Remita Presentation to 2012 IT Professionals’ Assembly

Remita Presentation to

2012 IT Professionals’ Assembly

“Cashless Transactions:

Platforms, Challenges & Opportunities”

Demola Igbalajobi

Group Head, Remita Services

SystemSpecs Nigeria Limited

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Presentation to 2012 IT Professionals’ Assembly

Common payment channels/ platforms Challenges to Cashless transactions in Nigeria Case Study – Treasury Single Account Brief Introduction to the Remita Platform Opportunities for Cashless transactions in

Nigeria Summary

Presentation Outline

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Internet Based ePayment portals e.g. Remita Credit/ Debit Cards for online purchases Payment accounts e.g. PayPal Online transfers between bank accounts

Point of Sale (POS) Credit/ Debit Cards at card terminals

Mobile payments

Some common channels/ platforms

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Fear of loss of power base – control Resistance to blocking loopholes for ‘sharp’

practices Infrastructure challenges Admissibility of electronic payments as court

evidence Lack of understanding of the concept by the

public Inherent distrust of ‘computers’ by users Lack of innovation on the part of service

providers Delays in settlement of interbank transactions Absence of a legal framework for ePayment

Challenges to Cashless Transactions in Nigeria

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Probably the biggest obstacle, especially in the

public sector The question of ‘Who now does what’? Loss of patronage and importance/ relevance Feeling of being under scrutiny

Fear of loss of power base - control

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Stops indiscriminate diversion of funds

Money can be easily traced to accounts ‘Too fast’ for some banks as it reduces floats

Banks cannot keep money for days as ‘float’ Highlights delays in settlement of interbank

transactions ePayment removes dependency on any single bank

I should be able to pay/ receive money from any bank

Some banks have come to depend on ‘key’ accounts

Beneficiaries not forced to use a particular bank Should encourage more competition

Resistance to Blocking loopholes

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What is required for most electronic

payments? Internet connection; PC; mobile phone

How many people actually take part in ePayment processing in an organisation and need these tools?

What is the frequency of payment transactions?

Compare the cost to a single budget line Availability of many low cost options

Infrastructure Challenges – how real?

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Might not be on the statute books. However

Investigative bodies – EFCC, ICPC etc use it to build their case

Often leads to other physical evidence e.g. property

Depends on the weight of evidence

Admissibility of electronic payments evidence

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TSA is a unified structure of government bank

accounts - a single account or a set of linked accounts for all government transactions, that gives a consolidated view of government cash resources; based on the principle of unity of cash and unity of treasury Government currently has a fragmented

banking arrangement - over 10, 000 bank accounts in multiple banks.

Over N70 billion government funds was lost in failed commercial banks (Source: OAGF, March 2012)

Case Study - Treasury Single Account (TSA)

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Main Objective is to help Government unify banking arrangements in order to have overall oversight of all cash flows.

Means of promoting efficiency, transparency and accountability in Government payments

Achieve End-to-End electronic processing of Government payments in line with the National Payment System (NPS) Vision 2020 objectives.

Objectives of Treasury Single Account (TSA)

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Government does not always know the balance of funds held in the commercial banks, across all MDAs

Government still goes to borrow money when it has money in commercial banks and other accounts in CBN.

The TSA will ensure that Government has access to funds when needed and would only borrow if there is no fund in the consolidated account

Why the Need for TSA?

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The existing Consolidated Revenue Fund (CRF) is

now the TSA for Federal Government and will continue to be maintained at CBN

Most MDA funds will be domiciled in CBN, reducing CBN’s huge cost of liquidity management for Open Market Operations (OMO)

MDAs will have access to cash as and when they need it

There will be little idle cash balances of MDAs at both CBN and Commercial Banks

How Does TSA Work?

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MDAs initiate and approve transactions from their offices against their approved budgets using a Financial Management System (GIFMIS) that integrates with CBN ePayment Platform to automate and streamline payments across all MDAs

MDA payment instructions are sent to CBN to provide the cash for consummation

CBN has adopted Remita as its ePayment platform for effecting payment instructions from MDAs to beneficiary accounts in Commercial Banks, Micro Finance Banks and Mortgage Banks

The use of paper mandates at CBN for CRF transactions has ceased

OAGF has effected all payments from CRF through Remita Transactions totaling Over 150 Billion Naira a month is

passing through the CBN Remita platform

TSA Implementation

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What is Remita?

Remita is a comprehensive ONE-STOP

e-Payment, e-Collection and Payroll Solution.

Extremely robust and yet so easy to use, Remita is designed to be used by any public or private sector organization

irrespective of Size, Structure or Specific requirements.

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View balance in all your accounts across all banks

on just one screen Handle e-payment of all types - salaries, pensions,

taxes, suppliers/contractors, individuals, etc. Make payments to beneficiaries in any

Microfinance, Mortgage or Commercial Bank Instantly notify payment beneficiaries by SMS and

email Monitor and report on any activity or payment ever

made and on the platform Operate all your bank accounts from just one place

right from the comfort of your home, office or anywhere you may be in the world

With Remita e-Payment you can:

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• Handle all collection types-fixed or variable amounts or regular or irregular intervals

• Automatically debit accounts held in any bank in Nigeria

• Collect cash from customers through any bank branch

• View consolidated collection activities from all banks on a single screen

• Pre-notify customers 3 days before actual debit

With Remita e-Collection you can:

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With Remita Payroll, within minutes You can:

Compute all staff allowances, loans, pensions, taxes and other deductions.

Use Biometrics to identify your staff and pensioners

Pay staff and pensioners with accounts in any Microfinance, Mortgage and commercial banks

Automatically deliver electronic schedules to PFAs, PFCs, Cooperatives, Unions and other statutory agencies

Provide staff with pay slips and tax computation slips

View unlimited Payroll, Pension & Biometrics Reports

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Millions of ‘unbanked’ waiting to be tapped into

Many organisations, including many public bodies still untapped

Seamless integration between platforms, products and solutions

Go International!

Opportunities for Cashless Transactions

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Is it really possible to have a ‘cashless society’?

Do we really want a cashless society? Emergency purchases? There is a comfort in having cash in my

pocket Getting cash discounts Culture

But ….

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Cashless transactions is a reality that has come to stay

There are a number of platforms open to users The challenges are surmountable – technical &

human Opportunities still abound How far can we take it?

Summary


Thank You

Remita Presentation to 2012 IT Professionals’ Assembly

Documents

Transcript of Remita Presentation to 2012 IT Professionals’ Assembly