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Naira Policy: Top reasons bank transfers via ATMs, PoS, others are failing in Nigeria –US-based Expert

Consumers at a Bank's ATM Gallery in Lagos

*Prof. Ndubuisi Ekekwe, a Nigerian entrepreneur, System Automation engineer and Lead Faculty at Tekedia Institute, United States, explains ‘a simple solution’ to recurring failures in the current cashless payments regime to optimise the process in the country’s ecosystem

Gbenga Kayode | ConsumerConnect

Prof. Ndubuisi Ekekwe, a Nigerian entrepreneur and member of Tekedia Institute Faculty, in the United States (US), has explained how Nigeria can fix the current challenges with the electronic payments system amid the worsening Naira scarcity regime with attendant surging socio-economic challenges.

ConsumerConnect reports the Harvard Business Review writer since 2009, in a recent blog post, urged the West African country to “simply, move from our current system of debiting before releasing cash or value, to one that follows ‘lock” value, release value to the recipient and then debit the originating account.”

Prof. Ndubuisi Ekekwe

Ekekwe, who was a former System Automation Engineer in a bank, in Lagos, also stated that Nigeria struggles with “the current mess where banks debit and do not deliver value to recipients” in view of the discomfort and socio-economic lockdown in the country over most consumers’ inability to access redesigned banknotes.

According to the Nigerian, who “invented and patented a robotic system which the United States Government acquired assignee rights, a simple solution could be to reconfigure Automated Teller Machines (ATMs), Point of Sale (PoS) terminals, and evolve how we do business.

Prof. Ekekwe further explained: “Lock” value in originating account, release value to destination and debit the originating account.

“If you cannot lock value, then, do not follow the subsequent phases.

“And if you lock value, irrespective of anything, including technology glitch, go ahead and release value. Later, you can debit the account.”

The expert said the implication of this process  is that “you will never visit a restaurant where the owner tells you that your debit card payment failed only to receive a debit alert from your bank in 4 hours. Why?

PoS terminal and mobile payment device

“Before the bank can debit you, it has to have established that the recipient has received the value.”

“Nigeria needs a Lock, Release and Debit sequence to avoid this mess!” stated Ekekwe.

Comparative analysis of e-payments experience in US

Ekekwe observed that in US banking, there is what is called “a PENDING state (you see that in your online account) before any debit as the bank ‘warehouses’ the fund, making sure the payer cannot re-use it.”

He noted that it has already sent value to the recipient.

“Once it establishes the recipient has the value, it moves from PENDING to DEBIT.

“Where it is unable to deliver value, it aborts that process and returns money to the payer.

“By doing this, it cannot debit you without serving your purpose; a great system design which works irrespective of network speed,” he stated.

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