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Wednesday, May 06, 2009

Confusion trails e-payment directive


Confusion now trails the recent directive by the Accountant Generation (AG) of the Federation over the introduction of electronic payment (e-payment) system in the nation’s public sector.

ITRealms Online gathered at the weekend that some Ministries, Departments and Agencies (MDAs) may have misunderstood the directive of total end-to-end electronic payment system to the temporary solution, which is a mixture of partly electronic and partly manual, otherwise, tagged e-manual among stakeholders.

According to our sources, most of the MDAs instead of routing for the real thing, which is the end-to-end electronic payment, they assumed that the temporary solution, christened ‘e-manual,’ was in the actual sense what e-payment is all about.

ITRealms Online recalls that in the fourth quarter of 2008, the Federal Government (FG) had declared war against all cash and cheque payments with the mandate to commence e-payment from January 1, 2009, in all transactions in the public sector across all the MDAs.

Electronic payment is defined as the “ability to pay your suppliers, contractors, vendors and even staff electronically at the touch of a button and affords electronic users to send all payments’ instructions electronically and receive the feed backs electronically.”

As said by the Accountant-General of Federation, Mr. Ibrahim Dankwanmbo, during a recent seminar in Abuja, payments would from January 1, 2009, be conducted electronically to the beneficiary’s account and not with cash or cheque instruments.
This, he said, is part of strategies to enthrone a cashless public service and discourage corruption, while boosting accountability and transparency.

Lamenting the amount of confusion that has pervaded the nation’s public sector in the wake of the electronic payment regime, renowned e-payment expert and chief executive of Nigeria’s leading software-based solution provider, Systemspecs Limited, Mr. John Ubaro, warned that if this chaos is not immediately checked, the nation may be heading deep into backwardness.

He attributed the confusion to the avalanche of current payment systems in the country, top of which is the issuing of cheques and manually delivering the schedules to the likes of Pension Fund Administrators (PFA), cooperatives societies, National Housing Fund (NHF), National Health Insurance Scheme (NHIS), trade unions, and banks to mention but a few.

He noted that multiple payment portals with wrong impression about e-payment from banks, which often constrain customers to one bank, have not been helpful in understanding what constitutes true e-payment.

Ubaro explained that what it entails is that there is an automated end-to-end electronic payment, which could be initiated from an office, thereby reducing work and not increase it, leading to a pleasant experience.

According to him, e-payment does not mean what is obtained in most of the MDAs, including manual delivery of payment instructions to banks through Compact Diskettes (CDs), flash drives or even email attachment.

Maintaining that once a customer hops from one bank’s internet site to another, it is no longer e-payment, just as he decried the attitude of restricting customers to one bank or even making payments on one platform, and submitting schedules on another. This, he said, negates the notion of e-payment.

“Once a customer surfaces at a bank branch, it is no longer e-payment,” Ubaro insisted.

To surmount these challenges, he said, that SystemSpecs, for instance, three years introduced Remita, one of its web-based versatile electronic payment solutions, which affords customers either individual or corporate to pay or receive salaries or payments directly in their accounts and issue e-cheques to any person or contractors.

“All from the comfort of your home or office, as long as there is Internet linked Personal Computer (PC),” he asserted, outlining the relevant parties in e-payment sphere to include the end users, which cut across MDAs, corporate entities and individuals, then application service providers, switches and settlement houses, banks and finally the regulators.

He advised the government to ensure that the internal processes were got right for enthronement of real end-to-end e-payment structure. He also urged those who want to remain manual to be manual instead of the half-baked e-manual, which is at the root of the e-payment confusion presently.

Also speaking, a member of the Central Bank of Nigeria (CBN) Think Tank on e-payment, Dr. Hakeem Bakare, told ITRealms Online that the nation has even shifted its attainment date earlier than scheduled, that is, instead of 2011, it would now be before the of this year, 2009 based on the FG’s latest mandate on e-payment.

The committee made up of stakeholders drawn from both financial and banking institutions, he said, has been having regular interactions with the CBN officials and strongly believes in end-to-end e-payment solution for the country.

“And it is the ultimate for Nigeria,” he declared, criticizing some MDAs for thinking that e-manual, which is a temporary measure pending when they would migrate holistically to pure end-to-end remedy to have overtaken the actual e-payment.

“It is a misconception of AG – Accountant General’s – directive,” he said and called for caution, noting that a situation whereby every Dick and Harry now carry one solution or another claiming to be offering electronic payment to the MDAs, which eventually leaves them with half manual and half electronic activities is not the best for the country.



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