Zone, a company specializing in blockchain-based payment infrastructure, has entered into a strategic alliance with the Nigeria Inter-Bank Settlement System (NIBSS), with the goal of integrating Payment Terminal Service Aggregator (PTSA) capabilities into Zone’s blockchain technology. This collaboration is poised to enhance the seamless interaction and functionality among various entities within the point-of-sale (PoS) payment ecosystem.
The significance of this partnership is twofold. Firstly, it ensures that NIBSS, which operates as a pivotal clearinghouse within Nigeria’s banking framework, will now be an integral component of Zone’s blockchain payment network. This development follows Zone’s recent announcement regarding the introduction of a pioneering PoS payment gateway powered by blockchain technology.
The innovative PoS payment gateway positions Zone as a novel type of PoS payment switch. Unlike traditional systems that facilitate the transfer of card transactions from the merchants’ banks to the cardholders’ banks, Zone’s blockchain network enables member institutions to conduct transactions directly with one another, bypassing conventional intermediaries.
Furthermore, the collaboration with NIBSS empowers Zone to execute PTSA functions. These functions are crucial for ensuring that PoS terminals adhere to the required technical and operational standards. The PTSA license category was created by the Central Bank of Nigeria (CBN) in response to the need for greater transparency and efficiency in payment processing. As per the CBN’s regulations, all licensed financial service providers are mandated to channel their PoS transactions through a PTSA.
As a result of the partnership with NIBSS, any institution that becomes part of Zone’s blockchain network is automatically endowed with PTSA status. This allows these institutions to not only participate in the blockchain network but also to fulfill the role of a PTSA, thereby streamlining their transaction processes and adhering to the regulatory standards set forth by the CBN.
The blockchain payment network developed by Zone boasts an innovative feature that significantly enhances the user experience: the automated resolution of chargebacks. Zone has elaborated on this functionality, explaining that it enables the system to process refunds for transactions that are declined almost instantaneously. Moreover, the network can confirm the final status of each transaction in real-time. Zone is confident that this capability will markedly improve the satisfaction of cardholders by providing a more efficient and responsive service.
It is important to note that Zone made a significant stride in the payment gateway landscape by launching a blockchain-enabled PoS payment gateway in June 2024. This gateway was designed to assist banks and fintech companies in executing payments with the unique ability to route transactions directly to the issuing institutions. Zone takes pride in its product, touting it as the first decentralized PoS payment gateway on the African continent.
While Zone is not the only player in the field of PoS payment gateways—with other prominent entities such as Interswitch, Unified Payments, and eTranzact offering similar services—what sets Zone apart is its decentralized architecture. Unlike its competitors that rely on centralized systems, Zone’s gateway operates on a blockchain framework, which ensures a more secure, transparent, and resilient infrastructure.
Commenting on the partnership with Zone, Premier Oiwoh, the Managing Director and CEO of NIBSS, expressed optimism about the transformative potential of this collaboration. He highlighted the anticipated benefits, including heightened operational efficiency, cost reductions, and the promotion of financial inclusion across the region.
Echoing these sentiments, Obi Emetarom, the CEO and co-founder of Zone, emphasized the revolutionary impact of blockchain technology in the payment industry. By leveraging this technology, Zone aims to establish a new benchmark for payment solutions that are not only reliable and seamless but also universally interoperable, thereby setting a new paradigm for payment systems in the industry.
In a further development that underscores the growing acceptance and integration of Zone’s innovative payment solutions, July 2024 marked a significant milestone for the company. Three prominent financial institutions—First Bank, UBA (United Bank for Africa), and Zenith Bank—made the strategic decision to integrate with Zone’s decentralized payment network.
This integration signifies a notable endorsement of Zone’s blockchain-based payment infrastructure from some of the leading banks in the region. By joining Zone’s network, these institutions are not only embracing the advantages of blockchain technology, such as enhanced security and transparency, but they are also positioning themselves at the forefront of the evolving digital payments landscape.
For First Bank, UBA, and Zenith Bank, the move to integrate with Zone’s network means they can now offer their customers a more streamlined and efficient payment processing experience. The decentralized nature of the network facilitates direct transaction routing, which can lead to faster settlement times and reduced reliance on traditional, centralized payment switches.
The adoption of Zone’s platform by these banks is a testament to the network’s robustness and its capacity to meet the demands of major financial players. It also reflects a growing trend in the financial industry towards the utilization of decentralized systems that can offer improved performance, cost savings, and a more inclusive financial ecosystem.
Zone’s expansion through these integrations is likely to encourage further adoption by other financial institutions, paving the way for a more interconnected and efficient payment infrastructure that benefits all stakeholders in the financial sector.
