ENLIGHTENMENT FORUM
on the implementation of
END-TO-END ELECTRONIC PAYMENT OF
SUPPLIERS, TAXES, SALARIES & PENSIONS
Payment Systems Vision 2020
1
DECEMBER
13, 2011
Forum Objective
Supplier, Taxes, Salaries & Pensions
To further enlighten and carry-along
PUBLIC SECTOR stakeholders
on the implementation of
end-to-end electronic payment of
Suppliers, Taxes, Salaries & Pensions
Payment Systems Vision 2020
2
Presentation Outline
1. Overview of NPSV 2020
Supplier, Taxes, Salaries & Pensions
2. Suppliers, Taxes, Salaries & Pensions Initiative
3. Complying with e-Payment Directives
4. Stakeholders’ Roles & Responsibilities
5. Responsibilities, Infractions & Sanctions
6. Some Benefits of e-payment
7. Implementation Time Table
8. Next Steps
9. Summary
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
SECTION 1:
Overview of NPSV
Payment Systems Vision 2020
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Overview of National Payments Systems Vision 2020
Supplier, Taxes, Salaries & Pensions
National Payments Systems Vision 2020

CBN in collaboration with key stakeholders in the Nigerian
Payments community developed the National Payments
Systems Vision 2020 (NPSV 2020)

NPSV 2020 is a sub-set of the Financial Systems Strategy
2020 (FSS 2020)
Global Objective of NPSV 2020
To develop a payment system that is
nationally utilized and internationally recognized
Payment Systems Vision 2020
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Realising NPSV 2020
Supplier, Taxes, Salaries & Pensions
For ease of implementation, NPSV 2020 was broken into
11 distinct initiatives











Person to Person
Consumer Bills Payment
Government Suppliers
Taxes
Salary & Pensions
Securities Settlement
Cards
RTGS
Cheques & ACH
Legal
West African Monetary Zone (WAMZ)
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
Suppliers, Taxes, Salaries & Pensions Payments Initiative
3 of the initiatives with similar target audiences and
execution approaches have been harmonized to become
the NPSV 2020 Suppliers, Taxes, Salaries &
Pension e-Payment initiative
Focus of the Harmonised Initiative:
The development and operation of an enduring
framework for end-to-end electronic payment of
Suppliers, Taxes, Salaries and Pensions
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
SECTION 2:
Overview of Suppliers,
Taxes, Salaries & Pensions
e-Payment Initiative
Payment Systems Vision 2020
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Suppliers, Taxes, Salaries & Pensions Payments Initiative
Supplier, Taxes, Salaries & Pensions
What is End-to-End electronic Payment?
Straight through, electronic processing
of a payer’s instructions to effect
payment to a beneficiary’s bank account
… right from the comfort of your office
Payment Systems Vision 2020
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Suppliers, Taxes, Salaries & Pensions Payments Initiative
Supplier, Taxes, Salaries & Pensions
End-to-End electronic Payment
of Suppliers, Taxes, Salaries & Pensions
Seamless, straight through, electronic processing and
payment of ALL FORMS of Suppliers, Taxes, Salaries &
Pensions directly into beneficiary bank accounts and
electronic remittance of associated schedules with real
time feedback and status monitoring of payments by
public and private sector organisations in Nigeria
… right from the comfort of your office
Payment Systems Vision 2020
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Suppliers, Taxes, Salaries & Pensions Payments Initiative
e-Payment Initiative Scope:
Supplier, Taxes, Salaries & Pensions
All Public & Private Sector Organisations who need to pay:
Suppliers: All organisations
Taxes:
All Organisations
Salaries:
Organisations with 50 staff & above
Pensions: Organisations with 50 staff/pensioners & above
*Contributory Pension & Pensioners
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
SECTION 3:
Complying with Suppliers,
Taxes, Salaries & Pensions
e-Payment Directive
Payment Systems Vision 2020
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Complying with the e-Payments Directive
Supplier, Taxes, Salaries & Pensions
CBN has worked with various
stakeholders over the last
couple of years to ensure
adoption of e-Payment is as
easy as A-B-C
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
Complying with the e-Payments Directive

