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In this exclusive interview, Ozgur Ozvardar, Vice President & General Manager for Verifone Middle East & Northern Africa, spoke with Jide Akintunde, Managing Editor, Financial Nigeria Magazine, and Director, Nigeria Development and Finance Forum, on the role of Verifone in the development of the Nigerian payment industry and why Nigeria is an important market for the company.

Jide Akintunde: The Lagos Cash-lite programme, which preceded nationwide implementation of the Cashless Policy of Central Bank of Nigeria, provided an opportunity for Verifone to enter the Nigerian market in 2012. Is Verifone’s entry into Nigeria a successful one?

Ozgur Ozvardar: Verifone, as a global leader in payment systems, has African markets firmly in its sights in order to further deepen its global reach. When you consider the huge growth in payment systems in Africa, these are definitely exciting times for the industry. People in Africa are eager for new technologies which help make life easier. That is why Verifone offers our clients the best solutions to fulfill their needs.

Nigeria is one of the most important markets for Verifone. It is growing fast and we intend to stay at the leading edge of the technologies that are powering it. We are happy with the results since the first day we started our operations in Nigeria. The country is full of opportunity and we are helping our clients to expand the usage of payment systems throughout the country. Our prime focus is not only our banking customers but also to offer multiple solutions to our non-banking customers. For example, I could point to the new voucher solutions, bill payment and tax collection solutions, government subsidies programme solutions, and so on. Thus, non-banking sectors are also important for us.

Being the most preferred payment system provider, we serve our customers with many innovative solutions. For instance, we have Verifone Mobile Money, which offers a mobile money transfer service that is not limited to smart phones. It also can be used by people with old generation phones. So this is a solution to cover all markets.

We are trusted across Africa and this trust is reflected in some of our major projects in Nigeria. For instance, the government of Nigeria approached licensed payment vendors to assist with implementation of a national identity database. The programme assigns a unique lifetime identification number to each registered person and issues national ID cards. We capture the biometric data of the cardholder and send it to the host for security identification. All the messages are encrypted in the terminal and can only be decrypted by the host, the Nigerian Identity Management Commission. These cards also act as prepaid cards with biometric and EMV capabilities (EMV is a global payment system that entails storing data on integrated circuits to make them less vulnerable to fraud), used for purchasing transactions, bill payments, P2P transfers and POS cash advances. The Nigerian government selected Verifone as the terminal vendor and tasked it with writing the application.

Additionally, we are pleased to announce that one of our MPOS (Mobile Point-of-Sale) solutions, Verifone e105, has received certification from NIBSS (Nigeria Inter-Bank Settlement System).  At the same time, our partner in Nigeria, leading payment integrator, Interswitch, has just had NIBSS approval for its PAYNOW MPOS application, which has been specifically designed to run on the e105. Together, we can bring EMV card acceptance to more retailers by enabling smaller merchants to use smartphones and tablets to take payments.  

JA: It has been three years since the launch of the Cashless Policy. One remembers that at the initial takeoff of the policy, incessant breakdown of e-payment infrastructure and system called the policy into question. It appears we have overcome that phase and payment modernization has gained traction in Nigeria. Is this the way Verifone views the Nigerian payment space?

OO: If you ask me to make a comparison between now and three years ago, I would say without any hesitation, that Nigeria has made huge progress. You would not reach this point today, if you did not have such a talented, dedicated and hardworking payment systems professionals and a government which gives full support to the Cashless Policy.  We see a bright future for Nigeria.

JA: What are the existing opportunities that appeal to Verifone in growing its business in Nigeria?

OO: We are building a connected set of solutions with devices that delight; we are providing services that are scalable, innovations that excite and an architecture that networks it all. Expansion of the Cashless Policy to all states in Nigeria makes us think that we still have a lot of things to do in Nigeria.

Biometric technology is used in government projects but it is now becoming more important in the commercial sectors. The growing safety and security problems are forcing companies from different sectors to install biometrics into their systems for authentication and identification. As a result, businesses are trying to implement technologies for process automation and are increasingly installing biometrics in newer applications.

The important vertical markets for emerging opportunities in biometrics globally include financial services, retail, healthcare, industrial, IT and telecom. According to research conducted by Frost & Sullivan, the global biometrics market is expected to have a CAGR (Compound Annual Growth Rate) of 22.5% from 2012 to 2019, compared to 7.1% for other POS terminals (2013-2018).

With our state-of-the-art solutions, we are helping our clients to expand their POS network to the other states. We are also seeing opportunities in non-banking sectors. Just by changing their way of doing business, more clients have started to benefit from our solutions either by increasing their sales or by taking their costs under control.

JA: No particular solution provider has dominated mobile payment in Nigeria like Safaricom has dominated the Kenyan market with mPesa. This suggests Nigeria is a very competitive market. What will drive the long-term performance in the Nigerian payment industry, and how is Verifone positioned for this?

OO: It is true that Nigeria is a very competitive market. We need to be proactive and offer the best innovative solutions with affordable prices. This is the reason for our success in Nigeria in the past three years.

JA: E-payment is great in terms of convenience and instantaneity. But e-payment has posed security challenge for the Central Bank of Nigeria, banks and customers. How can the rising level of fraud in the electronic payment industry in Nigeria be reduced, even if the trend in Nigeria mirrors the global pattern?

OO: As a cash-intensive economy, the Nigerian market has historically been characterised by a general lack of trust in cashless alternatives. However, the government’s Cashless Policy has been instrumental in the uptake of POS solutions. At Verifone, payment security has been our number one priority since our inception 34 years ago and we tightly integrate security into every part of our business. As the first device manufacturer on the PCI Security Standards Council Board of Advisors, we helped to create payment security standards followed by businesses everywhere. We adhere to global and regional payment security standards including EMV (Europay, MasterCard, and Visa), PCI (Payment Card Industry), and Germany's ZKA (Zentraler Kreditausschuss or Central Credit Committee). We have direct relationships with the biggest brands, expert staff that serve on compliance councils, and we even engage with other security insiders to proactively identify new risks.

JA: I am sure Verifone is interested in the macro environment apart from the micro indicators in the payment industry. How attractive do you view the outlook of the Nigerian economy?

OO: Although hit by the decrease in oil prices, Nigeria still has great potential as it possesses Africa’s biggest population and economy.