Central Bank of Nigeria (CBN) is set to activate the dormant Nigeria Central Switch (NCS). The apex bank said this is needed for a competitive environment, while promoting shared services and innovation. To this end, it has amended the guidelines on transaction switching in the country.
Director of Banking and Payments System Department, Dipo Fatokun, announced this in a circular to all banks, mobile money operators and payments services providers Tuesday. He said the amendment was necessary in order to strengthen the nation’s electronic payments system.
“CBN, in ensuring that the Guidelines on Transaction Switching Services in Nigeria support the objective for payments efficiency and financial inclusion, hereby effects the following changes. Section 2.6.3 of the Guidelines which stipulates that ‘NCS shall not own or promote any card business or retails products and shall be run in accordance with international best practice’ is hereby amended to read as follows:
“The NCS shall be run in accordance with international best practice. To this end, the Nigeria Inter-Bank Settlement System (NIBSS) Plc shall communicate the Application Programming Interface (API) and other specifications of all its products to all banks and other licensed operators, including switches, mobile money operators and payments services providers, immediately.”
According to the NIBSS, the central switch is supposed to serve as the national gateway for payment services in the country. It added that the CBN’s directive was that each bank should connect to the switch and other switches of choice.
“The vision of the central switch is to achieve greater financial inclusion through a cashless economy, where the consumer can get instant services at very low rates because the centralised system has reduced costs., minimised financial wastes and significantly improves efficiency of industry targeted e-Payment schemes.”
However, it lamented that banks and the payment switches in the country have not activated their lines after connection. This has made it dormant overtime.
“All switches are also connected to the central switch, but many of them have yet to go live. It is like when you buy a SIM card and you put it in your phone, you cannot start making calls until the network provider activates your card.
“This means that communication from that card will be routed through the network. As at now, they are all connected. They are all tested. They can all work tomorrow morning, but many have not activated those lines.”