SIR: Contactless payments will soon arrive Nigeria, about two decades after some advanced countries started using it. Despite the huge benefits, however, contactless payments also carry some risks. To mitigate these risks, the Central Bank of Nigeria has recently rolled out guidelines on how best to operate this mode of payment and explained the roles of different stakeholders in the implementation of the scheme.

It is important for stakeholders in the financial and business environments to understand their roles in the implementation of contactless payment. A contactless payment is simply a wireless financial transaction in which the customer makes a purchase by moving a bank card, smartphone digital wallet app, or any other device in close proximity to the vendors’ point-of-sale (POS) reader. Because the device does not get in contact with the POS reader (unlike the normal debit or credit cards we are familiar with), contactless payments are also referred to as touch-free, tap-and-go, or proximity payments. Put differently, contactless payment is a way of paying that doesn’t require cash or even swiping a card. All you have to do is hold your contactless card or smartphone near a compatible card reader while you are checking out.

In introducing contactless payments into the country, CBN hopes to achieve its core mandates, which includes sustaining the safety and stability of our financial system and promoting a resilient and stable payments system. These mandates are enshrined in Section 2(d) of the CBN Act 2007 and Section 56(2) of Banks and Other Financial Institutions Act 2020, which empowers the CBN to make regulations for banks and other financial institutions. In driving one of its core objectives, the Bank recently unveiled a comprehensive set of guidelines for the implementation of Contactless Payments in the country, which is aimed at the standardisation of operations in the payments system, creation of new opportunities in business transactions, and promotion of inclusive banking. Just like the use of debit /credit cards, internet banking and mobile banking, contactless payment will further encourage cashless business transactions and reduce the volume of cash in circulation.

Given the vastness of the Nigerian market, the size of our GDP and the relative robustness of our IT infrastructure, Contactless Payments is an idea that has come to stay in Nigeria. It is now up to the key stakeholders to make it work. The relevant stakeholders are acquirers, issuers, payment schemes, card schemes, switching companies, payment terminal service providers, payment terminal aggregator, merchants, terminal owners and customers service agents. They will offer various services and play different roles in the seamless operation of contactless payments.