ELEGBE: WITH TECHNOLOGY, ELECTIONS CAN BE BETTER IN NIGERIA
why you see them always chasing cars. But if you give them a solution that eliminates the need for ‘change’ they would adopt it, because you have solved a problem for them. But what is happening is that some of us who wear suit and tie are designing products for people who don’t wear suit and tie. We don’t understand their lives and what they need most. But you can see that sometimes if you understand the way people live, it is easier to find solutions for them. So, one of the learnings for me is that if you want to solve my problems, you need to understand my problems and you need to feel it. Once you do that, then it is easier.
But another concern around alternative banking channels, especially through cards is fraud, how best do you think the industry can address this?
Fraud is a global phenomenon and because it is global phenomenon, if you learn from fraudsters, you will understand that they cooperate a lot. It is a global network, they have resources and they have technology. The people who have the technology are not the ones who commit the fraud, they just enable others to commit the fraud and they benefit from the process. We have to learn from the fraudsters and try to be better than they are. One way is that they collaborate, so we also have to collaborate. Secondly, we need to share knowledge because technology changes and it is not static. Thirdly, we need to make investments. They are investing and so we also need to keep investing to keep getting the latest technology to combat fraud. In the specific contest of Nigeria, we need to enable and empower law enforcement agencies because at the end of the day, if there are fraud cases, they are the ones to prosecute. We need to understand the payment system and the kind of risks involved. And this calls for us creating dedicated funds to educate policemen and people in the Economic and Financial Crimes Commission (EFCC). If you commit fraud and you get away with it, you will do it again. So, we need to make sure that those who can help us prosecute them and the policemen who can chase these men and arrest them are empowered so that they can do the job very well. If there is no way to deter them, it would continue, like kidnapping today. So, we need to increase what we call the work factor by making it extremely difficult to embark on fraud by clamping down on people.
Has your firm ever considered developing an electronic solution to address the challenges in Nigeria’s voting system as well the traffic situation in Lagos which appears to be worsening, don’t you think a digital solution can be developed to address that as well?
Let’s start with elections. Elections can be done better. There are easier ways to carry out voting that would not cost the entire country what it cost us today. Today, it is too expensive to conduct an election. So, like you rightly said, we have a combination of technology that can be used. There are people that have registered for national identity card, there are people who have Bank Verification Number (BVN), driver’s licence and so on. So, once you know these people, we now have to make the various data base talk to each other, so that you can easily find out if someone has voted using his driver’s licence and he is attempting to vote again using his BVN. So, because you can see that person from the data base, you disallow that. We all know about blockchain. One of the big uses of blockchain is called the Single Source of Truth, which all of us can see what is happening because of the way it is designed. Blockchain will be a good solution to use for elections. I must be honest with you, every time we have elections, when I see the challenges we go through, I think about technology. But because elections happen once every four years, once it goes, we forget about it again until the next four years. The truth is that there is a way to make it happen and there is technology that can be used to make it a lot easier. Should it be driven by government? Maybe. But even if the government does not, nothing stops the private sector from building something for the government to use. Whether they use it or not is a different story. Now, transport and health are areas we are interested in. The way we look at opportunities is such that whether you are young or old, Christians, Muslims or pagans, whether you have a job or you don’t have a job, you must move. Transport is one area that every human being can move. So, if you are looking at national development, if you can make your transport system very efficient, the productivity gains would be huge. So, there is no doubt in my mind that we need to sit down and look at transport as a whole. So, to make transport work, there are few things you need to consider. You need what is called a multi-modal and multi-operator system and I can explain that. There are different modes of transport. For instance, in ticketing, you have to look at the different modes. When I get into a bus or a taxi, the same payment card or mechanism I used for the bus should be what I should use for taxi. For instance, if I want to go to Ojuelegba, I should be able to say as part of my journey, I am going to be on a train and from train I take a taxi and from taxi I take a bus. The same payment token should be able to work for all the routes, that is why it is called multi-modal. Even within each mode of transport, there are different modes. Then, there is also what is called multi-operator. Let us assume I am going from one place to the other, even only with bus, if I come out from one bus, the same ticketing system should also apply for other buses. This can be done. The only challenge we have in Nigeria presently is that most of the major transport buses are controlled by the government. When government is involved, sometimes you have to struggle to get approvals. Many years ago, we wanted something in Abuja with the bus system, as soon as one government left and a new government came, they were not willing to honour the contract. So, today our transport system is still controlled largely by the government and like everything that has to do with government, you have to factor the risk involved when one government leaves and another comes on board.
But have you engaged the government on this?
No. We don’t have a solution yet. I told my team ones to look into it, but I am almost certain they haven’t because of other pressure. But it can be done. But, whether government can accept it, is a different thing.
There are complaints of excessive charges by banks, what do you think should be done to put to stop to that?
I can comment only about transactions charges through the channels. In the United States, a few months ago I stayed in a hotel in Houston and my card from one of the global networks was not accepted because my bank configured the card for chip and pin. Although they claimed at the hotel that they have chip and pin terminals, it didn’t work. I was there for three days. So, every day, I would go to the ATM to withdraw cash, just to make sure I am not stranded. Guess how much I paid as fees for withdrawing cash? I paid over $3 and as you know, one dollar is N365. In Nigeria, that same ATM transaction is N65. Interswitch has been in operations for almost 17 years and in that 17 years, we have not increased the price of ATM withdrawals, instead it has come
Did Interswitch apply to the CBN for a Payment Service Bank licence?
Yes, we have applied, whether we get it or not, is a different story.
Verve, your flagship product will be 10 this year, how has the journey been so far?
Verve is a child of circumstance. When we first started at Interswitch, we did want to own a card scheme, we just wanted to have a solution that can work on the networks, so we had magnetic strip cards. But around 2009, we started having fraud in the system and the central bank then said we should move to chips and pin. And if you are moving to chips and pin, with the likes of the international card schemes around, you have to build a brand. So, we started from ground zero. We observed that less than five per cent of Nigerians travel abroad, so we decided to develop the right card for the other 95 per cent. Prize was a big issue for them and being able to use it in different ways, being flexible on prizing and being able to adapt the card to meet various requirements. So, Verve was to give us the freedom to do things for Nigerians and that was why we called it the domestic scheme. When we started, a lot of banks supported Verve to do very well in the market. It is now 10 years and if a product is in the market for 10 years, then it is safe to assume that the market has accepted it. If a product gains market share year-on-year, it is a sign that the market has accepted it, so there must be something we are doing right. As I speak to you today, Verve Card is being issued in eight countries in Africa and it is accepted by about 26 countries. So, there must be something we are doing right. So, we thought that at 10 years, it is a good time to go to the next level and the next level for us, is to take Verve Card international. So, Verve Global is an attempt to create a card brand and a product for a segment where we hope that we can position it in a way that the banks would be interested in it to issue to their customers, secondly, that their customers would love it and thirdly, you will hear that abroad, in some jurisdictions, during summer periods, Nigerians are among the top people that visit, that opportunity is something Verve can tap into and that is why we created the Verve Global Card.
What is your outlook for Verve in the medium term?
We have launched Verve in the United States, our relationship with Discover takes us to about 195 countries. Apart from the United States, the United Kingdom and the Unit Arab Emirates are other places Nigerians visit a lot, so, we expect that in the next five years we should have launched Verve Cards to be used in the UK and in the UAE. Of course, very soon you will be hearing about our moves in the North African countries, where we are trying to ensure that Verve Cards are also used in those countries.