The Need To Harmonise All Bank Accounts Into A Single Debit Card In Nigeria

The introduction of the Automated Teller Machine (ATM) with the accompanying ATM Cards into the Nigerian banking industry has boosted service delivery by the banks and also brought about ease of access to customers’ account(s) domiciled in the different banks. Cash debits, deposits, transfers and Person to Person (P2P) lending are now transacted within a very short time unlike before.

The first ever ATM to be introduced into Nigerian banking industry was “Cash Point 24” by the now defunct Societe Generale Bank of Nigeria in 1990. This was later followed by “First Cash” introduced by the First Bank of Nigeria Limited in 1991. Today, there are over 12,000 (Twelve thousand ATMs in all bank branches across Nigeria. The boost that the introduction of the ATM has given to banking services is been unprecedented. With just the punch of a button, very important transactions are completed. This has also moved to the use of Point of Sale (POS) machines by business owners to enable ease of payment by their customers.

Added to that, the mobile/internet banking platforms also came in vogue. Transactions running into millions can be completed from the comfort of one’s home. The combined effect of these innovative banking services is that customers would not need to stand on long queues just to withdraw, deposit, transfer fund, buy airtime, subscribe for DSTV and other services or even request to know their account balance. Nigerians can still recall how hectic it used to be when the ATMs and other innovative banking service channels were not deployed by the banks. But the case is different today.

INTRODUCTION OF BANK VERIFICATION NUMBERS

This widespread acceptance of these FinTech services did not go without the activities of fraudsters using through these channels. However, to put these fraud activities on check, the Central Bank of Nigeria (CBN) on February 14, 2014 launched the Bank Verification Number (BVN) which a biometric capturing the vital data of all bank account users, as part of its overall strategy of ensuring effectiveness of the Know Your Customer (KYC) principles and the promotion of a safe, reliable and efficient payment system.

The BVN is a unique identification (ID) number which is issued to every bank customer upon enrolment and it is linked to every account the customer maintains in all banks in Nigeria. The bank customer’s information is stored in the Central Database which the Nigeria Inter-Bank Settlement System (NIBSS) is in charge of, thus enabling ease of identification of each bank customer.

According to the CBN Regulatory Framework for Bank Verification Number Operations and Watch-List, for the Nigerian Financial System, 2017 the key stakeholders in the operations of the BVN are the CBN, NIBSS, Deposit Money Banks (DMBs), Other Financial Institutions (OFIs) and Bank Customers. The overall consequence of this is that transactions initiated by a bank customer can be monitored from the Central Database and with that, acts amounting fraud on an account can easily be detected and escalated, and confirmed acts of fraud on a bank account would be flagged and placed on the Watch-List. The NIBSS maintains also an online Watch-List portal and provides an Application Programming Interface (API) to enable all banking institutions in Nigeria to integrate their systems to the BVN database for online validation of the Watch-List. The CBN, NIBSS, DMBs, and OFIs all have access to the BVN Central Database and the Watch-List.

A bank customer’s name on the BVN Central Database is the same in all accounts which the customer has in all other banks in Nigeria. The BVN operational process and procedure takes the form of: Enrolment ? Identification ? Verification and ? linking the customer’s unique ID to all related bank accounts in Nigeria. The customer’s unique ID generated after enrolment is used to link all his/her bank accounts, irrespective of which bank it is domiciled.

HARMONISATION OF ALL ACCOUNTS INTO A SINGLE ATM CARD

Flowing from the above, the questions which now beg for answers are:

1. Given the structure that has been put in place by the CBN in conjunction with all other stakeholders in the banking industry, what stops the CBN from ensuring that all bank customers’ accounts with different banks are integrated into a single ATM (debit) Card?

2. Why would I have to have 4 to 5 ATM Cards all because I maintain 4 to 5 bank accounts with different banks in Nigeria? Or even different bank accounts domiciled in the same bank?

I do not think this is an impossible thing to be done, since the system in place can make that possible. If an individual’s BVN ID can be linked to all his/her bank accounts with different banks and in the same name, I do not see the reason why such individual should be having several ATM Cards when a single ATM Card can solve that problem. This is the desired change that FinTech is introducing into the banking service which should be embraced by the banks. Harmonising all the bank accounts into a single ATM Card also has the added advantage of enabling better tracking of transactions that go on in the banks from the Central Database.

Technology is fast changing service delivery in all sectors in the world, including the banking industry and the Nigeria banking industry should not be drawing back at point in time.

I call on the Central Bank of Nigeria, as the regulatory body in the banking sector, to consider enabling the harmonisation of all bank accounts into a single ATM Card. This would not change the role of the issuers, because bank customers still preference for Visa Card or Master Card. Whichever card the individual wants, the card issuers’ services would still be needed.