That’s actually a misrepresentation of the CBN’s directive.
Condemning the act, Uju Ogubunka, the President of the Bank Customers Association of Nigeria said, “I expect the CBN to move beyond its directive that bank customers reject the fee and fight for customers. Another option is for the customers to carry cash and avoid the fee where the risks are minimal.”