By Babajide Komolafe
The one per cent transaction fee charged on all transactions through the Federal Government’s Treasury Single Account is shared among Remita, banks, the Central Bank of Nigeria (CBN) and other payment operators involved. Recall that on Wednesday the Senate had ordered its joint Committee on Finance, Banking and Other Financial Institutions and Public Accounts to probe the allegation that the e-collection agent, Remita, had been paid 25 billion, being the one per cent commission it charged for the transfer of N2.5 trillion of Federal Government funds to the TSA.
Though Remita is the electronic payment platform adopted for the TSA, banks, and other payment platforms are all part of the transaction value chain. These include; banks, debit or credit card processors, POS terminal providers, mobile wallet platform owners, switching platform owners, and payment gateway technology providers.
Vanguard investigations revealed that while there is indeed one per cent transaction fee charged on all inflows and outflows through the TSA, the money is shared among the payment electronic platforms, banks, CBN and SystemSpecs, which owns Remita.
Transaction fees is a common feature of electronic payment transactions. An example is the N65 fee charged by banks when customers of other banks use their ATM. Also, there is N100 transaction fee charged on all money transfers transactions in the banking industry including payment of bills such as DSTV subscriptions, flight tickets etc.
The one percent transaction fee charged for TSA transaction was based on agreement between the CBN, payment platforms and the Federal Government. This is reflected in a CBN circular to all banks dated December 17th, 2013, which stated, “A fee of 1% of funds collected is payable. This includes solution provider and participating bank fees”.
Further investigations also reveal that the fee sharing arrangement under the TSA states, “For E-payment: A tariff of N100 per million naira transaction, with 40 percent to CBN, and 60 percent to SystemSpecs.” “For Collections: A tariff of 1% of funds collected shall be charged for the government revenue collections, to be shared as follows: Platform Owner/SystemSpecs-50 percent; Collecting Agents/ Participating banks-40 percent; CBN-10 percent.
Vanguard also gathered that the 1% TSA transaction fee is one of the lowest in the industry. Also, when compared with the pre-TSA regime where government was earning 0% interest on its funds outside the CBN and paying about 15% on government borrowings in terms of bonds, the 1% TSA fee is a better bargain for the Federal Government.
Furthermore, the 1% charge on collections is in huge contrast to what obtained before TSA where various MDAs independently entered into different collection contracts with different providers of collection services with charges in some instances being over six to ten per cent in some cases. This was in addition to holding of government funds outside of government control in some instances for as long as 90 days.