Payments System Vision 2020:
A safe and effective payments infrastructure is core to the financial stability of any country. The CBN embarked on the Payments System Vision 2020 project in 2007 with the development of the PSV 2020 Strategy document which attempted to benchmark the Nigerian Payments System in line with global best practice. The document gave the CBN an overview of the Nigerian Payments System whilst conducting a gap analysis using the Bank of International Settlements Core Principles to determine the areas that needed to be addressed with the aim of ensuring "National Utilization and International Recognition" of the Payments System.
In view of this, the CBN created 11 working groups comprising stakeholders from all sectors towards achieving a more robust and effective payments system. The working groups were categorized into the Infrastructure, Initiative and Special interest working groups to drive the implementation of the mandates.
The Payment Systems Vision 2020 provides a roadmap that looks at the infrastructure in the context of end users, service providers, central bank, regulators and the international community. The Vision is to create an electronic payments infrastructure that is nationally utilized – by all sectors of the economy and all regions of the country – and internationally recognized – as being world class.
In furtherance of its activities towards the development of the National Payments System, the Bank continued to issue guidelines and implement policies and initiatives to increase the safety, reliability and efficiency of the payments system.
The CBN organized an International Conference Payments Systems in September, 2013 during which the PSV2020 strategy document (Release) was launched. The major highlight of the document was the 7 key recommendations.
The Seven key Recommendations to improve the resilience of the Payment Systems Infrastructure are that CBN should:
1. State a policy that no payment system would invoke the principle of ‘unwind’
2. Signal its intent to move, at an appropriate pace and in an appropriate timeframe, to a ‘Survivor Pays’ model for all payment schemes (RTGS payment system by end 2016 and Deferred Net Settlement systems by end 2019)
3. Strengthen Scheme governance structure through delegated responsibility to key stakeholders in the payment schemes and independent directors
4. Ensure regular benchmark against the internationally recognised Principles for Financial Market Infrastructure (PFMI) produced by a committee of the Bank for International Settlements
5. Engage with CLS (Continuous Linked Settlement – market infrastructure that mitigates settlement risk in FX deals) to commence the process of Naira becoming a CLS Settlement currency.
6. Mandate all banks to use SWIFT Sanction Screening (or similar service) for all international payments sent via Correspondent Banks
7. Work jointly with SEC and other key stakeholders to sponsor a formal review of the Securities Markets in Nigeria. The review should be completed under the FSS2020 Financial Markets work-stream.
In addition, Eight Initiatives were developed based on specific industry verticals, to increase adoption of electronic payments within the Nigeria market. They include the following:Agriculture, Smart Cities, Hotels;Entertainment, Health, Government Payments, Transport, Education, Bill payments and Direct debit.Developments in the Payments System
In continuation of the implementation of the PSV 2020, the Bank embarked on the following:
- The Guidelines for the operations of banks in free trade zones (FTZ) was drafted. The objective of the document was to provide detailed regulatory and supervisory requirements necessary to promote efficient and sustainable banking services in Nigeria’s FZs.
- In its effort to strengthen the legal framework of the Nigerian Payments System, the Bank had been liaising with Bank for International Settlement (BIS) for review and a Legal Special Interest working Group is working on the bill with respect to the feedbacks gotten from BIS.
- The Bank worked jointly with SEC and other stakeholders to develop strategy for massive adoption of e-dividend payment.
- The deployment and commencement of full operation on the RTGS (Real Time Gross Settlement) system within the payments system sphere was also achieved.
- The adoption of i-Teller; Cheque Truncation in the Payments System industry and also working towards achieving a T+1 credit into beneficiaries account before the end of 2014.
vi. The Banks have also been mandated to adopt the SWIFT Sanctions Screening service (SSS) for messages passing over the SWIFT network in compliance with AML/CFT global regulation requirements.
vii. CBN had worked jointly with SEC and other key stakeholders (CSCS, DMO, NSC) to sponsor a formal review of the Securities Markets in Nigeria.