Why Nigerian financial institutions need NIBSS Instant Payment.

NIBSS Instant Payment is a gamechanging system facilitating instant transactions for Nigerian financial institutions. Oradian’s flexible and extensible model-first core system can be integrated with NIP, supportng outgoing and incoming inter-bank transfers. But what makes NIP such a vital tool for Nigerian neobanks and lenders?

If you’re a financial institution operating in Nigeria, you’re probably familiar with NIBSS – and with the gamechanging payment system it facilitates.

The Nigeria Inter-Bank Settlement System has been operating since 1994. It is owned by all the licensed banks in the country, including the Central Bank of Nigeria itself, and was established to facilitate fast, effective inter-bank transfers with its own proprietary payment system – NIP.

NIBSS Instant Payment (NIP) is NIBSS’ secret weapon. Underpinned by world-class banking infrastructure, it is the electronic payment system that enables banks to provide real-time funds transfer services to their end clients based on their bank account numbers.

Playing a pivotal role here is the Central Bank of Nigeria, which regulates payment systems like NIP. NIBSS collaborates closely with the CBN to ensure the NIP service aligns with its regulations, promoting a secure and reliable financial ecosystem.

What does NIP do?

Before the arrival of NIP, the ability to transfer funds between financial institutions in Nigeria was extremely limited. This imposed a severe barrier to growth.

NIP changes all that. It allows banks to make real-time funds transfer services available to their end clients, using a whole variety of digital platforms, from internet banking to mobile payments. It enables swift, seamless transfers across multiple channels, straight from sender to recipient.

Using NIP, banks can eliminate the bottlenecks preventing efficient inter-bank transfers, boosting their own growth and performance.

What are the benefits of a NIP integration?

But what exactly makes integrating NIP so important for Nigerian financial institutions.

The greatest and most obvious benefit of NIP is the ability to reliably send and receive money from any bank account in the country, instantly, seamlessly, and at any time of day, but it also has a number of specific benefits.

  • Speed and convenience: traditional interbank transfers often took hours or even days; with NIP it’s instant, ensuring timely payments and reducing delays
  • 24/7 access: NIP operates 24/7, ensuring transactions occur instantly and in real-time, even beyond the traditional banking hours that have typically constrained financial activity in Nigeria
  • Enhanced efficiency: by enabling prompt transfers and instant access, NIP improves cash flow management for end-clients; this is crucial for payroll, supplier payments, and urgent transactions
  • Reduced transaction costs: NIP is substantially cheaper than using other third-party vendors, minimising costs to banks and boosting their bottom line.

This is transformative not just for the financial institutions providing it, but also for the businesses and consumers whose financial independence has suddenly been unlocked.

Small financial institutions like neobanks and digital lenders can gain a serious edge by integrating NIP, helping them to scale and grow by enabling instant transfers and payments.

What is Oradian’s NIP service?

Oradian’s flexible and extensible model-first core system can be integrated with NIP. Available to Nigerian customers, Oradian’s NIP integration supports outgoing and incoming inter-bank transfers.

The edge Oradian’s service gives customers in particular is that it is merely one part of an advanced, best-in-class core system designed to enable customers to grow and scale.

That means users can use NIP to enable instant financial transactions within the Nigerian financial system while also using a reliable, flexible, and extensible core system that helps them to serve clients at scale.

Oradian has also undertaken refinements and built improvements to the way it communicates with the NIP system, covering many different uses cases. In this way, Oradian takes all the benefits of NIP and ensures a much more stable, reliable service.

As a prerequisite for any NIP service, Oradian also offers Nigerian Uniform Bank Account Number (NUBAN) generation, allowing customers to define products that must have NUBAN as standard, including NIP. These numbers are generated by Oradian’s system.

Oradian’s NIP integration allows multiple transaction types. Among the most useful is “Name Enquiry”, which allows customers to detect situations in which the originating customer specifies the wrong beneficiary account. This provides an essential level of security and reliability, ensuring clients can compare the intended beneficiary with the beneficiary provided before confirming a transfer.

By adopting NIP through Oradian’s core system, lenders, neobanks and a whole variety of other financial institutions can operate swiftly and efficiently, serving more clients than ever before and boosting their ability to grow and scale.

Rather than relying on third parties, Oradian gives you full ownership of your relationship with NIBSS, while we take care of the technology behind it.

To find out how Oradian can give you an edge using NIP, get in touch today.

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