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‘How e-payment is revolutionising Nigeria’s economy’


John Obaro

SystemSpecs has transitioned from being known as an innovative designer of human capital management software to e-payment and payroll. John Obaro, its founder and managing director says the firm, leveraging its strength in both areas, is also working with strategic partners to provide lending services. Obaro also speaks about Remita, the firm’s flagship product and the Treasury Single Account (TSA) initiative. Paula Eseghene reports

Who is John Obaro? Give us a synopsis of your background?
I was born on April 19, 1958, so, that means I’m 60 this year. I was born in Kogi State. I then lived with my uncle in Kano where I had my primary school education. After three years, we moved to Ilorin where I completed my Primary School. I attended Government Secondary School in Ilorin, then Kwara School of Technology for my A-levels. From there, I applied to the University. Incidentally, in Secondary School, I was not very good at mathematics, until I met a young teacher who simplified things, and mathematics became my best subject. When it was time to fill my application forms, I did not want to go in for Mathematics single honours or Engineering alone. So, while looking through the university’s brochure, I saw a course with a very long musical name called Mathematics with Computer Science. So, I ticked it. That is how I ended up studying Mathematics with Computer Science at Ahmadu Bello University (ABU), Zaria, where incidentally, I was honoured with an award called Icon of Industry.

After my university education in Zaria, I ended up at the University of Lagos for my MBA. I worked briefly at Leventis for about six months, then UBA, for two years, before moving to the International Merchant Bank (IMB). At IMB, after about six months, I was appointed head of the computer department and worked there for about seven years, before I started SystemSpecs.


What was the motivation to start SystemSpecs?
IMB was good to me. I was promoted almost every year, but I was doing essentially the same job. New banks were being licensed and I saw people exiting and going to get one or two grades up in the new banks. I felt I needed to do something different. At that point in time, only the banks and oil companies were into I.T, so I thought I should come up with something for non-bank and non-oil industries. We started out by partnering with a UK firm called Systems Union to support their accounting software called Sun Systems in Nigeria.

What was your journey like after setting up SystemSpecs?
We started by supporting the Sun Systems accounting software in Nigeria. We sold to organizations, installed it on their hardware, and trained them on usage. Then, we supported them over the years.

We were with Systems Union (which later became Infor) till about a few months ago. Being with them for 25 years, we felt we needed to consolidate our position as a fully indigenous brand by devoting more attention to our wholly Nigerian products.

You have made significant impact with Remita, what triggered its creation?
We started out with SystemSpecs to develop a Payroll and Human Resource Management platform. When Interswitch came on board, we had a conversation with them to explore the possibility of dropping data to Interswitch’s platform so that they would be able to apply the credits across the banks to which they were connected. Unfortunately at that point in time, Interswitch’s platform was more optimized for one-to-one transactions and not one-to-many. We were therefore challenged to speak to our own immediate needs then, which were one-to-many – debit one account and credit many accounts. We then developed what we call our non-switch version of Remita.

Many say you have revolutionalized and disrupted e-payment in Nigeria. Give a brief of how you have been able to achieve this feat.
I will say God has blessed me with a very good workforce. Young people who are able to brainstorm together and challenge ourselves to the next level. Remita was designed to address the problems of payroll and the pension industry. The PenCom Act had just been promulgated in 2004; we read up on it and designed Remita in a way that when salaries were paid, your pensions will also be paid simultaneously. We made a pitch to PenCom but lost out because they did not see remittance as their immediate need.

This then propelled us to begin to think of other uses of the beautiful solution we knew we had on our hands. We then cleaned up the system and made presentations to other companies, one of which was a presentation to a multinational company in Ikeja. The presentation went very well, but at the end, the expatriate Director of Finance made a comment that our product was beautiful because we were going to automate the payment of his staff salaries. However, it created a new challenge for him because it meant that half of his business in the Finance and Accounts department will be automated and another half would be manual for the payment of vendors. His preference was for it to be fully automated or fully manual, as he did not have the capacity to handle both.

We lost that bid. But on our way to our office, we started thinking about how to upgrade what we had for the payment of salaries, to also be able to pay individual accounts, which is how we came about the vendor payments.

In 2012, we got to a point where we felt we needed a Central Bank license and before then we had some good clients as Remita was becoming more popular. We applied for the Central Bank License. When CBN officials came on their inspection tour, we noticed they were talking amongst themselves and asking a lot of questions. At the end of the day, they seemed intrigued at what we were doing and suggested we make a presentation to them in Abuja. This was how we got to know that the Central Bank had just written a letter to the office of the Accountant General to delay the implementation of the World Bank’s recommended Treasury Single Account (TSA), for at least another two years because there was no technology to support it. When they saw what we had, they were very excited. That was how we got on the TSA train. We continued to work in the background and went live in January 2013.

How has Remita managed to stay ahead and innovate?
We are in the business of continuous innovation, so you cannot afford to stand still. A lot of new things keep coming up. When we started Remita, there were no mobile phones; we were focused only on the web, which was exciting enough. In the last few years, mobile phones have become a very strong channel for transactions. Last year, for instance, we launched the mobile version of Remita and what that does is that it empowers individuals and organizations to see all their bank accounts on one platform and to transact on that platform. As an individual, I can manage all my multi-bank transactions from my phone, and on the same phone I can approve transactions for 3 or 4 other entities in which I am a signatory.


Where do you see the payment industry going in the next one year?
In the next one year, I see a lot more collaboration in the industry. Organisations like ours are called Fintechs. When fintechs first came, banks for instance were scared, but increasingly banks have seen that there is more to gain from collaborating with fintechs than attempting to block them out. Going into the future, I see a lot more customer-focused, lifestyle-driven applications. USSD (popular codes such as *737#, *901#) will also do very well.

Do you see a convergence in the payment industry and how do you think these players can collaborate to provide greater value?
First, there needs to be a focus on the customer: what does the customer want? Rather than what can I as a bank or fintech push to the customer? That’s where collaboration comes, which is, you take the best you have to merge the best of what your competitor has in order to deliver a winning proposition to the end market. Any bank or Fintech that refuses to do that will create silos for themselves and will one day be edged out.

SystemSpecs has transitioned from being known as an innovative designer of human capital management software to e-payment. What should we expect to see next?
We want to leverage our presence in those two areas. We aim to be strong in payroll management and payments. We are now poised to provide qualitative data referencing for lenders. We started out with Access Bank. If you dial a code, Access Bank calls us and you give us your authorization to share your payment data with Access Bank such as your past six month’s salary. Access Bank will then run their algorithm to determine the amount of safe loans you can take. That way the rate of default is low. In addition, when salaries are to be paid, we are able to intercept the payments and divide it into two. We give one portion to the individual who took the loan and the second part we pay as fees to the lenders that gave out the loan.

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