Presidential Directive - January 01, 2009

Pilot Implementation (e-manual)
–
Manual Mandates & Schedules allowed

Nationwide Stakeholders Engagement

Full-fledged Implementation
–

No Manual Cheques, Mandates, or Schedules
Compliance Monitoring
Payment Systems Vision 2020
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Complying with the e-Payments Directive
Supplier, Taxes, Salaries & Pensions
 Simple Infrastructure Requirements
– Computer/laptop/iPad/etc.
– Internet or VPN Connectivity
Payment Systems Vision 2020
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CBN Approved e-Payment solution – What to look out for
 Approved by CBN
Supplier, Taxes, Salaries & Pensions
 Available for use at customer premises
 Transparent Tariffs and charges
 Supports multi-bank operations
 Clear issues/dispute resolution processes
 Open to CBN for online monitoring & Supervision
CBN will not recommend any e-Payment solution.
Our concern is compliance of approved solutions with
recommended standards.
Payment Systems Vision 2020
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CBN approved e-Payment solution - What to look out for
1. Comprehensive Functionality
 End-to-end processing from your office

No CD, Flash disk or email transmission of data
 Approval Work-flow
Supplier, Taxes, Salaries & Pensions

Replicates your existing payment approval processes
 Account Details Validation

Account details are tied to account owner/No Duplicate owners
2. Robust Security
 Role-Based security

System Access based only user role
 Value-Based Security

Supports Amount Approval limits
 Soft, Hard or Biometric token

Payment Systems Vision 2020
Combination of: Unique User profile, Transaction Specific ID,
Biometric Validation, etc.
18
CBN approved e-Payment solution - What to look out for
3. Reporting
 Audit Trail
Supplier, Taxes, Salaries & Pensions

Records of ALL activities of each user
 Unique Transaction Reference

Each transaction must be uniquely identified
 Transactions Status Monitoring

Status available to you at any time without calling your bank
 Notifications/Advice

