Remita Presentation to 2012 IT Professionals’ Assembly

“Cashless Transactions: Platforms, Challenges & Opportunities” Demola Igbalajobi Group Head, Remita Services SystemSpecs Nigeria Limited

3 Presentation to 2012 IT Professionals’ Assembly  Common payment channels/ platforms  Challenges to Cashless transactions in Nigeria  Case Study – Treasury Single Account  Brief Introduction to the Remita Platform  Opportunities for Cashless transactions in Nigeria  Summary Presentation Outline

4 Presentation to 2012 IT Professionals’ Assembly  Internet Based  ePayment portals e.g. Remita  Credit/ Debit Cards for online purchases  Payment accounts e.g. PayPal  Online transfers between bank accounts  Point of Sale (POS)  Credit/ Debit Cards at card terminals  Mobile payments Some common channels/ platforms

5 Presentation to 2012 IT Professionals’ Assembly  Fear of loss of power base – control  Resistance to blocking loopholes for ‘sharp’ practices  Infrastructure challenges  Admissibility of electronic payments as court evidence  Lack of understanding of the concept by the public  Inherent distrust of ‘computers’ by users  Lack of innovation on the part of service providers  Delays in settlement of interbank transactions  Absence of a legal framework for ePayment Challenges to Cashless Transactions in Nigeria

6 Presentation to 2012 IT Professionals’ Assembly  Probably the biggest obstacle, especially in the public sector  The question of ‘Who now does what’?  Loss of patronage and importance/ relevance  Feeling of being under scrutiny Fear of loss of power base - control

7 Presentation to 2012 IT Professionals’ Assembly  Stops indiscriminate diversion of funds  Money can be easily traced to accounts  ‘Too fast’ for some banks as it reduces floats  Banks cannot keep money for days as ‘float’  Highlights delays in settlement of interbank transactions  ePayment removes dependency on any single bank  I should be able to pay/ receive money from any bank  Some banks have come to depend on ‘key’ accounts  Beneficiaries not forced to use a particular bank  Should encourage more competition Resistance to Blocking loopholes

8 Presentation to 2012 IT Professionals’ Assembly  What is required for most electronic payments?  Internet connection; PC; mobile phone  How many people actually take part in ePayment processing in an organisation and need these tools?  What is the frequency of payment transactions?  Compare the cost to a single budget line  Availability of many low cost options Infrastructure Challenges – how real?

9 Presentation to 2012 IT Professionals’ Assembly  Might not be on the statute books. However  Investigative bodies – EFCC, ICPC etc use it to build their case  Often leads to other physical evidence e.g. property  Depends on the weight of evidence Admissibility of electronic payments evidence

10 Presentation to 2012 IT Professionals’ Assembly  TSA is a unified structure of government bank accounts - a single account or a set of linked accounts for all government transactions, that gives a consolidated view of government cash resources; based on the principle of unity of cash and unity of treasury  Government currently has a fragmented banking arrangement - over 10, 000 bank accounts in multiple banks.  Over N70 billion government funds was lost in failed commercial banks (Source: OAGF, March 2012) Case Study - Treasury Single Account (TSA)

11 Presentation to 2012 IT Professionals’ Assembly  Main Objective is to help Government unify banking arrangements in order to have overall oversight of all cash flows.  Means of promoting efficiency, transparency and accountability in Government payments  Achieve End-to-End electronic processing of Government payments in line with the National Payment System (NPS) Vision 2020 objectives. Objectives of Treasury Single Account (TSA)

12 Presentation to 2012 IT Professionals’ Assembly  Government does not always know the balance of funds held in the commercial banks, across all MDAs  Government still goes to borrow money when it has money in commercial banks and other accounts in CBN.  The TSA will ensure that Government has access to funds when needed and would only borrow if there is no fund in the consolidated account Why the Need for TSA?

13 Presentation to 2012 IT Professionals’ Assembly  The existing Consolidated Revenue Fund (CRF) is now the TSA for Federal Government and will continue to be maintained at CBN  Most MDA funds will be domiciled in CBN, reducing CBN’s huge cost of liquidity management for Open Market Operations (OMO)  MDAs will have access to cash as and when they need it  There will be little idle cash balances of MDAs at both CBN and Commercial Banks How Does TSA Work?

14 Presentation to 2012 IT Professionals’ Assembly  MDAs initiate and approve transactions from their offices against their approved budgets using a Financial Management System (GIFMIS) that integrates with CBN ePayment Platform to automate and streamline payments across all MDAs  MDA payment instructions are sent to CBN to provide the cash for consummation  CBN has adopted Remita as its ePayment platform for effecting payment instructions from MDAs to beneficiary accounts in Commercial Banks, Micro Finance Banks and Mortgage Banks  The use of paper mandates at CBN for CRF transactions has ceased  OAGF has effected all payments from CRF through Remita  Transactions totaling Over 150 Billion Naira a month is passing through the CBN Remita platform TSA Implementation

15 Presentation to 2012 IT Professionals’ Assembly What is Remita? Remita is a comprehensive ONE-STOP e-Payment, e-Collection and Payroll Solution. Extremely robust and yet so easy to use, Remita is designed to be used by any public or private sector organization irrespective of Size, Structure or Specific requirements.

16 Presentation to 2012 IT Professionals’ Assembly  View balance in all your accounts across all banks on just one screen  Handle e-payment of all types - salaries, pensions, taxes, suppliers/contractors, individuals, etc.  Make payments to beneficiaries in any Microfinance, Mortgage or Commercial Bank  Instantly notify payment beneficiaries by SMS and  Monitor and report on any activity or payment ever made and on the platform  Operate all your bank accounts from just one place right from the comfort of your home, office or anywhere you may be in the world With Remita e-Payment you can:

17 Presentation to 2012 IT Professionals’ Assembly Handle all collection types-fixed or variable amounts or regular or irregular intervals Automatically debit accounts held in any bank in Nigeria Collect cash from customers through any bank branch View consolidated collection activities from all banks on a single screen Pre-notify customers 3 days before actual debit With Remita e-Collection you can:

18 Presentation to 2012 IT Professionals’ Assembly 18 With Remita Payroll, within minutes You can:  Compute all staff allowances, loans, pensions, taxes and other deductions.  Use Biometrics to identify your staff and pensioners  Pay staff and pensioners with accounts in any Microfinance, Mortgage and commercial banks  Automatically deliver electronic schedules to PFAs, PFCs, Cooperatives, Unions and other statutory agencies  Provide staff with pay slips and tax computation slips  View unlimited Payroll, Pension & Biometrics Reports

19 Presentation to 2012 IT Professionals’ Assembly  Millions of ‘unbanked’ waiting to be tapped into  Many organisations, including many public bodies still untapped  Seamless integration between platforms, products and solutions  Go International! Opportunities for Cashless Transactions

20 Presentation to 2012 IT Professionals’ Assembly  Is it really possible to have a ‘cashless society’?  Do we really want a cashless society?  Emergency purchases?  There is a comfort in having cash in my pocket  Getting cash discounts  Culture But ….

21 Presentation to 2012 IT Professionals’ Assembly  Cashless transactions is a reality that has come to stay  There are a number of platforms open to users  The challenges are surmountable – technical & human  Opportunities still abound  How far can we take it? Summary

Presentation to 2012 IT Professionals’ Assembly Thank You