Zone Payment Network Limited collaborates with the Nigeria Inter-Bank Settlement System (NIBSS) Plc to improve the improve the Nigeria’s POS payment processes by integrating blockchain technology to address challenges in the payment system.
This comes in response to the Central Bank of Nigeria’s (CBN) regulations, which require financial service providers to route their POS transactions through a Payment Terminal Service Aggregator (PTSA).
The goal is to create a more transparent and efficient payment system, reducing operational costs and financial losses for banks and other institutions.
The Managing Director and CEO of NIBSS, Mr. Premier Oiwoh, stated, “The collaborations represent a significant milestone in our mission to drive innovation and enhance the efficiency of the payment system,’’
He added that this strategic alliance aims to bring about “improved operational efficiency, cost savings, and enhanced financial inclusion, ultimately positioning Nigeria at the forefront of the global payment space.’’
Decentralized card routing system
Decentralized card routing system allows banks and fintech companies to handle transactions between POS terminals and cardholder banks while remaining compliant with CBN regulations. This blockchain-based approach is designed to boost the security and reliability of POS transactions.
The card routing system allows direct management of payment transactions between a POS terminal and the cardholder’s bank using blockchain technology. Unlike traditional systems that rely on a central hub to process transactions, it distributes the processing across a blockchain network.
This approach enhances security, speeds up transaction processing, reduces costs, and ensures regulatory compliance by recording and verifying each transaction on a secure ledger.
Speaking on the outcome of the directives by the CBN, Obi Emetarom, CEO and Co-founder of Zone, added, “Our partnership with NIBSS reflects our commitment to transforming Nigeria’s payment landscape. By harnessing blockchain technology, we are setting a new standard for reliable, frictionless, and universally interoperable payments.”
What you should know
The Central Bank of Nigeria (CBN) has established guidelines for contactless payments under its authority from the Central Bank of Nigeria Act, 2007, and the Banks and Other Financial Institutions Act, 2020. These guidelines are designed to set minimum standards for the operation of contactless payment systems in Nigeria.
Payment Terminal Service Providers (PTSPs), which are licensed by the CBN, are responsible for deploying contactless payment-enabled terminals, such as point-of-sale (POS) terminals. These providers must ensure the terminals’ quality and functionality through regular maintenance and must offer 24/7 support. They are expected to address any repair or replacement issues within 48 hours of being notified.
The Nigeria Inter-Bank Settlement System (NIBSS) operates as the sole Payment Terminal Service Aggregator (PTSA) in Nigeria. NIBSS manages the interconnectivity of all payment terminals across the country, ensuring that devices are brand-agnostic and can accept cards issued by any bank or licensed card scheme. Additionally, NIBSS standardizes the technical and operational specifications for these terminals and implements a risk management process to handle any potential issues related to contactless payments.
