E-payment transaction growth and the implications for your money

A few days ago the National Bureau of Statistics (NBS) released very positive numbers on e-transaction. The NBS report showed that e-payment transactions which include ATM, POS, internet banking and mobile banking, have grown to 238.8 million worth N18.2 in the third quarter of 2016. What the numbers indicate is that more and more people are using electronic and online channels to transact their businesses and make payments. Stakeholders such as Gbenro Dara, managing director of Efritin.com say it was a combination of consumer needs, government’s desire to boost financial inclusion and reduce the use of cash. “Despite the slowdown in the economy retail, continues to grow driven primarily by an emerging middle class who are increasingly comfortable with online payment options. Also, the growth is driven by mobile/ internet penetration driven by Smartphone sales. We find that more people are upgrading their phones to smartphones and transacting on them via various payment options. Merchants who did not offer these various payment options are also forced to provide these or risk losing their customers to

We find that more people are upgrading their phones to smartphones and transacting on them via various payment options. Merchants who did not offer these various payment options are also forced to provide these or risk losing their customers to competition,” Dara said. Use of online payment channels like internet and mobile banking saw remarkable growths in terms of volume (3.5 million from 2.5 million for internet and 10.8 million from 8.6 million for mobile banking). Again, it is an indication that many people are using these channels instead of the traditional methods. Should you be worried about the growth? The clear winners for growth in e-transaction include the government that earns VAT on almost every transaction you make. For every payment you make the government earns a fee as value added tax. The other winners are the owners and providers of the channel. For instance if you ordered a product from Jumia.com and did a transfer or swiped your debit or credit card, Jumia earns a fee and the owners of the platform also earn a fee.

The customer however only wins from the convenience and speed e-payment transaction provides. The fact growth was recorded in the last quarter does not necessarily imply the cost you incur for transacting with these channels will reduce automatically. It might attract more organised businesses to come on board and eventually leading to marginal decrease in cost of transacting online. Importantly growth in epayment volume takes the concern for security a notch higher. The more people are transacting online the more systems and processes are exposed to cyber security threats.

Recent trends in cyber crimes which have seen supposedly secure platforms breached make the threat even more urgent. A few days ago, David Isiavwe, chairman, Information Security Society of Africa-Nigeria (ISSAN) buttressed this point by noting that the security situation in the world has become so terrible that Distributed Denial of Service (DDoS) attack kit could now be bought for as low as $5. Thus, you as the customer have a responsibility to protect your money. Take steps like resetting your password and making it more secure than it is. Do not put out your information on any online platform. Consider the security of a transaction, especially when you are dealing with an unfamiliar web retailer. It is safer to do some research on the vendor you are going to be exchanging money over the internet with. If the site requires you create an account to complete a purchase, pick a unique password instead of recycling one you use elsewhere. Click any link you are sent with caution. Be sure you know the recipient. Clicking on a shortened link in an email could send you to a spoofed site intended to collect personal data or trigger a malicious download. If you are in doubt, open a new window and type in the shipper, bank or retailer’s web address to check up on a sale or purchase.