NCC: Nigeria Needs Multifaceted Approach to Strengthen Digital Infrastructure, e-Payment System

Nume Ekeghe, Dike Onwuamaeze and Kayode Tokede

The Nigeria Communication Commission (NCC) has stated that a multi-faceted approach that would involve government agencies, regulatory bodies, financial institutions, technology providers, and the private sector was required to strengthen digital infrastructure for efficient and innovative e-payment systems in Nigeria.

This was declared in Lagos at the weekend, by the Executive Vice Chairman of NCC, Prof. Umar Danbatta, at the Finance Correspondents Association of Nigeria’s (FICAN) annual conference with the theme “Strengthening Digital Infrastructure for Efficient Innovative Payment Systems in Nigeria.”

Danbatta, who was represented by a Deputy Director of NCC, Mr. Anthony Ikemefuna, stressed the need to improve collaborative efforts between the NCC and financial regulators such as the Central Bank of Nigeria (CBN), to enable proper coordination of policies and regulations related to digital payments and telecommunications.

He also called on telecom operators to support financial inclusion initiatives by partnering with banks and fintech companies to offer mobile banking and payment services to unbanked and under-banked populations.

He said that, “strengthening digital infrastructure for efficient and innovative payment systems in Nigeria requires a multi-faceted approach involving various stakeholders, including government agencies, regulatory bodies, financial institutions, technology providers, and the private sector.”

He also identified some key strategies and the way forward that would enable the country to achieve this goal, which included investment in digital infrastructure, promotion of digital literacy and inclusion, the strengthening of regulatory frameworks, enhancement of cyber security measures and fostering of competition and innovation.

Others are building trust and encouraging consumers’ confidence, enduring data privacy and consent, as well as collaborate with private sector and ensuring government’s support and leadership, and monitoring and evaluation.

Danbatta, said investment in digital infrastructure was needed to, “expand and upgrade broadband and mobile network infrastructure, particularly in underserved and rural areas,” as well as investment “in data centers and reliable power supply to ensure the resilience and availability of digital payment systems.”

The NCC’s chief also harped on the need to, “launch nationwide digital literacy campaigns to educate citizens, especially those in rural areas, about digital payment systems.

“Encourage the adoption of mobile banking and agency banking to reach unbanked and under-banked populations.

“Update and streamline regulatory frameworks to accommodate digital payment innovations while ensuring consumer protection, security, and financial stability. Collaborate with industry stakeholders to establish clear standards and interoperability requirements.

“Develop and enforce robust cyber security regulations to protect digital payment systems from cyber threats.

“Promote the adoption of encryption, multi-factor authentication, and fraud detection technologies.

“Promote a competitive environment by preventing monopolistic practices and ensuring fair market access for new players” and encouraging “fintech innovation through regulatory sandboxes and support for startups.”

He referred to digital infrastructure as the foundational technological components and systems that enable the functioning and connectivity of digital services, applications, and data in today’s information age, emphasing that these forms the backbone of the digital economy and society.

Danbatta, further stressed the need to encourage partnerships between financial institutions, telecom operators, and fintech companies to develop and deliver innovative digital payment solutions.  

Meanwhile, the Head, Digital Banking, United Bank for Africa (UBA), Mr. Olukayode Olubiyi, said 85 per cent of transactions done by the UBA settle on its digital platform and argued that inadequate infrastructure posed one of the greatest challenges to Nigeria’s electronic payment.

Olubiyi, added that the dearth of operational and telecommunications facilities, as well as unstable power supply had slowed down the growth of electronic payment in the country.

He said: “Ultimately, it comes down to policy, regulation, and collaboration. If parties are willing to collaborate, many of the frictions currently experienced in the Nigeria financial service sector can be mitigated.”

He added that banks faced unprecedented e-payment failures during the period of cash scarcity in the first quarter of this year, which prompted ‘the urgent need for technological infrastructure upgrades.”  

According to him, the challenge of failed transactions in Nigeria’s payment systems should necessitate collaborative effort among industry stakeholders and the implementation of appropriate policies and regulations.

Olubiyi also called for, “an increased collaboration among the CBN, telcos, commercial banks and fintechs to expand internet connectivity and seamless electronic transfers across the country.”

He added that, “uniformity in banking applications across the industry could significantly reduce the occurrence of failed or delayed payments.”  
Olubiyi stated that, “to combat fraud, it is imperative for the government, private sector organisations, and international partners to engage in strong and cohesive collaboration. Sharing intelligence and pooling resources will significantly contribute to the fight against cybercrime.”

“Furthermore, this collaboration can extend to investments in cybersecurity infrastructure, including cybersecurity training facilities, incident response centers, and cybersecurity research and development centres,” he reasoned.

In his welcome address, the Chairman of FICAN, Mr. Chima Nwokoji, noted that the challenges witnessed in the country’s payment system during the cash scarcity provided a window of opportunity for the banking system to be proactive and inventive.

Nwokoji, said this would enable them to reap the benefits provided by electronic payments.

He said: “As banks and fintechs are expanding their financial services portfolios to capture the unbanked and semi-banked, they should not only be expanding their digital infrastructure, but also making it more sophisticated to ensure seamless transaction and safety of funds.”