CBN Orders Banks to Stop SMS Charges on Bulk Transfers.

The Central Bank of Nigeria, CBN, has directed Deposit Money Banks in the country to stop Short Message Service (SMS) charges on bulk bank transfers done through the Real Time Gross Settlement (RTGS).

The banks were previously charging N4 per transaction or text message fee on all bulk transfers but were directed by the apex bank to halt such fees in the interest of customers.

The RTGS is an interbank funds transfer system on “real-time” basis and “gross”. Settlement in the
“real time” means that the transaction takes place almost immediately.

The CBN’s directive has further cut banks’ multiple revenue streams that form a major part of the
huge profits they declared in recent years.

A Customer Service Officer in one of the Tier-1 banks told The Nation that most salary accounts that are funded through bulk transfers are no longer getting transaction alerts because the fee cannot be absorbed by customers or charged on their accounts. The source said banks were complying with the CBN directive while customers under such arrangements are expected to use bank-specific digital codes to check their account balances as they can no longer get bulk-transfers related transaction alerts.

The Nigerian Communications Commission (NCC) had directed that any person subscribing to any of the Nigerian GSM networks must not be charged more than N4 for SMS, sent to other networks. The NCC set a price cap of N4 per message for all domestic Off-Net Messaging Service in line with Sections 4 and Chapter V11 of the Nigerian Communications Act (NCA), 2003. “Banks, Payment Service Providers (PSPs), Financial Authorities and Central Banks play various roles in developing the payments system infrastructure to drive electronic payments, that is nationally utilized. The e— payments industry refers to all stakeholders, operators, regulators, infrastructures, merchants, retailers and the final consumers of the payments products and services. Payment technologies and platforms bind the industry together in a tight ecosystem.

Fatokun disclosed that global non-cash (electronic payment) transaction volumes grew at 8.9 percent
to reach $387.3 billion in 2014, an increase, driven by accelerated growth in developing markets.

“Cards have been the fastest growing payments instrument since 2010, as cheque use has declined
consistently and significantly. Debit cards accounted for the highest share (45.7 percent) of global e-payment transactions and were also the fastest growing (12.8 percent) payments instrument in 2014,” he said.

According to him, global non-cash volumes are estimated to have grown by 10.1 percent to reach $426.3 billion in 2015, aided by high growth in emerging economies across the world, including Africa even as the Nigerian e-payments industry has been evolving in line with the evolution in global payments in both Wholesale and Retail systems.

He said the volume and value of transactions based on cheques and National Electronic Funds Transfer
(NEFT) have been consistently reducing yearly since 2013, while same data for the Nigeria Interbank Settlement System- NIBSS Instant Payment (NIP), Automated Teller Machine (ATM), and mobile money channels have been on the increase. This is an indication of users’ preference for instant value channels over non-instant payment channels.

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