Send payment notice to beneficiary
 Historical Reports

Payment Systems Vision 2020
Online Reports must be available on transactions for minimum 3 years
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Supplier, Taxes, Salaries & Pensions
SECTION 4:
Stakeholders’
Roles & Responsibilities
Payment Systems Vision 2020
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Stakeholders’ Roles & Responsibilities
 Public & Private Sector Organisations
Supplier, Taxes, Salaries & Pensions
 Suppliers/Employees/Pensioners/Labour Unions
 OAGF/States’ Accountant General
 FIRS/States Board of Internal Revenue
 Deposit Money Banks
 e-Payment Solution Providers
 PENCOM/Pension Fund Administrators/Custodians
 Professional Bodies/Audit, Tax, Consulting Firms
 Corporate Affairs Commission
 CBN
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
SECTION 5:
Responsibilities,
Infractions & Sanctions
Payment Systems Vision 2020
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Infractions & Sanctions
Supplier, Taxes, Salaries & Pensions
Public & Private Sector Organisations
S/
N
1
Action
Compliance
Infractions
Sanctions
• Adopt a CBN approved end-toend solution for e-payment of
suppliers/taxes/salaries/pensions
• Compliance charter
submitted to CBN
• Annual Report & Audit
to indicate compliance
with e-payment
directive
Use of
manual/automanual system to
pay
taxes/salary/pensio
n and suppliers
Organization shall be
charged N2000 per
item of payment done
using manual/automanual system
2
• Bear the cost of e-payments of
Suppliers/taxes/salary/pension
without passing it to the
beneficiary.
• Where any other arrangement
exists it must be mutually agreed
between the payer and
beneficiary
• Account/Finance
officers to ensure
beneficiaries receive
actual amount due to
them.
Charging
employees/
/pensioners/supplie
rs for the cost of epayments
Refund deducted fees
to the beneficiary at
twice the prevailing
lending rate
3
Verify correctness of Bank Details
submitted by Suppliers/Tax
Agencies/employees/pensioners/
• Relate with banks/PSP
to obtain accurate
account details of
beneficiaries
Refusal to verify the
correctness of a
beneficiary’s bank
details from their
bankers
Organization shall be
liable for losses arising
from payments made
into a wrong account
due to non-verification
of submitted account
details.
Payment Systems Vision 2020
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Infractions & Sanctions
Beneficiaries
(Employees/Pensioners/Suppliers/Tax Agencies)
S/N Responsibility
Supplier, Taxes, Salaries & Pensions
1
2
3
Compliance
Verify that payments received
from bank or employer is not in
excess of the actual amount
due to the beneficiary
• Report any case of
wrong OR multiple
receipt of payments to
the relevant
payer/bank within 24
hours.
• Where that is not
achievable, the excess
should be left
untouched till it is
retrieved by the payer
who has been notified.
Verify payments does not fall
• Report any shortfall in
short of the actual amount due
payments received to
the appropriate office
within 24 hours
Ensure taxes/salary/pension
and supplier payments
received are satisfactory
Payment Systems Vision 2020
Infractions
Sanctions
• Refusal to report any
payment received in
excess of the actual
amount due to the
beneficiary within 24
hours
• Beneficiary shall
refund excess
amount at twice
the prevailing
lending interest
rate to the payer
• Refusal to report any
shortfall in payments
received by
beneficiary within 24
hours
• Report any complaints • Refusal to report any
to appropriate office in
grievances or
the organization and
complaints to
the CBN
appropriate office in
the organization and
to the regulatory
authorities
24
• Beneficiary shall be
liable for damages
suffered due to
failure to report
until report is made
• Beneficiary shall be
liable for damages
suffered due to
failure to report
until report is made
Infractions & Sanctions
Deposit Money Banks
Supplier, Taxes, Salaries & Pensions
SN Responsibility
1 Ensure confidentiality of
information of e-payment of
taxes/salary/pension/suppliers
Compliance
Infractions
Sanctions
• Set up monitoring tools to report • Intentional or
• DMBs shall be charged a
any compromise of confidential unintentional exposure penalty of N10m for
breach of confidentiality
data in the system. Information
of beneficiary’s esystem audit to ensure
payment data to third
compliance
parties
2
Ensure beneficiaries open bank
• Payments of
account or e-purse with the bank
taxes/salary/pension and
(not applicable to corporate
suppliers to be made into
customers)
beneficiary’s bank account or
e-purse only (payment not
allowed into 3rd party account)
3
Make Available/verify bank
account details of tax
agencies/employees/pensioners
and suppliers at the request of
the employers and other banks
4
Ensure e-payment of
taxes/salary/pension and
suppliers are achieved
successfully within stipulated
timeline
Payment Systems Vision 2020
• Any payments not
made directly into
beneficiary’s bank
account or e-purse
• Bank shall be charged a
penalty of N50,000.00
against each payment
item for non-compliance
• Verification to be made in line • Refusal to comply with • Bank shall be liable for
with the KYC &KYB requirements the KYC &KYB
losses arising from
requirements when
payments made into a
verifying account
wrong account due to
details
noncompliance with
KYC & KYB requirements
• Report any cases of failed
• Refusal to report cases • Bank shall be charged
transaction, incomplete
of failed transaction,
25% of the total
payment,
incomplete payment,
unsuccessful payments
unsupplied/unreturned
unsupplied/unreturned not reported.
payments to the originator and
payments to the
beneficiary within 24 hours
originator and
beneficiary within 24
hours
25
Infractions & Sanctions
e-Payment Solution Providers
Supplier, Taxes, Salaries & Pensions
SN Responsibility
Compliance
Infractions
Sanctions
1
Ensure confidentiality of
Set up monitoring tools to
taxes/salary/pension/supplier e- report any compromise of
payment
confidential data in the system.
Information system audit to
ensure compliance
Intentional or
unintentional exposure of
beneficiary’s e-payment
data to third parties
PSP shall be charged a
penalty of N10m for
breach of confidentiality
2
Ensure all payments made
through the PSP systems agrees
with payer’s mandate
Make available/Provide epayment transaction
statements available to paying
organization
Refusal to grant access or
make e-payment
transactions statements
available
PSP shall be charged a
penalty of N50,000.00 per
day for the period report
is delayed to the CBN
3
Ensure the availability, integrity
and security of the system and
data processed
Set up monitoring tools to
report any compromise of
secured data in the system.
Information system audit to
ensure compliance
Intentional or
unintentional exposure of
beneficiary’s secured
data to third parties
4
Ensure that all e-payments of
taxes/salary/pension and
suppliers are achieved
successfully within stipulated
time
Report any cases of failed
Refusal to report cases of
transaction, incomplete
failed transaction,
payment,
incomplete payment,
unsupplied/unreturned
unsupplied/unreturned
payments to the originator and payments to the originator
beneficiary within 24 hours
and beneficiary within 24
hours
Suspension of epayment processing by
the PSP for 3 months and
until data availability
integrity & security are
established with
evidence of such
PSP shall be charged 25%
of the total unsuccessful
payments not reported.
Payment Systems Vision 2020
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Infractions & Sanctions
Supplier, Taxes, Salaries & Pensions
Other stakeholders
S/N Stakeholder
Responsibility/Action
1
CBN



