Photo of Steve Elms, Citi and James Ajose, Total Nigeria.

This relates to an e-Billspay solution that enables Total Nigeria’s merchants to lodge payments via 8,000 bank branches across Nigeria irrespective of Total’s relationship banks. The solution has addressed many of the challenges faced by the company when collecting from its 500+ service stations across the country.

The challenge

Total Nigeria faced a number of challenges associated with collections from over 500 service stations that paid for their supplies via one of Total Nigeria’s 12 relationship banks across the country. The process of transporting cash to a bank branch, presenting a deposit slip to a receipting officer at one of eight Total Nigeria sales offices nationwide so the payment could be reflected on the merchant’s account with Total before shipment could be approved had inherent problems. These could be summarised as follows:

• Distance to banking services and associated security challenges. Some dealers had to travel as far as 100km to get to a Total relationship bank.
• Delays in receipt of funds and payment information.
• Information regarding lodgements not available to all relevant staff. The sales function, which is responsible for releasing consignments, was dependent on information provided by treasury.
• Risk of fraud.
• Non-alignment of collections process across various banks. Treasury had to frequently check all of its accounts and transfer funds to different banks manually to meet obligations to pay its suppliers or salaries, for example.
• Cost of cash-in-transit (CIT) and running collections process.
• Manual reconciliation difficulties.
• Banks charging high fees on debit.

Amidst the current depression in the oil and gas sector, Total was keen to review their treasury process with a view to enhance their working capital cycle and cash flows, as well as reducing the bank charges. The team wanted to streamline its process of lodging deposits, making it more convenient for their merchants, as well as eliminate errors and bottlenecks in the collections process by automating the process end-to end. Total also wanted to eliminate fraud associated with counterfeit deposit slips and to seek opportunities to reduce the security risks associated with cash handling and transportation.

In addition, Total Nigeria was eager to align its collections strategy with the policy of Nigeria’s Central Bank (CBN), which is encouraging greater use of electronic payments and collections.

The solution

Total Nigeria worked with Citi to develop a solution to address its challenges. The solution deploys the NIBSS Electronic Bill Payment Product (E-Billspay) that enables Total Nigeria’s merchants to lodge payments via 8,000 bank branches across Nigeria, irrespective of whether they are a relationship bank. E-Billspay is an account number-based, online real-time credit transfer product that enables customers to make payments by leveraging the security provided by banks. The E-Billspay service can be provided through payment channels such as internet banking, mobile banking and kiosks, by using the NIBSS Instant Payment (NIP) platform that all banks in Nigeria are connected to.

The award certifies that in Total Nigeria in general and especially in the Finance Division, we have talented, innovative, cross-functional and dedicated staff. It is an international recognition which we are very proud of. We have worked very hard to develop/implement these solutions that resulted in material savings for the company, that strengthens the internal control and that simplifies our cash management process. The award is also an incitement to continue the innovation journey.

As a result, there is seamless straight through processing (STP) from the initiation point to receipt by the beneficiary. Merchants now also make lodgements using point of sale (POS) terminals and automated clearing house payments.

The E-Billspay solution is fully integrated with Total Nigeria’s Auto Receipting System so that when a lodgement is made and Total Nigeria’s bank account is credited, its internal accounts are automatically updated. Real-time company-wide notifications and integration into its auto receipting system means Total Nigeria now releases its goods sooner, which has boosted sale numbers, enhanced reconciliation, improved sales, contributed to a boost to economic activities and alignment to regulation.

Best practice and innovation

Best practice has been demonstrated in achieving streamlined collections and reduction in security risk and cash handling cost. Total Nigeria now offers convenience and ease of payment in a way which compliments their receipting process, all of which improves service delivery, sales and reconciliation. Besides, the E-bills solution coupled to our auto-receipting solution allows Total Nigeria Plc to direct to Citi all or part of funds today collected by other banks, in other to benefit from better bank conditions offered by Citi. Other banks had therefore to realign their bank conditions.

Wilfried Konde, Executive Director, Finance & Development, Total Nigeria says: “Since the implementation of E-Billspay for Total Nigeria in September 2015, the company has received about $30m from approximately 9,000 transactions via this channel. The proportion of collections received via E-Billspay versus those received via other channels has steadily grown and continues to do so.”

Key benefits

• Reduction in security risk and cash handling cost.
• Reduction in overall bank charges (estimated at $3m for year 2016).
• A streamlined collections method which has increased visibility and control.
• Enhanced reconciliations.

Key takeaways

Automation of processes is key in order to improve the service to customers, enhance the internal control, reduce the administrative burden and optimise the bank charges. It also important to associate with the right business partner who can provide good advices, the right expertise and who share similar standards in terms of cost efficiency and quality of service.