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Collaboration, infrastructure sharing top deliberation on payment architecture

By Geoff Iyatse
09 May 2023   |   3:56 am
The Managing Director of eTranzact International Plc, Niyi Toluwalope, has made a case for stronger collaboration among operators in the country’s payment system, saying infrastructure sharing is one of the cheapest strategic options for bridging the infrastructure gaps.

Niyi Toluwalope

The Managing Director of eTranzact International Plc, Niyi Toluwalope, has made a case for stronger collaboration among operators in the country’s payment system, saying infrastructure sharing is one of the cheapest strategic options for bridging the infrastructure gaps.

Toluwalope shared the view in his presentation at a Central Bank of Nigeria (CBN) workshop for financial correspondents and business editors held in Calabar, the Cross River State capital, last week.

Whereas competition is the life of the modern payment industry, the eTranzact boss said the much-needed efficiency cannot happen with “repetitive investments” and called on operators to be more collaborative in addressing the infrastructure deficit.

The advice came as the CBN plans a broad-base audit to determine the strength, reach and capacity of available infrastructure and determine holes that must be plugged to improve the quality of Nigeria’s smart payment in the country.

While Nigeria prides itself as one of the few countries with the most advanced smart payment, the steep surge in the volume of transactions in the past four months has exposed the sore underbelly of the underlying infrastructure, kneecapped efficiency and called for more investment in relevant segments of the value chain.

But Toluwalope said a silo approach to the demand for an urgent scale-up would still not address the challenges. Rather, he urged operators to invest with the entire industry in focus as “there is no point duplicating critical expenditures in the face of a huge need.”

Through collaboration and sharing, he said, the industry would achieve a faster speed in recovering lost ground and recalibrated to provide more quality service.

“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.

Providing an operator’s perspective to ‘Designing a Robust Payment Infrastructure Architecture’, Toluwalope, who had worked in key financial hubs including America and Britain, said electronic payment transactions surged by as much as sevenfold in the height of naira redesign implementation, increasing the pressure on the system by unimaginable proportion.

Until the system can absorb any level of increase in transaction volumes seamlessly, he argued, it is far from achieving efficiency, agility and scalability. Other attributes listed as marks of an efficient payment system were interoperability, security, reliability, future-proof and user-friendliness.

The eTranzact boss said: “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.”

Payment system operators must, with sufficient data, be able to track behavioral changes and changing market patterns, he added.

“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.

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