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CBN cashless policy receives boost as non-bank firms begin deployment of ATMs

by Editor

August 1, 2013 | 1:39 pm
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The Cashless policy of the Central Bank of Nigeria (CBN) is set to witness a boost as Wincor Nixdorf and Resort Savings and Loans Plc join the list of firms deploying automated teller machines (ATMs). BusinessDay gathered that Nisdorf has started collaborating with local financial institutions, as well as local vendors to deploy the machines. Wincor Nixdorf is one of the world’s leading providers of IT solutions and services for banks and retail businesses.

This development will deepen retail businesses and tap into the unbanked section of the society, while boosting the apex bank’s cashless policy, industry watchers say.

Resort Savings and Loans Plc (RSL) has concluded plans to deploy the self service machines to 13 locations across Nigeria.

The machines, according to Wincor Nixdorf, would help banks meet the increasing demands of their customers, through new service offers or future-oriented technologies such as the use the ATMs to top up payment cards, or to pay bills from utility, telecommunications or insurance companies – via cash deposit.

In an exclusive interview with BusinessDay at the opening of its representative office in Nigeria, Eckard Heidloff, President and CEO of Wincor Nixdorf AG, said his company is already working with local partners such as  the Computer Warehouse Group PLC, SoftWorks Limited and Cyberspace Network Limited, as well as  leading banks in the country, to achieve its objectives.

Heidloff said that the step is an expression of their commitment to the important growth market of Nigeria, and a continuation of their global expansion strategy. He added, “the  popularity of automated teller machines (ATMs) will increase in Nigeria, just as in other emerging economies.”

He said  the planned installation of the estimated 70,000 ATMs over the next ten years, would not be realistic without collaborative effort, stressing that the current total of 11,000 systems is inadequate for the country’s dynamic and growing financial institutions. He further said, “In addition to Nigeria’s economic growth, an increase in prosperity is the primary reason for the growing demand for ATMs.”

Speaking further, the chief executive said, “Currently there are only 57 ATMs per million inhabitants, to cover the country’s constantly growing need for basic banking services. For purposes of comparison, in Brazil there are 780 ATMs per million and in Russia, 808.

Abimbola Olayinka, managing director of RSL said the success of the public offering and ongoing rights issue, have put the bank in a better position to serve its customers through cutting-edge technology.
Olayinka listed the beneficiary 13 locations spread across six states as including Adamawa, Tarabba, Lagos Rivers, Ogun, Ekiti and Abuja.

“The essence of the ongoing IPO and Rights Issue is to rake in additional funds with a view to beefing up RSL’s shareholders fund to about N10 billion, and part of the funds will go into improving the IT infrastructure, as well as deploying additional ATMs to most of the bank’s branches,” Olayinka said.

Coming at a time that the CBN is considering nationwide implementation of the policy, analysts say the development calls for greater supervision by the CBN, so as to save customers from arbitrary charges.

“The revised guidelines on bank charges kicked off on 1 April 2013 and we will be looking to see the extent to which the COT reduction, amongst others, affects the banks numbers. While we understand that there are new fees the banks can charge, the question is the degree to which these will mitigate lost COT revenue, given its weighting in banks’ fee and commission income’, according to analysts at Renaissance Capital, (Rencap).

Speaking recently, Tunde Lemo, deputy governor, CBN, said, “We are quite aware that it is possible for people to arbitrage by moving cash around states that are very close to areas where we are implementing cashless. Although we are yet to confirm, we hope that within six month post implementation in the five states and the Federal Capital Territory, we should be able to go to other parts of Nigeria.”

By: John Omachonu

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by Editor

August 1, 2013 | 1:39 pm
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