Overcoming Challenges Of POS Transaction

WITH the reduction of maximum cash withdrawal, using the ATM machine, from N100,000 to N60,000 by the Central Bank of Nigeria (CBN) last week, it is expected that many Nigerians will turn to the use of Point Of Sale (POS) for settlement of transactions.

But that may not be so, as the POS option is yet to gain popularity among Nigerians, with challenges like poor network service, as businessmen, who have keyed into the usage are complaining of poor sales because of their inability to sell to card holders.

The Nigeria Interbank Settlement Services (NIBSS) had observed in its recent report that “POS is the most popular non-cash payment channel, preferred among the non-cash payment options by 93.6 per cent of merchants, and 35.8 per cent of consumers usage.”

It described the usage of card and POS as fair with an average of three to four out of every 10 customers requesting to pay for transactions by card/POS.

However, the report said only 3.1 per cent of consumers cited card/POS as their preferred payment option, attesting to the low usage of POS.

At House To Home, an interior design company in Victoria Island, the customer service supervisor, Dupe Gbolahan said the Point of sale (POS) machine “performs well, but “some times there are network issues,” which could hinders sales, especially after a heavy rainfall. “Some clients don’t come back, unless they urgently want any of our items, network is still an issue because if we are talking about cashless policy then the banks and network service providers have to be on top of their game,” she said.

The POS at Rashman Vogue boutique in Bariga is not functioning. The sales man Emeka Peter said, “it hasn’t been working for a while now, so we’ve dumped it, bank officials have not come to service it, at least they would have known it is not working. Since then, we have only been making cash sales. Although some customers had wanted to pay via POS, our own is not functioning and they complained a lot about it. Sometimes, we have to escort them to a bank close by to make withdrawals to pay for items. The only good thing is that no charges would be deducted from cash transactions unlike the POS, so I am not even bothered about the POS, especially when I think of the charges.”

At the Hangers and kick Boutique, the Palms shopping mall, Lekki, sales representative, Oma Adeleke said, “before, we used to have issues whereby a customer’s account would be debited twice, but that has stopped. The main problem we have now is availability of network. When there is no network, we advise customers to use their ATM to make withdrawals, but sometimes, even the ATM might also have network problem or be unable to dispense cash. If the person is an old and trusted client, we accept their cheques, otherwise we tell them to go to the nearest bank to make cash withdrawals for payment.”

Telecommunication network connectivity continues to mar the progress in Point of Sales (POS) adoption rate in Nigeria, according to findings.

Interactions with some representatives of popular ecommerce merchant, revealed that when customers use their credit/debit cards on the POS terminals, which are run by commercial banks, customers account are debited without the fund getting to the ecommerce platform.

“When the customer is lucky, the fund can be returned to his or her account immediately, but should the network challenge persist, it could take between seven or 14 workings days before the fund is returned to the customers’ account,” one of them said in Lagos Thursday.

Already, POS transaction in the country is nearing the 200 per cent mark, as it is currently firm at 191 per cent. POS terminal is an electronic device that is used for verifying and processing credit card transactions and works typically transmitting data over a standard telephone line or an Internet connection (wired or wireless).

Currently, most POS terminals are provided with connectivity through GSM Subscriber Identity Module (SIM).

According to telecommunications experts, the POS terminals use the GPRS service of the network (the GSM service provider) to communicate with the network infrastructure of terminal deployer, in this case CBN licensed Payments Terminal Service Providers (PTSP) and National Central Switch as Payments Terminal Service Aggregator (PTSA).

Kehinde Aluko, a telecoms expert had explained the phenomenon behind transaction failure during the use of POS, it occurs when there is difficulty to get transactional data and transmit same.

According to him, if immediate authorization is not available at the time the card was processed, the payment is stalled and therefore the transaction would be incomplete.

“There are times that the banks would have debited your account after swiping your card and imputing your data on the terminal, but the fund fails to get to the PTSP and in the process, arguments and counter arguments may occur”, he stated.

However, the Executive Secretary and Chief Executive Officer (CEO), Electronic Payment Providers Association of Nigeria (EPPAN), Mrs. Onajite Regha, said the challenges bedeviling POS transactions in the country are being addressed by the relevant authorities.

She confirmed to The Guardian that POS operators are gradually dumping the GSM technology for non-reliability to the CDMA platform for improved connections.

“We find that more people are willing to use to POS terminals for small value transactions, but a major constraint is with connectivity. The payment service providers continue to work hard to ensure that this challenge does not overtake the efforts that are being put in and there are discussions going on within.

“We are aware that NIBSS are in discussions with the telecommunications operators and solutions are been sought to resolve this challenge. You will agree with me that marked improvements have been noticed with all the new innovations being employed by various providers,” she told The Guardian.