Regulatory Alerts2007-08-03 | TED-FEM-FPC-GEN-01-95-07Request for Information on Person -to -Person Payments
Title: Implementation of a Mobile Payment Solution in Nigeria - Response to RFI I. Executive Summary We propose an innovative and cost-effective mobile payment solution that leverages existing infrastructure, is interoperable with multiple financial service providers, and aligns with the regulatory requirements in Nigeria. Our proposed solution meets all the outlined criteria and will significantly improve the speed, convenience, security, and reliability of cash transactions in Nigeria. II. Detailed Response 2.1 Payment Origination Process The payment origination process for our mobile payment solution is simple, secure, and user-friendly. Users can enroll with the financial service provider or telecommunication provider via a text message to accept upload software that provides a menu for the appropriate payment services. Upon enrollment, users are provided with a unique identifier for their account, ensuring secure transactions. 2.2 User Authentication and Security User authentication is done through a two-factor authentication process, involving both the use of a PIN and a one-time password sent via SMS to the user's mobile device. This ensures that only authorized users can access their accounts and initiate transactions. Additionally, our solution employs encryption techniques to protect sensitive user data and transaction details from unauthorized access or interception. 2.3 Transaction Processing Our proposed solution utilizes existing banking infrastructure for card-based transactions, ensuring compatibility with multiple financial service providers. Transactions are processed in real-time, providing instant confirmation of payment to both the sender and receiver. The use of mobile technology enables users to conduct transactions from virtually anywhere, at any time, without relying on POS terminals or limited ATM infrastructure. 2.4 Pricing Model To encourage widespread adoption of our mobile payment solution, we propose a pricing model that closely aligns with the perceived cost of cash transactions. We believe that offering competitive fees and no hidden charges will incentivize both merchants and consumers to adopt our solution as their primary means of conducting transactions. Our proposed business model for charges from Scheme Provider to Service Provider ensures transparency, fairness, and sustainable growth for all stakeholders involved. 2.5 Interoperability and Scalability Our mobile payment solution is designed to be interoperable with multiple financial service providers, telecommunication companies, and handset manufacturers. This allows for seamless integration into existing banking systems and enables our solution to scale up as demand increases. The use of a centralized database ensures that transaction records are accurate, up-to-date, and easily accessible, further enhancing the reliability and efficiency of our payment solution. 2.6 Infrastructure Considerations Our mobile payment solution utilizes existing infrastructure where possible, minimizing the need for costly investments in new technology or physical structures. We also plan to leverage the rapidly expanding mobile usage in Nigeria, which currently stands at over 60 million handsets. By focusing on mobile-to-mobile payments, we can take advantage of this growing trend and offer a payment solution that is both accessible and convenient for Nigerian consumers and merchants alike. 2.7 Practical Experience Our team has extensive experience in implementing similar mobile payment solutions in developing countries, where infrastructure limitations and financial challenges are common obstacles. We have successfully deployed such solutions in various regions across Africa, Southeast Asia, and Latin America, resulting in significant improvements in transaction speed, security, and accessibility for millions of users. III. Conclusion Our mobile payment solution addresses the key requirements outlined in the RFI by leveraging existing infrastructure, ensuring interoperability with multiple stakeholders, providing a user-friendly and secure authentication process, and offering competitive pricing models. By focusing on the needs of Nigerian consumers and merchants, we believe that our innovative and cost-effective payment solution will significantly improve the cash transaction landscape in Nigeria, enabling rapid growth and sustainable development for all stakeholders involved.