Operators dump GSM for CDMA in point of sale transactions

DESPITE the growing challenges occasioned by poor network connectivity in the country, the adoption of Point of Sales (PoS) terminals for payment for transactions in Nigeria appears to be on the upward swing, a boost to the Central Bank of Nigeria (CBN) cashless initiative.

The Guardian gathered at the weekend that to beat the growing connectivity challenges, most PoS operators are switching from the Global System for Mobile (GSM) technology to the Code Division Multiple Access (CDMA) platform, which is considered stronger, faster, and more reliable in terms of Internet connectivity. Already, PoS transaction in the country is nearing the 200 per cent mark, as it is currently firm at 191 per cent.

PoS terminal is an electronic device used for verifying and processing credit card transactions and works typically by transmitting data over a standard telephone line or an Internet connection (wired or wireless). Currently, most services at PoS terminals in Nigeria are provided with connectivity through GSM Subscriber Identity Module (SIM).

A telecommunications expert, Kehinde Aluko, explained that the PoS terminals use the GPRS service of the network (the GSM service provider) to communicate with the network infrastructure of terminal deployer, in this case, CBN licensed Payments Terminal Service Providers (PTSP) and National Central Switch as Payments Terminal Service Aggregator (PTSA).‎

Aluko said the difficulties in getting transactional data and transmit same accordingly are causing great discomfort to users, merchants and payments terminal service aggregators.

According to him, if immediate authorization is not available at the time the card was processed, the payment is stalled and therefore the transaction would be incomplete. “There are times that the banks would have debited your account after swiping your card and inputing your data on the terminal, but the fund failed to get to the PTSP and in the process, arguments and counter arguments brewed,” he stated.

The Executive Secretary and Chief Executive Officer (CEO), Electronic Payment Providers Association of Nigeria (EPPAN), Mrs. Onajite Regha, however said the challenges bedeviling PoS transactions in the country were being addressed by the relevant authorities. She confirmed to The Guardian that PoS operators are gradually dumping the GSM technology for non-reliability to embrace the CDMA platform for improved connections.

While making reference to a Nigeria Interbank Settlement System (NIBSS) report, Regha said despite the several hiccups in transactions, the use of PoS has grown tremendously over the past few years since cashless policy was introduced.

Regha said NIBSS, in its findings, discovered that payment through PoS terminals rose by 191 per cent to N241 billion in 2014. “We find that more people are willing to use PoS terminals for small value transactions but a major constraint is with connectivity. The payment service providers continue to work hard to ensure that this challenge does not overtake the efforts that is being put in and there are a lot of discussions going on within.

“We are aware that NIBSS is in discussions with the telecommunications operators and solutions are been sought to resolve this challenge. You will agree with me that marked improvements have been noticed with all the new innovations being employed by various providers,” she stated.

The EPPAN boss disclosed that currently in the industry, there is a shift from the use of GSM technology, General Packet Radio Service (GPRS) to CDMA. According to Regha, CDMA technology is best suited to deliver data service and it offers safe communication channel. She added that CDMA network is m uch more stable than the GSM or GPRS network.