On the other hand, governments’ need for cost reduction and GDP growth as well as the desire to be more transparent are expected to lead to more joint ventures between card technology industry players and public sector organizations.
It is understandable that governments of some countries are afraid that the introduction of e-cash (through smart cards) could portend a risk of money laundering since the transfer of payment value is now in the form of digital information.
The fear notwithstanding, it is imperative that governments get involved from the outset and act as catalyst by introducing efficient market-driven mechanisms to promote accelerated diffusion of e-cash (and by implication e-commerce) into the national economy.
Examples abound of countries which have adopted the initiative for the good of their people. In Australia and the Czech/Slovak Republic, the government has taken the initiatives in experimenting with the use of smart cards in the medical system, educational application, transportation cards and so on.
In Korea, Hong Kong and Singapore, the government has taken many initiatives to support the development of e-cash schemes to open up new challenges, which are believed to increase consumer response to the e-cash as a revolutionary means of payment transmission.
In Russia, Visa, one of the global card technology companies, partnered with the Moscow City Government to develop a multi-application card, which provides a variety of services such as pension payments, access to medical insurance and government subsidies, and public transit. Other governments in various countries of the world are gradually buying into the e-cash culture and are weaning out cash-based forms of transactions in favour of e-payments. Africa ought not to be left behind.
To achieve a cashless society is a task that must be done, and eTranzact, a multi-channel payment mechanism, conceptualized and driven by a Nigerian, Valentine Obi, is already providing the leadership role that should usher the continent into that era of cashlessness. The journey has just begun with a number of initiatives and more are still expected to be done to achieve the desired result.
At a recent Banking Technology Conference held in Lagos tagged “Competing in a borderless world”, the chief executive officer of eTranzact, Valentine Obi, in a paper titled “Creating a financial ecosystem across African borders”, traced the genesis of business models for payment in African countries by dividing the transaction phases into three, which basically reflected the past, the present and the future.
Obi traced the era of traditional business model for payment, which he describes as predominantly cash dependent with very little alternatives to effective ways of trading amongst individuals, organizations and countries. He observes that this model was responsible for the slow growth of trading relations amongst Africans within and outside the various parts of the continent, as Africa lacked what it takes to embrace the then emerging technologies in the payment industry. The traditional payment model was the “Brick and Mortar” system, which was the same as expansion of bank branch networks necessitated by compulsory appearance of customers in the banks to consummate transactions. This system was riddled with a number of challenges, chief among which were insecurity, inconvenience, high cost of transaction, inability to access real-time information, cumbersomeness and high business risks.
The search for a more robust system of business transaction led to the present where innovation rules, leading to tremendous transformation occasioned largely by technological advancements, a more sophisticated customer base and high rate of global economic growth. The effort to reposition Nigeria, and by implication Africa, has been a conscientious one, and eTranzact has been at the forefront of the e-payment revolution bridging the gaps among countries in the continent and beyond.
eTranzact identified the growing need by consumers to have a single applications platform that provides access to multiple accounts – ATM/cash cards, electronic transfer of funds (ETF), point-of-sale (POS) as well as debit/credit cards.
eTranzact’s applications are home-grown, and are being exported to neighbouring West African countries and into other regions. eTranzact’s innovative applications have been successfully deployed in Zimbabwe, Ghana, Cote d’Ivoire, and the number is growing. eTranzact’s applications have also been deployed in Europe and the United States of America. For its leadership role and innovative products and services, eTranzact won the Computerworld Honors Award USA in 2003, and the Central Bank of Nigeria (CBN) Award for the Most Innovative Product of the Year 2007.
eTranzact understands that the business strategies to launch the new payment innovation have to be aligned with IT strategy, which requires collaboration among competing organizations so as to achieve a level of diffusion capable of generating a revolution.
In doing this, Obi believes that players would be able to focus on shared benefits rather than proprietary benefits. As the pioneer of e-payment technology in the country, eTranzact has constantly reiterated the need for collaboration in the industry because the market size of e-payment is too large for any innovator to capture by going it alone, Obi stated that with the CBN’s declaration that there is 80 percent cash outside the banking sector, and that less than 24 million out of a population of 140 million Nigerians are banked, there is a new challenge for the players in the e-payment sub-sector to reach the unbanked urgently.
Providing further explanation regarding the CBN’s declaration, Obi said factors responsible for the status quo are diverse. One, cash transactions are risky and the hitherto payment systems do not provide adequate security and comfort for users. Two, international payment systems are expensive and out of reach of most African people. Moreover, international payment systems are elitist and discriminatory, designed to suit the West.” To address the issue, Obi said eTranzact has been able to respond by providing a home-grown technology to suit the specific needs of the African people. eTranzact, by that token, has helped to remove inconveniences associated with the brick and mortar system with its provision of credible alternative integrated channels of payment using modern technology like the Internet and the mobile phone. As a result, customer can transact business in a risk-free mode not carrying cash, conveniently and over huge distances and boundaries. eTranzact has a total of 21 banks on its platform while intensifying efforts to connect the remaining four banks as soon as possible.
eTranzact’s services, according to Obi, are bridging gaps across different interfaces and the impact has been tremendous. “eTranzact offers services for the banked and unbanked; for payoutlets; for corporate organizations (CorporatePAY) which make large volumes of transactions; for merchants (eREMIT) who need to make local and international remittances. These services are cost-effective, convenient, secure and they offer credible alternatives to the traditional model.”
A number of significant domestic applications have aided basic transactions within countries. These applications include: bill payment where payments could be made from cell phone to cell phone (P2P), from cell phone to business/merchant (P2B) especially for the payment of utility bills, school fees, taxes, parking, cable TV, to name a few, and from business to cell phone (B2P) whereby salaries, grants and allowances are paid to both banked and un-banked workers.
Another application on the eTranzact platform is automated teller machine/point of sale (ATM/POS) transactions, which enables the use of a single card in many countries. With the secure mobile banking, it is possible to check account balance, get mini statement, make funds transfer to any bank account, mobile phone or card.
There is equally mobile top-up, which enables one to recharge one’s mobile phone and top-up family and friends’ phone as well. To this end, customers now enjoy convenience, safety and lower transaction costs when they connect to the eTranzact network. eTranzact, in facilitating choice, trade across borders, convenience and security, is helping to prove that technology is vital at helping to put Africa on the same pedestal with the developed nations.
•Awelewa is a staff of XLR8, a communications consulting group based in Lagos.ITREALMS Online ... delivering news for ICT4D
