In a pivotal move set to transform Nigeria’s financial landscape, the Nigerian Inter-Bank Settlement System (NIBSS) has announced a strategic partnership with Zone, a payments-regulated blockchain network, to enhance Point of Sales transactions (PoS) in the country.
This collaboration aims to bring unprecedented security, efficiency, and transparency to Nigeria’s rapidly growing PoS system, which also comes in the Central Bank of Nigeria (CBN) requirements for financial services providers to route their PoS transactions through a Payment Terminal Service Aggregator (PTSA).
One of the primary goals of this partnership is to leverage blockchain’s decentralized technology to bolster the security of PoS transactions. By recording transactions on a blockchain, the risk of tampering or fraudulent activities is significantly reduced. This move is expected to address the persistent issues of fraud and chargebacks that have plagued Nigeria’s PoS system, instilling greater confidence in both consumers and merchants.
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According to the Fraud and Forgeries Report in Nigerian Banks for the first quarter (Q1) of 2024 by the Financial Institutions Training Centre (FITC), POS fraud cases surged by 31.12% in Q1 2024.
Speaking on the partnership, the managing director and CEO of NIBSS, Mr. Premier Oiwoh said the collaboration with Zone represents a significant milestone in the firm’s mission to drive innovation and enhance the efficiency of the PoS payment system. He further added that this strategic partnership will bring about improved operational efficiency, cost savings, and enhanced financial inclusion, ultimately positioning Nigeria at the forefront of the global payment space.
Also commenting, CEO and Co-founder of Zone, Obi Emetarom said,
“This partnership with NIBSS reflects our unwavering commitment to transform the payment landscape in Nigeria. By harnessing the power of blockchain technology, we are setting a new standard for reliable, frictionless, and universally interoperable payments in the industry.”
It is worth noting that the Nigeria Inter-Bank Settlement System (NIBSS), manages the interconnectivity of all payment terminals across the country, ensuring that devices are brand-agnostic and can accept cards issued by any Dank or licensed card scheme. Additionally, NIBSS standardizes the technical and operational specifications for these terminals and implements a risk management process to handle any potential issues related to contactless payments.
Notably, the recent collaboration with Zone, a blockchain payment-regulated platform, will play a crucial role in improving the efficiency of PoS transactions and protecting users’ sensitive transaction data, adding an extra layer of security, which is pertinent in a world where digital transactions are becoming increasingly prevalent.
Also, blockchain’s transparent nature is set to enhance the trustworthiness of PoS transactions. It is understood that every transaction recorded on the blockchain is visible and verifiable by all parties involved, making it easier to audit and ensuring that records are accurate and consistent. This transparency is expected to build trust among stakeholders, from banks and merchants to consumers.
Moving forward, regulatory compliance will also be a key focus of this partnership, as Blockchain can automatically enforce compliance through smart contracts which will ensure that PoS transactions adhere to Nigerian financial regulations, including Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. This proactive approach to compliance will reduce the risk of regulatory breaches and associated penalties.
The collaboration between the Nigerian Inter-Bank System and the Nigeria Blockchain Network Zone marks a significant step forward in the evolution of Nigeria’s PoS infrastructure. As the initiative progresses, it is poised to set new standards for digital payments in Nigeria, driving the country’s financial sector toward greater innovation and global competitiveness.