For BD Insider, letter 117, we will cover:
- CBN’s directive to demand indemnity for online transfers above ₦1 million
- Zipline’s Nigerian debut in Kaduna
- Swvl partly halts operations in Kenya
CBN reminds banks (and PSPs) to adhere to modalities of high-value transactions
What’s the news? 10 days ago (May 26, 2022), the CBN reminded NIBSS and other electronic payment facilitators to do the following with respect to high-value transactions:
- implement indemnity acceptance via paper or electronic means, based on the customer’s preference
- For e-indemnity sign-off, stricter controls must be put in place like biometric authentication
- adhere to multi-factor authentication (MFA) per transaction
- inform and educate customers on the use of indemnity to increase transaction limits, where applicable
What we call high-value transactions is what the CBN calls “Highly Secured Online Funds Transfer”. I guess the name explains itself—it’s ‘highly secured’ because the value of the transaction is ‘high’.
Who is affected? The following parties are affected:
- individuals (you & I) and corporates (businesses and organisations)—in how high-value transfer instructions are passed
- payment solution providers (PSPs)—in providing the (digital) rails for banks and OFIs to adhere to the indemnity requirement
- Banks and other financial institutions—in withholding value (and working with PSPs) to fulfill the indemnity requirement.
What does it mean for you? Once this circular is completely implemented, your transfers of ₦1 million will require that you pre-fill an indemnity form issued by your bank. Regardless of indemnity, you will not be able to move more than a certain amount of money. Previously, the maximum instant transfer amount for an individual was ₦5 million, now it’s ₦25 million, while for a business, the maximum instant transfer amount is now ₦100 million.
There is no limit on how much you can receive into your account.
Going deeper: The latest memo from the CBN is a review of a 2014 Circular to all Banks titled “The review of operations on the NIBSS Instant Payment (NIP) system and other electronic payments options with similar features”.
At the time (2014), the Banking and Payments Systems Department led by the Director, ‘Dipo Fatokun was one at the CBN. In 2018, the CBN decided to break up that department into two: Banking Services Department (BKSD) and Payments System Management Department (PSMD) to “promote credible, reliable and efficient payment systems”. Today, the PSMD at the CBN is led by Musa Itopa Jimoh, who is the Director of the department.
The 2014 memo set out 12 directives, with the first and major one being a tabular breakdown of online funds transfer categorisation from “low security to highly secured transfer”.
In this reminder memo, not much changed. The two most outstanding updates we see are:
- flexibility in how to collect indemnity. Previously, the rule was to get a “written indemnity” which implied paper-based collection. Now, the apex bank has said indemnity can be captured digitally or in paper form, subject to the conditions we stated above.
- increase in individual and maximum transfer limits. We’ve already discussed this above
All other points about customer education and the need for MFAs were already captured in the 2014 memo.
The recent memo doesn’t specify when compliance is required by banks and PSPs. But because this is not a new directive, we can aspect the attention parties to start implementing it right away.
Zipline’s drone delivery service kicks off in Kaduna, Nigeria
Zipline, a US robotics and drone company has launched its first Nigerian distribution centre in Kaduna State. In 2021, Zipline announced a partnership with the Kaduna State Government to use drones to make on-demand medical deliveries in the state.
Why it matters: “We’re aware of how difficult it is to transport medicines across Kaduna due to incidences of banditry, insecurity, and instability. To just move a few medical products from Kaduna city to the west of Kaduna, you need a military convoy. The [residents] there are really in a very difficult position”, Daniel Marfo, the Zipline’s Senior Vice President for Africa said.
The miniature unmanned aircrafts used by Zipline fly high enough to be out of sight from potential vandals. Marfo said that “in the worst-case scenario when someone shoots one down, you cannot use it for anything.”
Despite a ₦1.2 billion Aerial Monitoring System launched by the Kaduna state government in 2019 and the presence of the most critical Nigerian military establishments in the state, insecurity has remained a major challenge in the state in recent times.
Prior to Zipline’s launch in Nigeria, the company started its first African operations in Rwanda in 2016. As of 2021, Zipline reached 200,000 commercial deliveries and catered for 75% of the blood needs outside Kigali, Rwanda’s capital. Its services are also available in Ghana.
What’s next?: In the coming months, Zipline will launch in Cross River state and the Niger Delta region. It will also establish two more centres in Kaduna.
This is partner content
Swvl partly halts operations in Kenya
Swvl has announced that its daily and city-to-city rides in Kenya will be halted due to the global economic crisis. Swvl Daily, Swvl Travel, and Swvl Business are the three services offered by the country’s mass transport and shared mobility providers.
What you need to know: Swvl Daily offers intra-city rides in Nairobi, while City to City rides was designed for long-distance travel and Swvl Business was designed for business trips. Swvl now says it’s suspending Swvl Daily intra-city and Swvl Travel rides indefinitely. Swvl Business will still be operating.
In 2019, Swvl launched in Kenya. With the partnerships of over 500 bus owners, Swvl covers 300 routes to over 55 destinations in Kenya. This recent decision will affect about 100 staffers involved with the Kenyan operations. Swvl has also shut down its operations in Pakistan.
Last week, Swvl announced its plan to lay off 32% of its workforce to optimize its operations. “The reduction follows an extensive evaluation of team redundancy and how this complements our strategy,” Swvl’s CEO, Mostafa Kandil said.
Tech startup deals
Last week, African tech startups raised over $18.2 million.
Untapped Global’s $10.3 million pre-seed was the highest fund raised last week.
Will African tech startups collectively raise up to the $1.8 billion that was raised in Q1 2022?
We’ll watch even as funding has slowed down globally.
Find an overview of some of last week’s funding deals below.
For more on deals in Africa, we’ll be opening up our database very soon. So, keep an eye out for it.
Noteworthy
Here are some of the interesting stories that we’ve come across in the past week:
- A deep dive into Getwallets’ pivot to Orchestrate, which signals a shift in the African payment landscape
- Elon Musk’s Starlink will impact Nigeria’s economy. How?
- Play-to-Earn gaming adoption to double in Nigeria. Really?
- Investors poured into Africa’s startup funding frenzy. Now they’re taking their time. Why?
- How two Africans overcame bias to build a multi-billion dollar startup. Find out!
Job Opportunities
Opportunities in Product & Design, Data & Engineering, Admin & Growth.
Product & Design:
- Lemonade Finance — Senior Product Manager (Lagos, Nigeria)
- Kuda — DevOps Engineer (Ghana)
Data & Engineering:
- Stears — Senior Frontend Engineer (Nigeria)
- Google — Software Engineer, Research (Accra, Ghana)
Admin & Growth:
- Klasha — Head of Sales (Lagos, Nigeria)
- Mastercard Foundation — Country Program Head (Lagos, Nigeria)
