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Editor, Itedge, Segun Oruame.

Of E-cards Expo and Trust

In less than two weeks from now or so, the smart card expo would hold in Lagos. It is an annual ritual meant to sensitise on the virtues of electronic or cashless transaction. Interestingly, it is an event that tends to remind us very harshly of how heavily cash-depended we are as a people and how impervious we are to changes that would reduce such dependence.

Valucard had an exciting beginning and so also was Smartcard. In the years that those cashless payment devices have been with us, there is but an insignificant penetration.

Outside Lagos, only a few people have heard about Valucard. And the further you go away from Lagos, the more unlikely you are to meet someone who can figure out how to transact business without physical cash.

In a nutshell, only Lagos knows Valucard or any cashless payment solution. And in Lagos, a city of about 15 million people or 10 per cent of the national population, you would not get up to 200,000 that have seen or actively use smart card payment. Shame!

What does this mean? There is still a market to be courted in the rough water economy of Africa’s most populous country. Imagine if 10 or 15 per cent of the population in Lagos frequently use electronic cards to transact business. Specifically, imagine buying your domestic appliances at Alaba International Market from an Ibo trader with Valucard payment system.

But these are just a figment of the imagination and it may take an awful 10 years or more to get even the rich in Lagos adopt e-card as a way of paying for goods and services. Why is our society so impervious?

The reasons do not require an academic of distinctions to explain. A robust infrastructure does not exist to guaranty a perfect or near perfect workability of e-payment systems. NEPA may strike just when one party in an e-payment transaction wants to confirm the authenticity or otherwise of a card. The phone lines may go gaga when they are most needed for a crucial e-cash transfer. Satellite signals may go down to zero when they are most required during raining seasons, considering the fact that most VSATs here are hooked on to the KU band.

And what again?  Of course, sudden power sludge may trigger a complete blow out of the entire system and someone would be forced to write a “Dear customers, we are sorry press release.”

Problems of infrastructures are only a part of the challenges. What about government! What more proactive countries have done is to create enabling laws that would encourage individuals and corporate institutions to take advantage of existing e-payment cash systems. Naturally, the existing operators of such solutions have seen growth in service to underscore a wider acceptance of their place in a changing world.

In ‘obodo’ Nigeria, government appears to be as ignorant as my illiterate grand mother of epayment schemes. Legislators would rather participate in a “bags of ‘Ghana must go” game than discuss legal frameworks to encourage and guide the use of epayment systems. That is why I fear that the smart card expo far from creating the required awareness in the right quarters is only achieving the theme of ‘expo for expo sake.’

There are fundamental issues organisers of this year’s event must address. They are not too different from what have often been harped on. Only now, there is a more sense of urgency to get everyone keyed into e-systems. Policy frameworks are crucial as are laws necessary to encourage the rapid use of e-cash. There have to be some measures of confidence built into the system and safeguarded by laws.

If anything happens as to affect the expected advantage that a user of epayment process should enjoy, what legal provisions are there to compensate for such denial of entitlements? The local trader may not be so educated, but he or she is not a financial prude, he wants to know that his trust in the epayment process would not be abused. He wants to law what legal safeguards are there to best protect his interests against the whims of the epayment solution providers and the banks that are their partners.

In a country where trust has become scarcer than gold, people are not likely to believe that a card in their wallet, or a click on their mobile phones, or a mouse click behind an Internet-enabled computer is all that they need to pay for service or get money transferred into their accounts. Not in this age of 419.

So, as the experts make to converge at the expo in a matter of days, they must find a way at addressing the question of trust in a fraud-ravished country. They must find a way round convincing us all that there are solutions robust enough to safeguard against abuse of the epayment process and that a card or a click is as secured as money in Fort Knox; that it makes much sense to click cash online than to travel east to west with bags of naira through highways of potholes and goblins; and that the law would not become insufficient to act in case problems arise.  These are the reasons why we are all wary of cards.

And this is why Zenith Bank is building its branches closer to the market and to us – because its managers know we are not ready for cards and that we would rather walk into a bank and withdraw cash than give a man card to draw his payment. It is a smart business strategy fostered round the ‘state of the nation.’ So long.

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