Multi Transaction Card – A Way Forward As Nigeria Journeys To Cashless Economy

A number of merchants in the country provide electronic payment solutions that can only be used on their platform alone (one transaction pin based cards). Bodies like NECO, WAEC, JAMB and most universities all have their electronic payment scratch cards that can only be used to register for exams, check results and for school fees payment. This means that an average student will have to buy at least a scratch card each for each case. Power Holding Company of Nigeria (PHCN) also has card for power bill payments.

Like all one transaction cards the PHCN chip card can only be used to pay for electricity bill alone. Using different cards for each transaction will still not make sense. This means Nigerians we have to carrying many different cards. This makes it pertinent for multi transaction cards to be promoted and deployed. We should be able to use a multi transaction card like Visa, InterSwitch, Cashcard, or MasterCard for registering for school fee, PHCN bill payment, Hospital bill payment, and NECO, WAEC and JAMB registration. This same card should be accepted at point-of-sale (POS) as this is important to transform the nation into cashless economy.

A point-of-sale (POS) terminal is a computerized replacement for a cash register which merchants use to take customer payments by credit card. Debit payments are collected immediately in a store that uses a POS system to run the payment. The terminals that are used in POS systems are typically connected directly to a bank that can credit the user’s account and show payment on the merchant’s books. A financial tracking system is connected to POS terminals through systems that process credit and debit card payments.

CBN should create a PoS division which will act in the capacity as card acquirer at merchant locations thereby reducing the cost of interoperability of PoS at merchant locations. As at present, it is difficult using all the card schemes at single PoS of a merchant location. The PoS acquirer (a bank in this case) must collaborate with other card acquirers or the bank acquires more (that one card scheme) like the case of present ATM card that we can use anywhere. PoS terminals can be routed through the infrastructure of National Central Switch (NCS). Central Bank of Nigeria had given directive to all banks and switching companies to connect to the NCS by December 31, 2010. This will solve the problem of banks signing multiple agreements with the switching companies as NCS will be positioned to play its role as interoperability hub of the e-payment system in the country. Switching companies, card processors, banks and Central Bank of Nigeria have to work together on commercial agreements required for parties concerned in the electronic transaction so as to determine sharing, distribution and settlement of transactions charges.