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Payment Cards’ Restriction Hurting Banks, Customers –Adeyinka

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Digital Start Ups - Investors King
  • Payment Cards’ Restriction Hurting Banks, Customers

The Chairman, Committee of e-Banking Industry Heads and Chief Digital Officer of Wema Bank Plc, Mr. Dele Adeyinka, talks about developments in the e-banking space and the need to increase the adoption of e-payment and alternate channels.

CAN you give an overview of the growth in the e-banking space over the years?

The Cashless Nigeria initiative started about four years ago. We are in 2016 and are still counting the dividends of that initiative; we are still working to grow the numbers. But if we want to appraise ourselves, we can say with a sense of responsibility that we are on the right track. The volume of cash in the economy is still on the very high side. But we can also say that between 2012 and now, the adoption of the e-channels and alternate payment options has grown significantly. Point of Sale adoption has also grown between then and now; card issuance and the adoption of all the card schemes that we drive in the country have also grown significantly. The usage of cheque has drastically reduced. The adoption of alternate e-payment platforms has grown tremendously.

The NIBSS Instant Payment and NEFT as alternate options to doing funds transfer (rather than cheque) have also grown significantly. And If you compare what we had in 2012 and 2106, we have seen some tremendous growth. I have some statistics that I can share. As of the end of 2015, the circulation of cheques in the industry had been reduced to about 2.8 per cent from eight per cent that it used to be , compared to all options of payment. Growth in cash adoption has grown by 15 per cent. Electronic funds transfer and alternate funds transfer channels (NIP, NEFT, AUTOPAY etc), on the general note in the industry, have recorded eight per cent adoption as compared to four per cent adoption that it used to be in 2012.

The deployment of the PoS terminals has also grown seriously. We have a whole of merchant locations, where the use of the PoS terminal has become so prevalent as an alternate point of payment rather than using cash. Of course the deployment of the ATMs in the industry has also grown tremendously. I will say we are on the right track even though we still have a lot to do; stakeholders and different players still have a lot to do. But we have done fairly well and we will continue on that path, encouraging our consumers and stakeholders to adopt these alternative channels of e-payment.

Commercial banks recently stopped their customers from making cash withdrawals (foreign currencies) from Automated Teller Machines abroad using the debit naira MasterCard. This has affected e-payments, especially transactions involving foreign exchange. Will banks reverse this decision soon?

My take on this is that it is a national challenge. It is a hurdle that we all need to clear together. Yes, currently, it is affecting the card space but we all know it is not only the card space. It affects virtually all sectors of the economy. If you go to supermarkets today, you will notice that it is not the type of products that they used to have one or two years ago that they have there now. This is because they are finding it difficult to source for the FX to bring in these products. If the leadership of the country is advising us to look inwards rather than look outside, it is just natural that all of us including those in this sector aligns our visions, thoughts and actions to this national directive; that as a nation, we must look inwards. The decision regarding this in our sector was taken at some meetings. It was not as if it is generally outlawed to use our cards abroad. It was just to say there has to be a limit to the funds our customers and consumers can use outside the country; it tells heavily on our external reserves as a nation because settlement must be done. Today, reports say we have one of the lowest FX reserves in the last decade as a country. And of course, we all know the beginning of this: The price per barrel in the global oil market went downwards, and again some of the countries that used to patronise our crude oil stopped doing that. All of these have affected our FX reserves. For cards, we also considered that if we allow our customers to continue to go outside the country to use these cards, it will naturally get to a state that will further reduce our FX position as a country.

This is because those other countries will need to be settled and they will not be settled in our national currency; they will be settled in foreign currencies (dollars or pounds). Of course, if anything is going to affect our country, it is in our interest as a country to put a hold on it. We are not stopping it outright, we are only saying let us put a limit to the number of what our consumers can use for transactions outside the country. So it is a temporary restrictive measure. It is hurting not just the consumers, it is hurting the practitioners – all of us, but it is a temporary pain we all have to bear now in the interest of our nation. Once we cross this hurdle, and have enough FX reserves to be able to settle our bills, the cards will continue to work.

Are you saying in the meantime, the customers should forget increase in the amount they can spend overseas?

