Nigerian blockchain-enabled payments infrastructure provider Zone has teamed up with the Nigerian Inter-Bank Settlement Scheme (NIBSS) to leverage blockchain technology for managing Point-of-Sale (POS) terminal transactions. This partnership aims to improve transaction reconciliation, reduce fraud, and expedite dispute resolution for participating banks and fintechs by providing access to a decentralized blockchain ledger.
Currently, POS transactions involve multiple intermediaries, including Payment Terminal Service Aggregators (PTSAs) and payment switches, which often create silos in communication. These silos can lead to delays in resolving disputes and reconciling transactions, especially during system downtimes. Zone, which is a payment switch, simplifies this process by embedding PTSA functionality into its blockchain system, allowing seamless transaction verification on the blockchain network.
NIBSS will integrate its existing PTSA functions into Zone’s blockchain system, creating a harmonized database that better serves the payments ecosystem. Zone’s blockchain solution had previously been applied to automate teller machine (ATM) transactions, but expanding to POS payments required collaboration with NIBSS due to regulatory requirements.
Zone’s CEO, Obi Emetarom, noted that the success of this blockchain-based solution depends on widespread adoption by banks and fintechs involved in agency banking. Currently, over 30 financial institutions are integrated with the Zone network. The company is offering its integration service at no upfront cost, hoping to incentivize more institutions to join the platform.
However, scaling transaction throughput remains a critical challenge. While blockchain technology provides transparency and security, some layers experience delays in achieving transaction finality, potentially slowing the movement of funds. Despite this, Zone reports a transaction success rate exceeding 99%.
Zone envisions a transformative impact on Nigeria’s payments ecosystem. Within five years, the company aims to reduce POS-related fraud, including chargeback disputes, by more than 99%, setting a new standard for payment security and efficiency.
