Poor connectivity dogs PoS transactions

• Lagos records 62% adoption rate

TELECOMMUNICATIONS network connectivity difficulties continued to mar the progress seen in Point of Sales (P oS) adoption rate in Nigeria, according to findings.

While this challenge persist, it has also been discovered that there is still huge preference for cash among consumers and a low level of awareness of the benefit of using PoS especially among non-users.

Already, as at December 2014, Nigeria has deployed about 350, 000 PoS terminals across the country, a significant increase from the about 120,191 in 2013, but a new Nigeria Inter-Bank Settlement System (NIBSS) report, obtained by The Guardian, on Monday, showed that 72.5 per cent of non-users claim to be unaware of the benefits of using PoS.

The report, however, put PoS adoption rate in Lagos at 62 per cent. It noted that 62 per cent of merchants provided PoS payment option and 63 per cent of individuals owned and used debit/credit cards that is 70.4 per cent ownership among 90.2 per cent banked adults in the state.

NIBSS observed that PoS is the most popular non-cash payment channel, preferred among the non-cash payment options by 93.6 per cent of merchants, and 35.8 per cent of consumers usage, stressing that usage of card/PoS is fair with an average of three to four out of every 10 customers requesting to pay for transactions by card/PoS.

However, the report said only 3.1 per cent of consumers cite card/PoS as their preferred payment option attesting the low usage of PoS.

On the connectivity challenges, The Guardian, through some interactions with representatives of popular eCommerce firm in Nigeria, at different occassions, observed that when customers use their credit/debit cards on the PoS terminals, which are run by commercial banks, customers account are debited without the fund getting to the eCommerce platform and such has brought up arguments and counter arguments between customers and merchants.

Atimes, when the customer is lucky, the fund can be returned to his or her account immediately, but should the network challenge persist, it could take between seven or 14 workings days before the fund is returned to the customers account.

Meanwhile, to improve the challenge of connectivity, the report recommended global SIMs along with Local Area Network and more intelligent PoS terminals.

Besides, CBN should implement service standards for the industry, as well as enforce disciplinary measures for erring operators.

The report also wanted NIBSS to improve consistency of PoS data reports to banks to aid the reconciliation process, and also enhance the support framework to processors.

In terms of adoption, the report said greater effort must also be made to communicate the improved security features of PoS to consumers in order to allay concerns about fraud and encourage confidence in the PoS system.

In addition to continuing efforts to make cash unattractive, the CBN should encourage banks to deploy more PoS terminals to lower value or more informal businesses; as well as review PTSP operations to solve problems of inadequate service currently being reported by banks and merchants

Card processors, which contributed to the report, noted that there are too many stakeholders involved in the end-to-end processing of PoS transactions and that this accounted for inefficiencies and a lengthening of the timeframe for resolving issues.

To deepen usage across the country, the report advised that technical features that are connectivity base must be improved; focus must be on deploying PoS terminals to informal/open-air or unstructured markets where adoption and use are extremely low and improvements must be made to the timeframe for resolving PoS complaints.