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.
Executive Director, Finance & Development
Total Nigeria Plc was incorporated in 1956 and was listed on the Nigerian Stock Exchange in 1979. Today, the company has over 500 service stations, five liquefied petroleum gas bottling plants, three lubricants blending plants, and numerous other facilities spread across the country. For over 50 years, Total Nigeria Plc has remained the leader in the downstream sector of the Nigerian oil and gas industry and employs around 470 people.
in partnership with
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.
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.