THE CEO INTERVIEW: Innovative Solutions Will Enhance Cashless Policy

(Last Updated On: August 20, 2016)

The Chief Executive Officer of VoguePay, Mr. Michael Olufemi Simeon, spoke with Emma Okonji on the need for Nigerians to explore innovative solutions that support cashless policy initiative. Excerpts:

In 2012, the Central Bank of Nigeria (CBN) came up with the cashless policy initiative. As a major player in the financial sector, what is your impression about the development of the cashless policy?

The cashless policy of CBN was a welcomed initiative at the time it was introduced, because at that time, Nigerians needed to transact without carrying physical cash. Then there was also a need to make a paradigm shift from paper-based economy to cashless economy because of the cost of printing and handling cash across financial institutions. The risk of carrying cash was also there, and all these put together, prompted the CBN to come up with that policy. Now the implementation of that policy has been on since its inception, and it has helped to reduce risk of carrying cash, among other things.
So VoguePay, which was launched almost at the same time that the CBN cashless policy was introduced, is also helping to drive cashless financial transactions, thus promoting the CBN cashless initiative.

So what would you say motivated the launch of VoguePay in Nigeria?

We were motivated by the spirit of change because we wanted to bring a change to the financial sector. We were concerned about the manner at which Nigerians were treated by foreign financial institutions, who came to Nigeria to offer services at a higher cost, while the same services were offered free of charge abroad, and Nigerians were ignorant to it. So we introduced VoguePay to address some of the anomalies in the Nigerian financial market. We saw it as a challenge to Nigeria and five of us from different backgrounds in Database Administration, Legal, Technology, Politics, and Business Administration, came together and pulled resources together to address Nigeria’s financial challenges, through the VouguePay platform.

Four years down the line since the introduction of VoguePay, what impact has the organization created on the Nigerian financial sector?

VoguePay has supported tens of thousands of businesses since its inception in 2012, enabling them to properly manage their business in a more profitable way, without spending so mush money. We have impacted on more than 17,000 newly created businesses since 2012, because we made it possible for banks to reduce their lending rates. As at 2012, when entrepreneurs go to banks to get loans, the financial institutions make it extremely impossible for them to get the loan and most of them were denied loans and their dreams and ideas were lost in the process. When we came to the market in 2012, we made it clear to people that getting loans from banks should not be as difficult as the banks made them to believe. Because of our peculiar mode of operations, banks were forced to reduce their charges on loans, even though some of them still charge high. So were able to cause a positive change in the financial sector and today, that change is still driven by competition. I use to tell people that it is only in Nigeria that people tend to take abnormality to be the norm because there are no alternatives, but this has to change.

There has been some policy somersaults within the apex bank for some time now, about allocation of forex to parents who have need to pay school fees for their children studying abroad. Are there solutions from VoguePay to address parents concerns?

We are aware of such policies that sometimes make it difficult for patents to transfer money to their children and wards studying abroad. We have developed some smart pay solutions to that effect. We have discovered that government should not be in the business of subsidising funds for parents who want to send money to their children studying abroad and even for those seeking medical care and tourism abroad. We believe that market forces should be able to resolve the challenge posed on parents. So our solution that runs on our platform, makes it easier for people to send money abroad, without paying high bank rates as charges. Our solution makes it a lot easier for parents to pay charges below what is obtained in the parallel markets.

So what is the focus of VoguePay business?

Our operations can be categorised in two areas: Collection and processing of payments, both locally and internationally on one hand and our platform also allows people to send and receive money on the other hand. So customers can convert their naira to dollar within the system and vice-versa. If for instance a customer has N100,000 in his/her VoguePay Wallet, the customer is at liberty to convert the money from naira to dollar at the existing rate, without additional charges. So with this solution, people do not need to bother government for foreign currency because they want to send money abroad in hard currency. With the VoguePay platform, what the customer needs do is to ask for the conversion of the naira to dollar equivalent or to any other preferred hard currency and it is done with ease and the customer places an order on how much should be transferred in the hard currency, and that is the beauty of our platform.

Are you saying that those that cannot access the official rate of N199 to one dollar could use the VoguePay platform for easy transfer of hard currency for educational, medical and tourism purposes?

Absolutely yes, because this is exactly what we do for our customers using the VoguePay platform for money transfers.