I know that the President, Vice-President, the National Assembly and all of the leadership in the country are working round the clock to resolve this issue. I read in the newspapers how the President himself said he was looking for alternative options, seeking the NASS approval to get some loans to bring in some forex into this country. All the arms of government are working to ensure that we clear this hurdle. But am I going to advise and encourage that we continue to create more problems rather solving existing ones? No, my take will be for us to be solution-providers; and not adding to the problems of the nation. We need to align all of our products and offerings to solving the problems. It is just a temporary pain. Once we clear this hurdle jointly as a nation, it will be obvious to all. We can then increase the limit that our customers can use their cards to spend abroad.

As the CeBIH chairman, what are your visions for this industry?

There is a tag line that we have in CeBIH, it says we want to drive excellence and dynamism through collaboration. My major role and that of other members of the executive committee as we immediately took the leadership of CeBIH is to emphasise that aspect of our tag line that resonates collaboration. We want to use collaboration to achieve much more than ever before. As individual or member banks, we can achieve a lot but as an association or committee, we will achieve much more, if we collaborate. So we are bringing all players and stakeholders together, and we are using that force of collaboration to help us achieve much more. We are going round, and we are involving all stakeholders in what we do. By the way, on a monthly basis, we hold our meetings and we engage all stakeholders within the month. As much as possible, we ensure that all the gaps that we have identified are properly filled. We encourage ourselves to leverage our collective strength to see how we can achieve the Payment System Vision 2020 together. And ultimately, it will affect our businesses, our banks and consumers positively; because ultimately, they will be the beneficiaries.

This is because once our consumers adopt the usage of e-payment and alternate platforms, the business will grow and our individual banks will benefit from it; the revenue lines will increase; the industry and the nation as a whole will benefit.

Can you tell us more about CeBIH?

CeBIH means the Committee of e-Banking Industry Heads in Nigeria. It comprises of practitioners in all of the Deposit Money Banks in the industry.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Crude Oil

Oil Slips With Energy Prices in Europe Halts Record Rally

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Crude Oil - Investors King

Oil dipped toward $72 a barrel in New York after prices of energy commodities in Europe halted a record-breaking run.

West Texas Intermediate futures fell 0.6%, having reached the highest intraday level since early August on Wednesday. A rally in European gas and power prices to unprecedented levels was set to end as industries were starting to curb consumption. The surge in energy rates could temporarily boost diesel demand by as much as 2 million barrels a day as consumers switch fuels, according to Citigroup Inc.

Still, the bullish signals for oil are continuing to increase. U.S. crude inventories dropped by more than 6 million barrels last week to a two-year low, according to government figures, as coronavirus vaccination programs permit economies to reopen. Chevron Corp. Chief Executive Officer Mike Wirth warned that the world is facing high energy prices for the foreseeable future.

The investor optimism is showing up in key oil time spreads widening. Trading of bullish Brent options also surged to a two-month high on Wednesday.

Prices have been pushed higher in recent days “by supply outages combined with expectations of switching from gas to oil in the power sector,” said Helge Andre Martinsen, a senior oil market analyst at DNB Bank ASA. “We still believe in softer prices toward year-end and early next year as curtailed production returns and OPEC+ continues to increase production.”

Strong prices for gas, liquefied natural gas and oil are expected to last “for a while” as producers resist the urge to drill again, Chevron’s Wirth told Bloomberg News. Norway’s Equinor ASA said Thursday it also expects European gas prices to remain high over winter.

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Energy

Fuel Scarcity: Petrol Sells N220 Per Litre in Nsukka

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petrol scarcity Nigeria

Premium Motor Spirit, otherwise called petrol, now sells for between N200 and N220 per liter at the independent marketers’ service stations in Nsukka, Enugu State.

The News Agency of Nigeria is reporting the hike in the price against the official pump price of N162 per liter.

It said it started about a fortnight ago due to the scarcity of the commodity in the town and its environs.

Some residents of the town expressed deep worry over the development in separate interviews with NAN on Wednesday.

A civil servant, Stephen Ozioko, said the situation had further compounded the economic difficulties in the area.

