Filed in Business by on August 8, 2010

Banks make Nigerians underutilise ATM cards – Bayo Adeokun, E-Pay Plus MD
Sunday, 8 Aug 2010

Bayo Adeokun

Set to change the face of electronic payment in Nigeria, Bayo Adeokun, the managing director of Electronic Pay Plus tells NKARENYI UKONU why he is an advocate of the electronic payment for goods and services

Having worked in the financial sector, what informed your interest in electronic payment?

I felt I needed to explore new things. I didn‘t want to go into what everyone was going into, I got tired of doing the same thing over and over again, I needed new inspiration and it was around the same period that Interswitch was starting as a new company and e-payment switching platform. Our initial idea was to start offsite deployment of ATMs, but we realised that there was already a company being floated by a consortium of Nigerian banks to do its offsite ATMs deployment. So we then decided to settle for Point of Sale deployment in partnership with banks, merchants and locations for electronic payments. That was how Electronic Pay Plus came into being. We started operation in May 2005 as a POS deployment company.

Did you find it challenging enough?

The POS business in Nigeria then wasn‘t as interesting as we thought it would be because of a lot of operational and infrastructural challenges. The Nigerian economy was not ready for POS business then. Even the banks that were supposed to be our partners then did not really understand the entire concept, probably because they were too short-sighted and were only keen on what would bring in money for them, not necessarily the passion to promote electronic payment in Nigeria. And that is why, seven, eight years after the emergence of e-payments in Nigeria, the banks today will still call a debit card an ATM card, thereby restricting the usage for the card holder. There is no enlightenment for the cardholder who doesn‘t know that you can actually do a POS and web transaction with the debit card, rather than restricting it to only ATMs. Everyone today knows this card as an ATM card, whereas it isn‘t an ATM card but a debit card. It can do much more than an ATM transaction and it wasn‘t helping the POS business. So the business became very difficult for us; we couldn‘t make any significant progress with the business. We therefore decided again on how to move the company to the next level within the e-payment space. That was what gave birth to smart card production and personalisation.

What characterises smart card production and personalisation?

The card association is made up of verve from Interswitch, V-Pay by Value card, Genesis by E-Tranzact and Freedom card, define their standard; what do they want the card to do, what kind of memory they want on the card, what kind of application do they want on the card, identity management on the card, loyalty on the card etc. Specifically, the customer‘s details, which are embossed on the face of the card. The security information is encoded in the black stripe at the back of the card, it isn‘t visible but that is what enables you to do your transactions on any of the accepting channels, ATMs, POS or the web. As we speak today, we are the only company that manufactures the card locally.

With the introduction of e-payment for product and services, it invariably means that the society is moving to a cashless one.

We can never totally have a cashless society. There is nothing like cashless economy, even in America. People go to their ATMs to collect cash, as long as there are ATMs, people will always have cash with them but what we are saying is to reduce the use of cash for form of payment drastically. We are able to enable the banks and the card holders to use electronic form of payment for transactions.

The Central Bank of Nigeria in 2007 ordered banks to migrate all existing debit cards in Nigeria to chip and pin. What is the reason for this?

Before now, we had Maxstripe debit card, which was easy to clone and people were being defrauded. Anyone can personalise Maxstripe using a desktop computer. That is why the upgrade to the Europe pay, Master, Visa standard. This entails putting a chip in the card, which is a second level authentication. You require a different technology all together to be able to write on that chip, which isn‘t easily available to fraudsters. That is why the production of the certification process is a bit difficult and there are limited number of companies world over that can personalise a chip card. So for you to be able to clone, you must be a certified company so that if anything happens, it can easily be traced back to which certified company it is coming from. The difference between a chip and pin and a Maxstripe is simply the chip that is now embedded in the card where information are stuck. The card and chip simply reduces the opportunity for anyone to clone it.

Even with this latest technology, people still get defrauded.

The way the world is, as you are introducing a security technology, the fraudsters are also trying to perfect it and beat whatever level of security you are introducing, that is how it is in every economy. You cannot totally eradicate that but it has reduced drastically.

You recently set up a card personalisation plant in Lekki/Epe area of Lagos.

We had a dream of building the best factory in Nigeria, if not Africa. We wanted to do something that would outlive us. Because this hadn‘t been done before in Nigeria, we felt that as pioneers we had to do it right. We also felt we needed some international backing. The singular decision to align with Jharmatol has saved us a lot of time and money. It was like smooth sailing for us so to say.

Any peculiar challenges while setting up the plant?

Of course many. But I must say funding particularly was an initial challenge until Unity Bank came to our rescue. We got no support from the Federal Government as they do not have any direct support scheme for any of such businesses. They give support to SMEs through the banks. We tried to see the possibility of getting funds from that scheme and went to 10 banks, it wasn‘t happening for us. Nigerian banks will never give funds to somebody that is not their relative. Before we could get help for our facility, we went round six banks with all our business plans and they didn‘t see the possibility of our business plans becoming a reality. A banker even asked me why people were not into the business if it was such a lucrative one. Unity Bank came to our rescue after about seven months of walking the streets of Lagos. The irony of it all was that we weren‘t doing business with them as at that time. Today, two banks that turned down our pleas have approached us that they want to buy off Unity Bank and then do business with us.

What are your future projections for Electronic Pay Plus Ltd?

As a personalisation company, we can personalise all brands of cards in 24 hours. We also want to go a step higher by being able to produce the card locally 12 months from now. For now, we only bring in the blank cards for specific banks and then we take them to our personalisation bureau to encode the customer‘s information on the card. No company does that in Nigeria. That is why we have built a gigantic plant in Nigeria. We want to be able to do everything within the card space, but we are taking it one step at a time. We also want to be involved in identity management; we already have the infrastructure in place. We want to be one of the major players in the provision of national and state identity cards for the citizens of Nigeria; we already have the machine in place. Very soon, we hope to be able to introduce to our customers – the banks – who will in turn introduce it to their own customers. That is, a customer can decide to have the picture of anything that catches his fancy on his card. And so many other things we have lined up.

Where do you find the zeal and courage to do this?

You see if we don‘t, who else will? Someone has to do it; we need to move this economy forward. As Nigerians we have no other country to go to and someone must do it in Nigeria, we can‘t wait to have white men come to Nigeria to do this business for us. Initially by the way, before the advent of Interswitch and Electronic Pay Plus in Nigeria, these international companies were approached to come to Nigeria: Visa, Mastercard etc, they refused because they had this misconception that in Nigeria, things cannot work. So with the patriotic zeal in us we figured that if we do not move this country forward, no one will. Yes, those challenges are there, but within those challenges, we can actually move this economy forward. We aren‘t deterred by those challenges.


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