Payment System Vision2020

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International Payments ConferenceAbuja 2013

PSV Initiatives – Breakout SessionTRANSPORT

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TRANSPORT INITIATIVEBackground

Our mandate is to demonstrate the benefits of e-payments in the transport business by implementing a PILOT with companies such as BRT,

ABC Transport, Danfo operators, Taxi operators(Yellow Cab, Red cab), etc.

The Transport Initiative aims to, at a minimum, develop strategies for getting the public to pay for (inter-city and intra-city) transportation

electronically.

The benefits to commuters, transport businesses and investors, and the nation at large are enormous.

Electronic payments hold great potentials for the Transport sector especially where electronic payments are imbibed at all stages of the

entire Transport value chain.

Transportation or commutation is part of everyday living today.

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20TRANSPORT INITIATIVE

A closed eco-system accepting dedicated payment cards and/or normal payment cards

Good public awareness

Easier to offer incentives for electronic versus cash.

Pilots publicised as model implementation to attract the interest of stakeholders in transportation business

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Rationale

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20OBJECTIVES

To demonstrate the relevance of cashless system to the transport sector

•Increasing adoption of electronic payments over cash

To show that electronic payments has benefits for the transport sector in cost savings, safety, and bottom line, and engenders Financial Inclusion.

•Pilot implementation

To articulate different areas of the transport sector where electronic payment is applicable – vehicle purchase, hire purchase management(e.g. direct debits), passenger payments, fuel purchase, insurance, data gathering and management etc

•Pilot implementation

To engage different transport stakeholders in publicity/enlightenment programmes

•Number of industry stakeholders engaged.

To generate statistics that are relevant to transport sector, to facilitate electronic payment adoption trends

•Periodic release of transport sector statistics

To articulate incentives for electronic payment consumers, to grow adoption e.g. discounts for e-payment based passenger payments

•Adoption rate 4

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20STAKEHOLDERS

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Banking Industry User Community Service Providers

1 CBNConsumer Rights Protection Agency

Banks

2All Banks as issuers of payment tokens

Taxi Drivers association Processors

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All Banks as acquirers of electronic transport payments

Transport Owners Association Nigeria Central Switch

Transport Employees Association NIBSS (settlement)

4Petrol stations

Card Schemes, Mobile Payment Operators

5 Air Travel industryEFiNA

6Auto dealers

FRSC

Federal Ministry of Transport; States Transport ministries7

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20SYNERGY WITH FSS2020

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FSS2020 Work Stream

Level of Synergy Rationale and Approach to Leverage Synergy

Financial Markets High Payment s is an integral part of transport system. Adoption of electronic payments in transport business will help to grow electronic payment adoption in other facets of life.

Insurance Medium

Mortgages Low

Pensions Low

Credit (Micro/SME) Medium Electronic payments will promote credit in the transport sector – Direct Debits will grow lease and hire purchase market.

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20IMPACT ON FSS2020 THREE COMMON THEMES

FSS2020 Theme Level of support Rationale and approach to support the Theme

Deepening High • Everyone uses the transport system. The success of this initiative will help in shifting paradigms from cash to non-cash in other aspects of life

Economic Growth Medium • Success of this initiative will enhance economic growth as it will help to deliver electronic payments benefits in the country

• convenience, higher velocity of money, enhanced revenue for investors in transport business, etc.

International Medium • Success of this initiative has potentials of attracting foreign investment to the transport sector.

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20KICK-OFF TASKS (2 MONTHS)

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Milestone Specific deliverables

1Ascertain current payment practices for transport at a major city e.g. Lagos

State-of-the-Art report

2Articulate cost-benefit analysis of cash/electronic payment for transport system

Cost-Benefit Analysis

3Select pilot transport system for focus

Pilot transport system with clear justification for selection

4Rally payment service providers to agree suitable payment system(s) for transport system

Transport System payment solutions document

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20MEDIUM TERM PLAN (10 MONTHS)

Milestone Specific deliverables

1 Implement a pilot scheme Increased e-payment adoption in the selected transport scheme

2 Ensure that payments for transportation on a selected mass transit system can be made electronically

Analysis of percentage of journeys paid using electronic means before and after the pilot

3 Publicise achievement with pilot scheme

Publicity Plan

4 Organise enlightenment campaign for transport system stakeholders , to replicate success of pilot

Increased e-payment adoption in the transport sector

5 Articulate bottle-necks and critical success factors

Report

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RISKS AND DEPENDENCIESDependency and Risk category

Level of risk or dependency

Rationale and approach to mitigate risk and dependency

1 Infrastructure High Explore different e-payment platforms and technologies to identify those suitable for the transport sector

2 Legal and Regulation Low CBN Guidelines are sufficient. Also to consult relevant guidelines of the Federal Transport ministry

3 Public Awareness High Transport sector is large. An articulate public awareness programme is required to run an effective public awareness programme. Services of advert/marketing agencies required.

4 Resources – people High A lot of Leg work is required. Advert/marketing companies would be involved.

5 Resources – finance High Substantial funding is required to run an effective implementation

6Viability/Profitability High Service providers would not show interest in transport

sector if the business is not commercially viable for them. A cost recovery analysis would be articulated to eliminate all doubts.

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20RECENT DEVELOPMENTS

Fortis Mobile.– Fortis Mobile (of the licensed MPOs) is piloting mobile payment with ABC Transport, and is

at the verge of signing agreement with FRSC for managing penalty payments with Mobile wallets.

LCC Toll payment– e-Tag cards (tap and go) have been introduced at the Lekki-Epe Expressway toll gates.

LTC Toll payment– e-Tag cards (tap and go) have been introduced at the Lekki-Ikoyi bridge. – Prospective Partner Organisations: e-RG, EFiNA, FortisMobile, Banks,NIBSS.

LAMATA.– The Lagos State transport company, LAMATA, has been piloting e-ticketing since 2011 and

rolled out operations in early 2013. The technology is based on NFC contactless (tap and go) card payments, with NFC readers installed in buses.

– LAMATA has provided incentives by making e-ticketing cheaper for transport payment than cash.

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20LAMATA

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20 Questions and Discussion

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