Niyi Toluwalope, the managing director of eTranzact International Plc, has argued for closer cooperation between the country’s payment system’s providers, claiming that infrastructure sharing is one of the least expensive tactical solutions for filling in the infrastructure gaps.
Toluwalope presented the idea at a workshop for financial correspondents and business editors hosted by the Central Bank of Nigeria (CBN) last week in Calabar, the capital of Cross River State.
The eTranzact CEO stated that while competition is the lifeblood of the modern payment business, the much-needed efficiency cannot be achieved by “repetitive investments” and urged operators to work more cooperatively to address the infrastructure gap.
The recommendation came as the CBN prepared a thorough audit to evaluate the capability, reach, and strength of existing infrastructure and identify any gaps that must be filled to raise the standard of Nigeria’s smart payments in the nation.
Nigeria prides itself on having one of the most sophisticated smart payment systems, but the sharp increase in transaction volume over the past four months has exposed the infrastructure’s flaws, stifled efficiency, and prompted calls for more investment in key value-chain segments.
Toluwalope, however, asserted that a silo approach to the need for a rapid scale-up would not resolve the issues. Instead, he advised business owners to focus their investments on the entire industry as “there is no point duplicating critical expenditures in the face of a huge need.”
He asserted that through cooperation and sharing, the sector would recoup lost ground more quickly and recalibrate to offer higher-quality services.
“Payment in Nigeria has entered a new era of growth and requires that stakeholders view payment infrastructure through new lenses. Efficiency can be achieved by reducing repetitive investment in payment infrastructure while ensuring competitiveness by empowering a qualified set of fintechs with demonstrable capabilities to provide payment infrastructure needs for the rest of the industry,” he suggested.
Toluwalope, who has experience working in important financial centers like America and Britain, provided an operator’s perspective on “Designing a Robust Payment Infrastructure Architecture” by stating that during the peak of the naira redesign implementation, electronic payment transactions increased by up to sevenfold, placing an unfathomable amount of strain on the system.
He stated that the system will not be efficient, agile, or scalable until it can effortlessly handle any amount of growth in transaction volumes. Interoperability, security, dependability, future-proofing, and user-friendliness were cited as additional characteristics of an effective payment system.
The CEO of eTranzact stated: “Competitiveness is a key attribute of ideal payment systems where individual payment service providers (PSPs) are compelled to improve and strengthen their technology stack and business models to deliver better operational and cost efficiency in processing transactions and serving users. To enable this, regulators must enable a level-playing field for all stakeholders.”
Operators of payment systems must have access to enough data to be able to monitor alterations in consumer behavior and shifting market trends, he continued.
“Market trends are constantly changing especially in the financial services industry, an ideal payment system is designed to anticipate changes in evolving market demands and enable upgrades without leading to preventable disruptions in service delivery,” he noted.
