Central Bank of Nigeria expands SWIFT as method for payment adoption

Nigeria has become the twentieth country in Africa to adopt SWIFT for its domestic payments as well as its international payments infrastructure, according to a press statement from the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

SWIFT is a member-owned cooperative that provides technology to connect more than 10,000 financial institutions and corporations in 212 countries and territories. Globally, SWIFT is relied on by several clearing and settlement systems in more than 90 countries, carrying more than 240 million payments a year.

Recently, the Central Bank of Nigeria has switched to this system for high value payments, or payments of large amounts, as part of its ‘Payment System Vision 2020’ (PSV2020) that calls for nationally utilized and internationally recognized payment systems.

Benefits of this move are set to include financial institutions and corporations who can use the same SWIFT connection for both domestic and international payment traffic plus reusing existing infrastructure further reduces the costs of the system.  SWIFT also says the move is a key step for Nigeria within the West African Monetary Zone, a group consisting of six countries: Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.

This zone has plans to introduce a single currency and use a common payment system in order to boost regional trade and investment. Currently, payments systems in Gambia, Ghana, Nigeria and Sierra Leone are already live on SWIFT. “The support of SWIFT and all other stakeholders for the development of the national payments system is most needed not only in Nigeria but also in the WAMZ region,” said Dipo Fatokun, director, banking and payments system department, Central Bank of Nigeria.

Fatokun concluded by saying, “The importance of the payments system in any market economy cannot be over-emphasized. In particular, the link between the efficiency of the payments system, the effectiveness with which monetary policy is conducted, the soundness of the financial sector and, indeed, the overall performance of the economy is very strong…   Thus, central banks the world over have more than cursory interest in the development of payments and settlement systems.”

Source: ITWeb Africa