Banking in today’s world has gone beyond what it used to be a couple of years ago. Some of this is a result of improved methods of operation. However, most of the industry’s advancement comes from the exciting new technologies coming onto the scene. One such technology within the Nigerian banking space is the NIBSS.
What is NIBSS?
NIBSS is a multi-mode electronic payment system. It is designed to facilitate the digitized payment operations occurring across local banks.
The technology features a range of operators. As you imagine, there are the obvious ones such as banks and other financial institutions (OFIs).
There’s also room for players like Financial Technology (FinTech) companies, Mobile Money Operators (MMOs), and Payment Solution Service Platforms (PSSPs).
What is fascinating about the NIBSS is that the technology is an industry-owned product. This is unlike many software and technological infrastructures out there. It means that when it comes to the NIBSS, no individual, bank, or company can claim ownership of the system.
Even more fascinating than the above is that the NIBSS is not just a product, but also a registered firm.
With this, the NIBSS is both a firm and a product owned by all Nigerian banks including the Central Bank of Nigeria. Other industry stakeholders also have some claim over the system given its nature.
What NIBSS stand for
NIBSS is short for “Nigeria Inter-Bank Settlement System”. The word “Nigeria” defines a focus area for the operation of the system. Secondly, the term “inter-bank” denotes that the system operates among banks. And what does it all do? The entire system comes together to make digital fund transfers and settlements possible.
History of NIBSS
The Nigeria Inter-Bank Settlement System was established in 1993 with the firm’s incorporation. However, it wasn’t until June 1994 that major operations began.
Not much development occurred within the next eight years. Finally, In 2002, the Nigeria Automated Clearing System (NACS) was implemented. This set the way for a series of innovations spanning more than a decade.
Guidelines for e-banking were drawn up in 2003. Just the following year, a new method for clearing cheques was already in use, and in the next two years, the Real-Time Gross Settlement System (RTGS) was launched.
Three years went by and in 2009, the Mobile Payment Regulatory Framework was issued. This came along with guidelines for both Transition Switching and Stored Value as well as the establishment of a Direct Debit Rule.
A big bold change happened beyond this. It was the migration of the entire Nigerian banking system to EMV cards. EMV cards are a product of the Europay, Mastercard, and Visa consortium. They possess microchips and operate on what has become a global standard for processing payments.
Part of the NIBSS history includes the introduction of charges on cash transactions in 2012. By the next year, guidelines for agent banking were developed. There was also the issuance of the along with Payment Card Industry Data and Security Standards for compliance and lastly, a second release of the Payment System Vision 2020.
Functions of NIBSS
As it stands, the NIBSS serves a pivotal role in the success of the Nigerian financial system. There are lots of ways in which this happens.
Technological Adoption:
NIBSS has existed for more than twenty-five years. There’s no way the firm would be dealing with the same set of technologies for all that time. The history section above even confirms this.
A look at the NIBSS history shows that countless new techs have emerged and the inter-bank settlement system continues to adopt what it finds useful.
Take the adoption of EMV cards for example. The move by NIBSS pushed all local banks to accept and integrate these cards into their systems. This is a clear case of how the NIBSS functions in driving technological adoption across the finance industry.
Standardization:
Standardization occurs because all Nigerian banks are adopting the same technologies as the NIBSS. Moreover, standardization becomes clearer as every bank uses the same guidelines, frameworks, and tech simultaneously.
Interoperability:
We have mentioned that the NIBSS is an industry-owned product. Technically, this means one thing. All institutions within the industry would have to find a common ground for the use of the product.
The interoperability function of NIBSS stems from having such common use. It prompts banks to communicate with each other and partner towards delivering payment services across the country.
Furthermore, since the NIBSS serves as a backbone for online payment, banks can use it as a collaborative tool to fight fraud.
NIBSS portal
Users trying to access the NIBSS portal can jump to their official website or make use of the log-in page. The NIBSS portal is so-called because it opens the door to vast information, services, and products.
It offers six unique services. They are Payment Services, Collections, Data & Identity Services, Payment Innovation, Nigeria Central Switch, Special Projects, Payment Terminal and Application Certification, and Bank Verification Number(BVN).
In addition, users can access several really helpful resources. These include the latest banking and finance news, national payments data and analytics, and NIBSS media documents,
Staying true to its name, the NIBSS portal maintains some useful links. This can be found at the bottom footer. Some of them are to the firm’s partners, available career opportunities, and a link for users to access training. There’s also a support centre link for people who might need clarification on the platform’s functions or services.
Which Bank Uses NIBSS
Ideators of the NIBSS envisioned a system that would be integrated across all Nigerian banks. This includes every single commercial bank within the country.
However traditional banks are not the only ones uplinked and active on the platform. As pointed out in the reviewed NIBSS scheme, several unique financial industry players also utilize the inter-bank system.
This blankets commercial banks such as First Bank, Guaranty Trust Bank, and United Bank of Africa. It also equally covers Opay, PalmPay, and the like.
How to Use NIBSS Instant Payment
The NIBSS Instant Payment or NIP, is a service that delivers instantaneous payments. The aim is to create smooth seconds-fast transactions, driving business value and customer experience.
Designed with accessibility in mind, users can make use of the NIP platform in a variety of ways. The available options are USSD, POS and ATM, mobile banking, web platforms, and third-party channels.
How to Check if NIBSS is Down
While the interbank settlement service generally operates smoothly, occasional downtimes, like any technology, may occur.
In the event of NIBSS transfer service disruptions, banks or associated services typically inform their customers of the downtime and recommend refraining from initiating transfers until the service is restored, which may take up to 2 hours or even a full 24 hours.
Your bank will promptly notify you of any such downtimes, and you may also become aware of them if others around you are experiencing failed transfers from various banks.
NIBSS vs BVN
BVN stands for “Bank Verification Number”. Of course, this is starkly different from the NIBSS as the former is a number whereas the latter is an entire digital system.
How to Validate your BVN on the NIBSS Website
Want to confirm your BVN? That is possible on the NIBSS portal. Here is the step-by-step guide to getting your BVN validated.
Open the NIBSS portal by typing https://www.nibss-plc.com.ng/ into your browser or clicking on it
Register with your details or log in if you have an existing account
Once in, proceed to click on “Services” at the top footer
Scroll along the drop-down menu and click on “Bank Verification Number”
Another way to confirm your BVN is by using the NIBSS USSD validation service. The code to dial for this is *565*1#.
After hitting the “send” button, you will be directed to input the BVN number you want to validate. The system will return with the name registered to the BVN.
Conclusion
NIBSS continues to record a growing number of transactions. In addition, the system has seen an impressive count of new payment agents across Nigeria.
The ability of the inter-bank system to facilitate transfers across multiple operators is a testament to its success.
Judging by the direction of the firm over the last decades, there’s one thing we can say for sure. It is that the firm is making good on its core values of innovation, collaboration, integrity, and customer-centeredness.
