The partnership between the Nigeria Inter-Bank Settlement System (NIBSS) and Zone represents a significant step forward in integrating blockchain technology into mainstream financial systems. NIBSS is set to utilize Zone’s blockchain network to enhance its Payment Terminal Service Aggregation (PTSA) operations, a key regulatory function in Nigeria that ensures all payments made at Point-of-Sale (PoS) terminals are routed through an aggregator before reaching the cardholder’s bank for authorization. This system is crucial for maintaining oversight and compliance with the Central Bank of Nigeria’s (CBN) payment standards.
By adopting blockchain, NIBSS is decentralizing its PTSA function, which will eliminate the existing single point of failure in transaction routing. This move not only enhances the security and efficiency of the payment process but also preserves and potentially improves the regulatory monitoring and reporting capabilities mandated by the CBN.
Zone’s blockchain network, which includes some of Africa’s largest banks, offers several advantages, including decentralized routing that allows direct exchange of financial messages between banks without intermediaries, real-time settlement for instant transaction finality, and automated reconciliation features that help resolve disputes preemptively in real-time. This partnership is expected to significantly enhance the efficiency of Nigeria’s payment systems, reduce costs, and promote financial inclusion.
NIBSS’s involvement in Zone’s blockchain network is a pioneering move that could inspire similar initiatives globally, showcasing how traditional financial institutions can collaborate with fintech innovations to improve regulatory oversight and operational efficiency. This partnership aligns with broader trends, such as Central Bank Digital Currency (CBDC) pilots and other blockchain initiatives, indicating that blockchain technology is poised to play a central role in the future of global finance.
NIBSS MD/CEO, Premier Oiwoh, emphasized that this partnership represents a milestone in driving innovation and positioning Nigeria at the forefront of the global payment space. Similarly, Obi Emetarom, CEO and Co-founder of Zone, highlighted the transformative potential of blockchain technology in enhancing regulatory oversight and improving service delivery within the financial sector. As digital and decentralized financial systems continue to evolve, such collaborations between traditional financial entities and blockchain technology are likely to shape the future landscape of global finance.
Source: businessinsider.com