2
CAC

3
Professional
Accounting
/Audit/Tax firms and
Associations


OAGF/States
Accountant General


4


5
PENCOM

6
FIRS/SBIR

Payment Systems Vision 2020
Approve/ license qualified e-payment services providers
Create awareness about e-payment and the e-payment initiatives
Carry out oversight function over the DMBs and PSPs on compliance
with the guideline on e-payment of taxes/salary/pension and supplier
Communicate to organizations at the registration point that they are
expected to disclose compliance with e-payment of
taxes/salaries/pension/tender/supplier where such organization has 50
and above employees
Communicate to members the new requirement
Amend guidelines/reporting/disclosure of standards to recognize epayment
Ensure their customers provide statement of compliance with epayment directives in their annual audited statements
Ensure all Government payments are made through e-payment
Issue Guidelines & Circular and ensure they are in compliance with the
CBN guidelines
Partner with the CBN and ensure that MDAs fully complied with the
guidelines
Ensure all remittances to PFAS/PFCs with associated electronic
schedulers and payments to pensioners are done through e-payment
Ensure payment/collection of all taxes are done through approved epayment solutions/platforms
27
Supplier, Taxes, Salaries & Pensions
SECTION 6:
Benefits of e-Payment of
Suppliers, Taxes, Salaries
& Pensions
Payment Systems Vision 2020
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Some Benefits of e-Payment
Supplier, Taxes, Salaries & Pensions
JAMES DANJUMA
12/12/2011
Robbers kill one, cart millions away
from micro finance bank
Dare devil robbers last weekend attacked a micro finance
bank in Batsari Council Area of Katsina State, killing one
person and carting away millions of naira.
The stolen money, which was deposited earlier in the day,
was for the payment of salaries of state workers in the
area.
Payment Systems Vision 2020
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Some Benefits of e-Payment
 Safety of funds & lives
Supplier, Taxes, Salaries & Pensions
– No undue attention, bullion vans, security escorts, etc.
 Improved operational efficiency
– Reduction in manual processes and associated errors
 Make Payments at anytime from anywhere
– weekday/weekend/public holiday/day/night
 Monitoring of Transactions every step of the way
– No need to call account officer or wait endlessly
 Comprehensive Payment Records Database
– Tax Payers, Suppliers, Employees, Pensioners, etc.
Payment Systems Vision 2020
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Some Benefits of e-Payment
 Reduced cost of consummating transactions
– Saves time, effort, stationery, stress, etc.
Supplier, Taxes, Salaries & Pensions
 Improved transparency & accountability
– Historical records of every single transaction
 Easily increase IGR
– Effortless collection of different taxes & revenue
 You are in good company
– Many public & private sector organisations have already
embraced e-payment
 Promoted & Backed by Government
– It’s nice to be in Government’s good books!
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
SECTION 7:
Implementation
Time Table
Payment Systems Vision 2020
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Implementation Time Table
Issuance of Guidelines by CBN
Supplier, Taxes, Salaries & Pensions
 August 2010
Stakeholders Engagement & Awareness Campaign
 January to December 2011
Implementation Commencement
 January 2, 2012
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
SECTION 8:
Next Steps
Payment Systems Vision 2020
34
Next Steps
 Contact a CBN approved provider OR your bank
Supplier, Taxes, Salaries & Pensions
for an e-Payment solution TODAY
 Provide basic e-Payment infrastructure
 Activate selected e-Payment solution
 Train relevant staff on use of new system
 Commence use of your e-Payment system
 STOP manual cheques/mandates/schedules for
payment of suppliers, taxes, salary & pension
 Endorse compliance charter & send copy to CBN
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
SECTION 9:
Summary
Payment Systems Vision 2020
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Summary
Supplier, Taxes, Salaries & Pensions
End-To-End Electronic Payment of
Suppliers, Taxes, Salaries & Pension
commences Nationwide on
January 2, 2012
…BE PREPARED
Payment Systems Vision 2020
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For more Information
Supplier, Taxes, Salaries & Pensions
Primary Contact: Sam Okojere
Email:
scokojere@cbn.gov.ng
Phone: 08037850757
Website: www.cenbank.gov.ng
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
Payment Systems Vision 2020
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Supplier, Taxes, Salaries & Pensions
Payment Systems Vision 2020
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