The Nigerian Financial Technology Firm, VTNETWORK LIMITED Receives Regulatory Approvals to Pilot Central Bank Digital Currency Payments in Nigeria
VTNETWORK LIMITED, a long-standing mobile payment operator (MMO) and international money transmission operator (IMTO) is one of the leading fintech companies in Nigeria and the pioneer of cutting-edge innovations, with deep and consequential APIs that the industry players, both domestic and global, have relied on to power financial services in Nigeria since 2012.
What is eNaira? According to the IMF, “Like coins or cash, the eNaira is a liability of the Central Bank of Nigeria (CBN). The eNaira uses the same blockchain technology as Bitcoin or Ethereum and, like them, the eNaira is stored in digital wallets and can be used for payment transactions; and it can be transferred digitally and at virtually no cost to anyone in the world with an eNaira wallet or second layer wallets provided by mobile payment operators like VCASH. There are, however, important differences. First, the eNaira features stringent access right controls by the central bank. Second, unlike these crypto-assets, the eNaira is not a financial asset in itself but a digital form of a national currency and draws its value from the physical naira, to which it is pegged at parity.”
The eNaira was first launched by CBN in October 2021 with initial access through commercial banks. With this announcement, VTNETWORK LIMITED, with its mobile payments brand VCASH, has opened a second access layer API to allow straightforward integration of eNaira services. This newly released API allows partners and merchants to perform a number of activities such as onboarding new eNaira wallets and transferring eNaira back and forth between mobile money wallets, other eNaira wallets, and bank accounts, all within the same API. Remittance companies, merchants, and fintech can integrate the simple endpoints and join in this new pilot.
Dr. Peter Ojo, CEO, and CTO of VTNETWORK LIMITED explained that the effort behind developing these APIs was in recognition that central bank digital currency is here to stay and that it must operate in harmony with legacy payment channels. “Nigeria has very advanced financial infrastructure and sophisticated participants,” explained Dr. Ojo. “As one example, the eNaira complements the Nigerian Inter-Bank Settlement System which will benefit from the reduced network congestion now caused by smaller and nested transactions that will soon more readily flow through eNaira.”
CBN expects the eNaira to bring multiple benefits which are to materialize gradually as the eNaira becomes more widespread, such as via this API. One immediate change will be the prospect to increase financial inclusion. In its first year, the eNaira wallet was provided only to people with bank accounts, but with this new API, the eNaira coverage will expand to anyone with a mobile phone even if they do not have a bank account. Access to the eNaira should gradually increase financial inclusion and facilitate more direct and effective implementation of social welfare programs.
Soon to follow will be the facilitation of remittances. Nigeria is among the key remittance destinations in sub-Saharan Africa, with remittance receipts amounting to well over $20 billion annually for each of the past several years and the services are expensive. “Nigerians, like the rest of their sub-Saharan neighbors, pay very high fees,” said Dr. Ojo, “and eNaira at full deployment can help address this by making it easier for the Nigerian diaspora to remit funds to Nigeria by obtaining eNaira from international money transfer operators and transferring them to recipients in Nigeria by wallet-to-wallet transfers at a fraction of the cost.”
The eNaira’s full potential is not entirely a technical exercise and to be realized also requires supportive regulation and monetary policy actions. The IMF says that exchange rate reforms, including a unified market-clearing rate, that reduce the gap between official and parallel market exchange rates would enhance the incentives for using eNaira wallets to send remittances. Central bank digital currencies such as the eNaira have the potential to facilitate cross-border payments, local government allowance disbursement, and global eCommerce at scale when fully deployed. The new VTNETWORK LIMITED API allows many participants to step into the future today. It is this vision that the company hopes to capitalize on while piloting eNaira for local payments.
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About VTNETWORK Limited
VTNETWORK LIMITED is a leader in Nigerian payment services. It developed its platform in 2007 after several years of processing transactions led to research into the peculiarities and challenges of electronic commerce in Nigeria. Its patent-pending mobile payment platform has been tested in Nigeria since 2007 with over 6 million registered users and is fully licensed by CBN for mobile payments and international money transfers. The platform is unique due to its hybrid nature, the redundancy of its fully-fledged capabilities, and the management knowledge of Nigerian digital consumers. It serves both m-payment and e-payment needs in the Nigerian marketplace. For more information, visit www.virtualterminalnetwork.com
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Media Contacts:
Michael Bakare
VTNETWORK LIMITED
+ 234 813–899–4140
michael@virtualterminalnetwork.com
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