NIBSS Rules Out Transaction Failures During Easter.
By Chukwumah Kelechukwu
Ahead of the Easter festivity on Sunday and Monday, April 21 to 22, the Nigeria Inter-Bank Settlement System (NIBSS), said the mobile payment system is not under any threat of system failure reminiscent of December 24, 2018 debacle.
The NIBSS platform collapsed on December 24, 2018 owing to pressures from huge volume of transactions during the Christmas period in which about 25 percent of transactions failed on that day.
As at the point of collapse, volume of all Point Of Sales (POS) transactions on that day was 31.9 million.
However, the figures have been on steady decline in volume and value since January 2019 when transaction value declined to N222.291 billion, representing 18.26 percent decline from N271.95 billion in December 2018. It further declined by 28.87 percent in February 2019 to N193.425 billion.
NIBSS is the switch platform that connects every other party to inter switch to execute a financial transaction. For instance, when a mobile money firm initiates a transaction at agent point, the signal would hit NIBSS first, and NIBSS will communicate Interswitch which processes the agent’s request to the acquirer bank.
The Interswitch picks up the money from the banker and return it to the mobile money operator’s agent for settlement. Thus, any time NIBSS operating system goes down, the entire electronic payment system goes down too, and no transactions get processed.
NIBSS spokesperson, Lilian Phido, said the problem of December 24 which was occasioned by the persistent deluge of Point Of Sales (POS) transaction failures and non-reversal of wrongly debited transactions had been addressed.
“What the industry did is to extend the timeout period for a typical transaction. For instance, a typical transaction could take few seconds before it times out. That timeout period has been extended,” Phido said over the telephone.
The NIBSS spokesperson reacted to exclusive inquiries regarding rising failure rate in POS transactions in recent weeks which Agents of Electronic Payment companies complained of.
As another festive period approaches during which huge volume of transactions is anticipated, fear of another system crash has gripped Mobile Money agents owing to the recurrence in the month of March. The last month incidence prompted the Nigerian Interbank Settlement System (NIBSS), to tender unreserved apology to acquirer banks of operators.
Some agents of Electronic Payment firms told InsideBusiness that a typical day of failed transactions run into a staggering N1billion per operator, threatening earnings of the firms and their agents.
But NIBSS, the transaction processor company, whom agents alleged to have run out of capacity to midwife millions of mobile money transactions, told our correspondent that efforts were ongoing to enhance capacity as millions of people are now embracing the electronic payment system.
“We had issues where people tried to do Point-of-Sales (POS) transactions and they failed. The customer is debited, and reversal which is supposed to be instant took a bit longer time than what it is supposed to be. These issues have been addressed,” said NIBSS spokesperson, Lilian Phido, said.
She attributed the incident to “industry system glitch”, which she said involved several stakeholders like Interswitch, Banks, payment service providers, even the Central Bank of Nigeria (CBN).
“The mobile payment process goes through multiple entities, from one entity to another, and to the next one until it gets to the beneficiary. If, in the process of going from one entity to another and the time elapses, that transaction will break,” Phido explained.
She added that the issues arose by an effort of the industry players to enhance the system to accommodate more transactions but did not specify how long it is going to take to complete the process of system capacity enhancement.
“There need to be room for capacity enhancement because year after year, we have seen significant growth in transaction volumes. It means that more people are accepting electronic payment, more people are accepting the platforms that are coming up. Today, we have USSD.
“When you notice this kind of growth, there need to be capacity enhancement. That is how it is done every where in the world. We envisage that for months and years to cone, the growth will continue to be there,” said NIBSS’ spokesperson.
Electronic Payment system agents who spoke to our correspondent estimated value of failed transactions at N5billion daily with the result that operators lose earnings that otherwise could have hit home into their accounts.
NIBSS had compelled partner banks of mobile money operators to switch over to their platform for processing all transactions rather than using Interswitch which hitherto could process some petty POS transactions which must pass through NIBSS before the transaction would be completed.
Comments are closed.