Does your system accept any hard currency or there are limitations?

At the moment, we are operating with five major currencies, like Dollar, Pound, Euro Yen, and Naira. What we actually do, is to provide plug and play solution for our customers that run small and medium enterprise business (SMEs), be it on bulk payment, salary payment, scheduled payment, or invoicing, we allow our flexible platform to transact such business, and we provide intelligence and security parameters for every financial transaction carried out on our platform. We also operate as middle men for the collection of payments on behalf of our customers that are into different forms of business transactions. We do training for corporate organisatons and for governments, about online business, and we offer analytical report of different financial transactions.

What differentiate VoguePay from other payment platforms like Interswitch, E-Transact, Remita among others?

VoguePay is different from other payment and switching platforms because we process certain channels that others do not process. The ability of customers to convert their naira denomination to foreign currencies, while using the VoguePay platform, is peculiar to VoguePay alone and this makes us unique, offering unique services that drive down cost of business. Again the kind of security we offer to SMEs, is the type that multinationals can invest in. I am looking at a situation where our solution will support small businesses like the orange and groundnut sellers, just the way we support big and multinational businesses like the Jumia, Konga, Yudala, among others. What makes this possible is technology and we are leveraging technology to provide services for both small and big organisations.

In terms of security, how secured is the VoguePay platform?

Our platform is highly secured and I see the platform as one of the most secured payment platforms ever. We tell banks about vulnerable transactions, which they were not even aware of. So our system easily detects fraudulent transactions and stop them immediately. We invested so much in security because we understood the gravity of losses that could occur in any financial institution when security is treated with levity. So we create a system that shows the telemetric behaviour pattern of customers. We currently work with Veridu as our international security partner, which is an internet security system that works across several platforms. We also operate with local partners and we invest heavily in security. So we use both human intelligence and security to enhance our security on a weekly basis.

Financial institutions and their customers have continued to lose huge amount of money to fraudsters. Could that be said of VoguePay?

Not at all, even though no technology is 100 per cent perfect. There are different stages of frauds but our system has been proved to be highly secured, thus giving customers peace of mind for any transaction carried out on our platform. We partner with top security companies globally. But again, most theft in financial institutions are arranged by insider staff and most time they succeed because they have studied the system for so long and understand the loopholes, which may not necessarily be the technology. So we have various levels of society checks that prevent theft, but I still maintained that there is no system that is 100 percent security proof, hence we have insurance backup.

So how can theft be addressed in a situation where organisations and financial institutions lose money to hackers?

I think the way forward is for organisations to have a reporting system between the processors, security and legal system. This is important to enable banks fully expose those that hack into their system to steal huge amount of money. So there is need for collaboration. Training and re-training of staff on vulnerabilities are also key to addressing the issue.

Some Nigerians are of view that the adoption level of cashless is slow in Nigeria, what is your take on this?

I quite agree with the school of thought who feel the adoption level is rather slow, and the reason for this is that government is engaging more of the big players in the financial sector, and neglecting the small players like the market women and men that are petty traders. This set if people need to be carried along in the implementation exercise because SMEs are the bedrock of industrialisation of any nation. The big organisations are not as flexible as SMEs and there is need to carry along SMEs in the whole exercise of cashless economy.

VoguePay recently won a pan African award. What is your vision and roadmap to explore the African market?

We see ourselves as digital payment company that is connecting people and businesses within Africa, and the rest of the world. We believe that if we have traders from Ghana and Nigeria, we should be able to connect the traders in both countries and other African countries and the rest of the world. is a leading e-payment platform that serves hundreds of thousands of small businesses in four continents, and recently, we won the best emerging online payment platform in Africa at the African Information Technology and Telecom Awards (AITTA) 2016 held in Accra, Ghana.

Launched in 2012, VoguePay offers both users and merchants an opportunity to transact without directly using their card or bank details. With tens of thousands of clients, VoguePay’s integrated solutions and services are helping SMEs to power their online payment infrastructure by offering free online payment integration to serve an estimated market audience of 20 million SMEs in Nigeria.

The award is a reflection of VoguePay’s continuous improvement, as it earlier won ‘The Best Internet Payment Platform in Nigeria” in 2014 at the maiden edition of the DotCom awards.


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