Omokehinde Ojomuyide
Ms.
Omokehinde Ojomuiyide is the Vice-President, Commercial, West Africa,
MasterCard Incorporated. She says the cashless Nigeria policy is making
steady progress amid various challenges, in this interview with OYETUNJI
ABIOYE
What is your opinion about the cashless Nigeria drive?
The cashless discussion is progressing.
There has been a lot of penetration among the large merchants. Whenever
the Nigeria Inter-Bank Settlement System Plc releases the records of
billions of cashless transactions going on in the country, I am always
happy about the progress we have made as a country. You will find out
that most of the penetration we recorded in cashless transactions is
still at the top sphere, when it comes to use of the Point-of-Sales
terminals. It makes sense to start from the top and go down the value
chain. We are now in discussion with banks and other stakeholders to
advance the cashless discussion.
How do you intend to boost the cashless Nigeria drive as a payment company?
As a payment company, we are now saying
that the SMEs are very important to the Nigerian economy and we need to
advance their businesses. I think it was in 2010 that SMEDAN and the
National Bureau of Statistics did a collaborative study on the
contributions of the SMEs to the Nigerian economy. They came up with a
report which showed that the SMEs contribute 45 per cent to the Gross
Domestic Product. Whether that 45 per cent is right today or not, what
it says to us is that the SME sector is a significant proportion of the
economy that needs to get a lot of focus.
And we know that we are in the right
direction because the Central Bank of Nigeria is also focusing on the
SMEs. There is a renewed vigour in supporting the SMEs and moving them
forward. We think that as a technology company, we can also support the
SMEs. We cannot take part in business and commerce but our job is to
make business transactions simpler, faster and safer. If SMEs are
contributing so much to our economy and everybody is trying to assist
them, we believe we have to play a supportive role as a technology
company.
Is it really possible to create an e-payment acceptance in the SMEs space?
Yes. We have been working with banks and
other stakeholders including the Microfinance banks. We are working
with the MFBs because if you need to work with the SMEs, you need to
follow the value chain and the MFBs fall into that value chain. We have
been working with various other entities as well. The Mobile
Point-of-Sale terminal is one of the tools or assets that can help
create acceptance of e-payments in the SMEs space. MasterCard has a lot
of experience in this regard. We are probably a thought leader in this
space.
MPoS device is not a MasterCard’s
product; we don’t make money from it. We only tell the companies that
manufacture the specifications we want as a company. There are companies
that create the MPoS terminals just like the traditional POS machine.
There are hundreds of companies around the world that produce the MPoS.
It is not our job to promote it but we are promoting it because it has
to do with our business.
We also have other companies that create
the software that runs on the MPoS. Again, that is not MasterCard’s and
it is not our product; we only give them advice or technical support.
Some companies create the software and we tell them the standard we
want. We don’t make money from the MPoS and the software that runs on
it. We tell the companies the standard to meet because our cards that
will run on the MPoS must be safe. We also give them advice in terms of
best practice.
Why are we basically involved in
promoting MPowS? MasterCard is involved because we want more electronic
transactions. We want less cash transactions. Every company wants to
move away from cash and there are different ways they are going about it
but what is connecting all of them is MasterCard; MasterCard has the
network. Because we have the network, we are able to bring together the
telecommunication companies, banks and the MFBs. These are competitors
but we tell them the need to collaborate and deal with our common enemy
which is cash. It is important to say again that MasterCard did not
create MPOS. It is just one of the tools that can help us to defeat one
enemy-cash.
Is MasterCard worried about the spate of card-related frauds in Nigeria?
I will say MasterCard is acting on that.
I can say right now that in a concerted effort with the CBN, we have
ensured that all the banks have multiple fraud tools to ensure that this
does not happen. In explaining this, I will go back to the genesis of
the situation. We have the EMV Chip-and-PIN cards being issued in
Nigeria. For a debit or credit cards issued by Nigeria banks, you cannot
hear of cloned cards being used to commit fraud in Nigeria. What
happened in these fraud cases was that card information was collected
here in Nigeria and taken to more vulnerable countries like the USA,
which have yet to migrate to the EMV Chip-and-PIN. The good news is that
by October this year, liability shift will kick in. And this liability
shift is already motivating a lot of USA companies to migrate to the EMV
Chip-and-PIN. Fraud migrates to the weakest link which is the USA in
this case. What happens to the USA is that they have been around for so
long a time and so it is going to cost them a lot of money to replace
the entire infrastructure if they want to migrate to the EMV
Chip-and-PIN. Other countries like Nigeria are very fortunate to migrate
on time.
Why are card-related frauds still rampant in Nigeria?
The fraud rate in Nigeria compared to
any country in the world is still relatively very modest. And it is
because of what the CBN and banks have done regarding the EMV
Chip-and-PIN. They were very forward thinking. And it was a lot easier
for us because we were relatively new. Also, what the CBN and banks have
done since January when we saw the fraud trend was to put some checks
in place. MasterCard supported the checks because we have been working
on it for a while. The CBN has also asked every bank to get fraud tools.
That is in place already and we are working with them on that.
What do you mean by ‘liability shift’?
Liability shift is actually a payment
jargon that describes fraud in two scenarios. Liability shift states
that the liability of a fraud shifts to the most vulnerable party or the
weakest link. So, if for instance I have an EMV terminal and you bring a
card that is not EMV-compliant and fraud happens, I will simply say I
have an EMV-compliant terminal so deal with your fraud. The reason for
this is that If both of us have EMV, the possibility of fraud happening
is very limited.
And so what is going to happen later on
in this year to the USA is that a lot of liabilities will start falling
on them if they don’t put EMV in place. So when fraud happens, they will
just say ‘pay this person back’. So, because of the volume of
transactions happening in the USA, the companies there are being
motivated to quickly migrate. Another reason that is motivating the USA
companies to migrate to EMV is the things that are happening there.
There have been breaches in their systems in recent times, and these
have disturbed the trust of their cardholders and customers. And the USA
companies can’t afford that to start happening because e-payment is a
chunk of their economy. So they are going ahead to put in place
something that is more safe and secure.
Remember also that in Nigeria when we
moved from magnetic strip to the EMV, the reduction in fraud recorded in
the first year was very amazing.
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