The Nigerian blockchain payment infrastructure, Zone has partnered with the Nigerian Inter-Bank Settlement Scheme (NIBSS) to incorporate blockchain technology into Point-of-Sale (POS) terminal payments.
All participating financial institutions will have access to the blockchain ledger containing the recorded transactions, enabling smooth transaction reconciliation. According to Zone, this would aid in decimating customer wait time, settling disputes, reducing chargeback, and eliminating other POS-related fraud.
In POS transactions, payment switches and PTSAs work together to process payments. PTSAs handle local interactions between the terminal and cardholder, while payment switches act as central hubs, routing transaction data, and facilitating bank settlements. This collaborative process ensures smooth and secure POS transactions.
Reconciliation between banks becomes difficult when “downtimes” halt communication. However, Zone’s decentralized blockchain ledger can effectively reduce the communication path for processing POS transactions.
We’ve built the PTSA functionality into the blockchain network so that every node on the blockchain can perform these checks. The PTSA (NIBSS) will use that function to screen payment terminal transactions which they perform today on a central system.
Obi Emetarom, Zone CEO
Zone had initially incorporated its blockchain technology into automated teller machines (ATMs) before developing a module blockchain system to implement POS transactions. However, ATM transactions do not require PTSA.
According to Zone CEO Emetarom, the only way the blockchain-based PTSA would work is if applied on a large scale, requiring a lot of banks and Fintechs with interest to come on board. Zone has currently integrated over 30 financial institutions with the Zone network.
By providing free integration services, Zone aims to attract banks and Fintechs to its platform, hoping that the positive experience will lead to long-term partnerships.
However, Zone and the NIBSS worry about the transaction volume on its systems, as there is possibly a need for the startup to scale up its infrastructure to accommodate the growing volume of daily digital payments.
The only issue with it is transaction throughput. Some blockchain layers take about 5 minutes to reach finality, and the receiving party cannot access the money until then, causing a lag in moving money around.
An anonymous blockchain developer