Ozioko said many private car owners had been compelled to park their vehicles at home and move around in public transport.

He said: “Since the scarcity started, I decided to park my car and take public transport to the office and back home. N220 per liter is exorbitant and I cannot afford it considering my salary as a civil servant. I shall continue to use public transport until the situation returns to normal.”

A building material dealer, Timothy Ngwu, said the development had also led to an increase in transport fare in the area.

Ngwu said: “Some people now trek from Nsukka Old Park to Odenigbo Roundabout because of the 100 percent hike in fares from N50 to N100 by tricycle.

“Before now, transport fare from Nsukka to Enugu was N500, but transporters now charge between N800 and N1000.”

Also, a commuter bus driver, Victor Ogbonna, described the scarcity and hike in the price of petrol as “unfortunate and an ugly development”.

Ogbonna added: “Today, only a few filling stations are selling the commodity in Nsukka town, while others are shut.”

He alleged that some filling stations, which claimed to be out-of-stock, were selling to black marketers at night.

He said: “This is why black marketers have sprung up everywhere in the town, selling the commodity for about N300 per liter.”

NAN reports that virtually all the major marketers in the area have stopped the sale of petrol, claiming to be out-of-stock.

The people called on the government to urgently intervene in order to bring the situation under control and also put an end to its harsh economic effects on the messes.

NAN.

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Energy

DPR Targets N3.2T Revenue by Year-End

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Department of Petroleum Resources (DPR)-Investors king

Nigeria’s Department of Petroleum Resources (DPR) will hit the N3.2 trillion revenue target by December 2021, according to its Director/ Chief Executive Officer, Mr Sarki Auwalu.

Auwalu made the disclosure when he led a delegation of the DPR management team to the Executive Secretary of Petroleum Technology Development Fund (PTDF), Mr Bello Gusau, in Abuja on Wednesday.

He said that 70 percent of the revenue projection had already been met. “Last year, we exceed our revenue budget. We were given N1.5 trillion but we were able to generate N2.7trillion.

“This year, our revenue budget was N3.2 trillion. By the end of August 2021, we have generated up to 70 per cent.

“So, we with September, October, November and December, it is only the 30 per cent that we will work over,’’ he said

He noted that the government took advantage of fiscal terms within the old and new legislation, thereby creating a level of increased signature bonuses.

“We reorganise the work programme that is normally being done in the DPR to key into the new operational structure as we see it in the bill, now an act.

“That programme is being handled by the planning and strategic business unit as against what we use to have because the entire work programme is supposed to show not only technical but also commercial and viability of oil fields and to guarantee the return on investment for investors.

“We have also created an economic value and benchmarking unit to key into the new fiscal provisions of the PIA,’’ he said.

Commenting on capacity, Auwalu said the country stands at the advantage of exporting skills to emerging oil and gas countries across Africa with proper implementation of the newly passed Petroleum Industry Act.

This, he said, the DPR was ready to partner with the Fund to continue to build capacity in the oil and gas sector

He noted that the Federal Government was determined to create leeway that would encourage investors and drastically improve the nation’s petroleum industry.

He further noted that no fewer than 300 legal battles in the oil and gas industry in Nigeria, which had been stalled for the past 20 years in courts, had been resolved through alternative dispute resolution.

According to Auwalu, the DPR is strategising well to ensure effective implementation of the PIA.

Responding, Gusau commended the DPR for enabling the industry and enhancing business activities in the oil and gas sector.

He said that DPR remained the head of the oil and gas industry in Nigeria adding that the Fund was grateful to benefit from the wealth of ideas from DPR.

“The last time we visited, we had a good discussion and issues raised are being implemented like tracking the inflow of funds in signature bonus accounts.

“We extended the meeting and involved ministry of Finance, Accountant General office and even the Central Bank of Nigeria (CBN).

“Sitting at field development plans and attending significant meetings, helped us to know where and what the industry is trying to do and it also helps to inform our decisions in training and capacity plans,’’ he said

He urged the DPR to continue on its effort to ensure an efficient and productive petroleum industry in Nigeria

He assured collaboration with all as the head of the implementation committee of the Petroleum Industry Act. (NAN)

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