Payment System Vision International Payments Conference Abuja 2013 PSV Initiatives – Breakout Session TRANSPORT

Payment System Vision TRANSPORT INITIATIVE Background Our mandate is to demonstrate the benefits of e-payments in the transport business by implementing a PILOT with companies such as BRT, ABC Transport, Danfo operators, Taxi operators(Yellow Cab, Red cab), etc. The Transport Initiative aims to, at a minimum, develop strategies for getting the public to pay for (inter-city and intra-city) transportation electronically. The benefits to commuters, transport businesses and investors, and the nation at large are enormous. Electronic payments hold great potentials for the Transport sector especially where electronic payments are imbibed at all stages of the entire Transport value chain. Transportation or commutation is part of everyday living today.

Payment System Vision 2020 TRANSPORT INITIATIVE A closed eco-system accepting dedicated payment cards and/or normal payment cards Good public awareness Easier to offer incentives for electronic versus cash. Pilots publicised as model implementation to attract the interest of stakeholders in transportation business 3 Rationale

Payment System Vision 2020 OBJECTIVES To demonstrate the relevance of cashless system to the transport sector Increasing adoption of electronic payments over cash To show that electronic payments has benefits for the transport sector in cost savings, safety, and bottom line, and engenders Financial Inclusion. Pilot implementation To articulate different areas of the transport sector where electronic payment is applicable – vehicle purchase, hire purchase management(e.g. direct debits), passenger payments, fuel purchase, insurance, data gathering and management etc Pilot implementation To engage different transport stakeholders in publicity/enlightenment programmes Number of industry stakeholders engaged. To generate statistics that are relevant to transport sector, to facilitate electronic payment adoption trends Periodic release of transport sector statistics To articulate incentives for electronic payment consumers, to grow adoption e.g. discounts for e-payment based passenger payments Adoption rate 4

Payment System Vision 2020 STAKEHOLDERS 5 Banking IndustryUser CommunityService Providers 1CBN Consumer Rights Protection Agency Banks 2 All Banks as issuers of payment tokens Taxi Drivers associationProcessors 3 All Banks as acquirers of electronic transport payments Transport Owners AssociationNigeria Central Switch Transport Employees AssociationNIBSS (settlement) 4 Petrol stations Card Schemes, Mobile Payment Operators 5 Air Travel industry EFiNA 6 Auto dealers FRSC Federal Ministry of Transport; States Transport ministries 7

Payment System Vision 2020 SYNERGY WITH FSS FSS2020 Work Stream Level of SynergyRationale and Approach to Leverage Synergy Financial MarketsHighPayment s is an integral part of transport system. Adoption of electronic payments in transport business will help to grow electronic payment adoption in other facets of life. InsuranceMedium MortgagesLow PensionsLow Credit (Micro/SME)MediumElectronic payments will promote credit in the transport sector – Direct Debits will grow lease and hire purchase market.

Payment System Vision 2020 IMPACT ON FSS2020 THREE COMMON THEMES FSS2020 ThemeLevel of supportRationale and approach to support the Theme DeepeningHigh Everyone uses the transport system. The success of this initiative will help in shifting paradigms from cash to non-cash in other aspects of life Economic GrowthMedium Success of this initiative will enhance economic growth as it will help to deliver electronic payments benefits in the country convenience, higher velocity of money, enhanced revenue for investors in transport business, etc. InternationalMedium Success of this initiative has potentials of attracting foreign investment to the transport sector. 7

Payment System Vision 2020 KICK-OFF TASKS (2 MONTHS) 8 MilestoneSpecific deliverables 1 Ascertain current payment practices for transport at a major city e.g. Lagos State-of-the-Art report 2 Articulate cost-benefit analysis of cash/electronic payment for transport system Cost-Benefit Analysis 3 Select pilot transport system for focus Pilot transport system with clear justification for selection 4 Rally payment service providers to agree suitable payment system(s) for transport system Transport System payment solutions document

Payment System Vision 2020 MEDIUM TERM PLAN (10 MONTHS) MilestoneSpecific deliverables 1Implement a pilot schemeIncreased e-payment adoption in the selected transport scheme 2Ensure that payments for transportation on a selected mass transit system can be made electronically Analysis of percentage of journeys paid using electronic means before and after the pilot 3Publicise achievement with pilot scheme Publicity Plan 4Organise enlightenment campaign for transport system stakeholders, to replicate success of pilot Increased e-payment adoption in the transport sector 5Articulate bottle-necks and critical success factors Report 9

Payment System Vision RISKS AND DEPENDENCIES Dependency and Risk category Level of risk or dependency Rationale and approach to mitigate risk and dependency 1InfrastructureHighExplore different e-payment platforms and technologies to identify those suitable for the transport sector 2Legal and RegulationLowCBN Guidelines are sufficient. Also to consult relevant guidelines of the Federal Transport ministry 3Public AwarenessHighTransport sector is large. An articulate public awareness programme is required to run an effective public awareness programme. Services of advert/marketing agencies required. 4Resources – peopleHighA lot of Leg work is required. Advert/marketing companies would be involved. 5Resources – financeHighSubstantial funding is required to run an effective implementation 6 Viability/ProfitabilityHighService providers would not show interest in transport sector if the business is not commercially viable for them. A cost recovery analysis would be articulated to eliminate all doubts.

Payment System Vision 2020 RECENT DEVELOPMENTS  Fortis Mobile. –Fortis Mobile (of the licensed MPOs) is piloting mobile payment with ABC Transport, and is at the verge of signing agreement with FRSC for managing penalty payments with Mobile wallets.  LCC Toll payment –e-Tag cards (tap and go) have been introduced at the Lekki-Epe Expressway toll gates.  LTC Toll payment –e-Tag cards (tap and go) have been introduced at the Lekki-Ikoyi bridge. –Prospective Partner Organisations: e-RG, EFiNA, FortisMobile, Banks,NIBSS.  LAMATA. –The Lagos State transport company, LAMATA, has been piloting e-ticketing since 2011 and rolled out operations in early The technology is based on NFC contactless (tap and go) card payments, with NFC readers installed in buses. –LAMATA has provided incentives by making e-ticketing cheaper for transport payment than cash. 11

Payment System Vision 2020 LAMATA 12

Payment System Vision 2020 Questions and Discussion 13