In addition to the economic downturn and financial difficulties that dulled the festivities in 2023, slow digital payment channels have made the problems associated with Yuletide much more severe.
Many bank customers have been compelled to move to electronic channels in order to meet their transaction needs due to the nationwide cash constraint. Many Nigerians, however, who have rushed to e-payment channels from Lagos to other areas of the country, have expressed irritation with the frequent transaction failures amid several bank charges.
The Nigeria Interbank Payment System (NIP), point of sale (PoS) terminals, automated teller machines (ATMs), and unstructured supplementary service data (USSD) are among the problematic e-payment methods.
The Guardian's checks revealed that several ATMs around the nation were not able to dispense cash. ATMs have been essential to the success of the Central Bank of Nigeria's cashless policy since it was introduced in 2011.
When the policy was first implemented in 2011, there were 10,000 ATMs altogether spread among Nigerian banks. However, the number increased to 17,000 in 2015 and 18,000 in 2017, and as of December 2022, it was 22,500 across banks.
Despite the remarkable increase in ATM numbers from 10,000 in 2011 to 22,500 in December 2022, the number of bank clients and ATM wait times, particularly during the holiday season, indicate that the present ATM count may not be enough to support the CBN's cashless policy plan. However, banks have developed the bad habit of only depositing cash into three of the seven available ATMs, both on and off campus.
Approximately 2.32 million Point of Sales (PoS) terminals were registered as of the start of 2023, of which 1,824,428 were in operation. As evidenced in March and April of this year, under the administration of former CBN Governor Godwin Emefiele's cash withdrawal cap and naira redesign policy, point-of-service (PoS) operators have returned to extort clients by claiming they were unable to obtain cash from banks.
As a result, fees have gone up by around 80%. For example, a N50,000 withdrawal earns N1500 in urban areas and more in rural areas. While there are still issues with POS terminals and ATMs, the USSD platform proved difficult to use throughout the holiday season due to reports of unsuccessful transactions.
Several Nigerian users of the platform expressed dissatisfaction over being charged for transfers that did not reach their intended destination.Remember that the telecom operators, whose equipment is used for the transfer, are still owed N200 billion by the deposit money banks (DMBs). The platform-related dispute between DMBs and telecoms has persisted for almost four years, despite the fact that the debt incurred from platform usage has continued to rise. The telcos have threatened to disconnect the former if the issue is not resolved promptly and effectively.
This period's bank transfer apps did not assist either, reminding Nigerians of the year-earlier crises during which transactions occasionally failed.
The banks then asserted that they had settled roughly 60% of all unsuccessful transactions, leaving a substantial amount of money unresolved and taking advantage of their clients' finances.
During this time, users encountered significant delays when conducting transactions through bank apps, which made the problems associated with the holiday season worse.
For example, it was quite challenging to do any kind of transaction using the Access App for almost four days. The software was fully frozen, which frustrated users. It was an enormous undertaking to execute basic USSD transactions evenly because of the frequent failures. In spite of all of this, banks continue to charge their clients fees.
Gbenga Adekunle, a client from Oshodi, shared his experience with The Guardian, saying: "This holiday season, banking apps have been extremely slow and annoying. As it was, the banks were unable to provide us with money. The app issue is widespread because every bank is the same. It seems to be a widespread issue. When it will be resolved is unknown.
Chinedu Okonji, a different customer who is based in Surulere, Lagos, said that he twice used his mobile banking app to send money to a relative, both times having the transactions reversed.
Another consumer, Linus Okonta, has a problem with non-dispensing ATMs."You'll reach ATMs seven times in a row. But there will only be one money dispenser. How would you interpret that? That explains why ATM lines—long lines, mind you—are present. You are unsure if you will receive the money even after waiting in line. They are now commonplace occurrences.
The difficulties dispersed throughout the nation. Customers in other states experience it just as much as those in Lagos.For example, a number of Ogun locals have urged banks to act more professionally, particularly when it comes to customer service.
describing her encounter, based on Abeokuta Working-class student Mary Adegbite stated: "I was stranded at Ayobo and had the worst ATM experience ever." The closest ATM stopped dispensing after I tried to withdraw money from it for more than thirty minutes. The machine told me it ran out of cash. I didn't even have enough money to go from one place to another, so I got stuck.
For the previous nine months, NIBSS has not released any information regarding the state of electronic payments in the nation. The volumes and values of electronic payment transactions increased from N37.6 trillion in February to N49.4 trillion by March of 2023, according to the most recent update, which was provided at the end of the first quarter.
By that time, data analysis revealed that the volume of PoS transactions increased from 113.53 million in February to 177.93 million in March, while the value increased from N883.4 billion to N1.152 trillion, signifying a roughly 30.41 percent increase.
In addition, the amount of NIBSS Electronic Fund Transfer (NEFT) transactions climbed from N1.73 trillion in February to N2.08 trillion in March, a 20.52 percent rise. In a same vein, the study stated that the value of NIBSS Instant Payment (NIP) transactions increased from N36.79 trillion to N48.33 trillion in March, a 31.37 percent increase.
Additionally, the data indicated that the volume of check transactions jumped from 333,952 in February to 426,926 in March, with values recorded at N283.4 billion in March compared to N238.4 billion in February.
From February to March, the volume of transactions made through mobile devices that the system recorded increased from 183,687.1 to 380,110.94. A month later, the value had increased from N2.56 trillion in February to N4.14 trillion.
Oluwasegun Elegbede, the recently elected General Secretary of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), commented to The Guardian about the acts of PoS operators and argued that members shouldn't be held accountable because it wasn't their fault.
Elegbede stated that the CBN cash withdrawal limit is still in effect and that banks will distribute prorated amounts, citing their contention that the amount they receive from the Apex bank is insufficient for everyone.
"Cash is our stock in trade as agents. The amount that will be charged will depend on how far an agent goes to obtain money, as well as the expenses involved in the process. In order for you to get your money back, we also have to pass the cost back to the client. It's not that somebody wants to overcharge in order to take advantage of the procedure; the reality is that everything needs to work out for everyone. He said, "The agents aren't meant to lose their earnings either.
The group is striving to assure a comprehensive appraisal of all agents under the umbrella to weed out those dishonest ones, ruining the association's reputation, according to Elegbede, the former national public relations officer of AMMBAN. By 2024, each member will have a unique identify. We'll be searching for methods to raise money to support members' enterprises, which will benefit the general public.
Expert in telecoms and technology Kehinde Aluko stated that there is significant strain on banks' IT infrastructure about the issues plaguing the banking industry.
Aluko stated, "The capacity of the banks' technology is the main issue they are facing. The sheer number of transactions overwhelms the majority of them. Regretfully, the systems aren't always operational. When the systems are overloaded with data, these network issues are fairly common.
"It's possible that certain banks have too many transactions on their systems; if not, these kinds of transactions need to recur. However, they are not required to visit a bank's income account if they don't. Somewhere has to hold the money. Following that, banks are able to reconcile and credit the impacted client. The ideal scenario, though, would have been for the transaction to fail and return to the owner's account.
Aluko asked the DMBs to strengthen their systems, stating that although banking operations in the twenty-first century should be quick and easy, "the banking public is not served adequately well lately."
Aluko stated, "They rescued Nigerians earlier in the year and they did the same later in the year," while applauding the efforts of the Fintech companies. Without Fintechs, the public would have been overwhelmed by the crisis.
However, he asserted that "the Fintechs still have issues! It's not like their operations are 100% seamless!" Users must be cautious about security because some of them are extremely porous in order to avoid becoming victims of fraudsters.