How we developed Remita: John Obaro

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The Managing Director of Nigerian Fintech company, SystemSpecs, John Obaro has described how the company developed what has become its flagship product, Remita, which is the technological backbone of the Federal Government’s Treasury Single Account(TSA)

Obaro spoke during a recent interview with Thisday. According to him, Remita was initially a software to manage pension payments.

” About twelve years ago when the PENCOM Act was enacted, we saw that those processing payrolls will need to prepare schedules for different PFAs (Pension Fund Administrators). That was when we conceived Remita.

“We found a way to move salaries from the employers’ bank accounts to the employees’ bank accounts, irrespective of where they are. At the same time, we started thinking of how we could deliver schedules to PFAs and PFCs as well as pay tax. That was how we started the first version of Remita. I will probably call it Remita 001. It was well received, I remember we launched the product then with Late Fatai Rolling Dollar, we just wanted to use him to represent pensioners.

“After we had conquered the payroll payment space, we went for a presentation at a multinational firm and the expatriate finance director made an observation: “This is a very good product, it will help me to meet salary payments, but I have a lot of other payments. Do you mean that I will continue to do those payments manually? It is going to create confusion to have some processes automated, some manual.” That day, we lost the deal but went back to the drawing board; we started brainstorming on how to include vendor payments. That was how we created a solution that will not only do bulk payments for salaries, but also do single payments for vendors. That solution laid the foundation for our involvement in the implementation of Nigeria’s Treasury Single Account, TSA.”

Obaro said the biggest challenge that SystemSpecs had working on the TSA was that they probably came ahead of our time.

 ” As at the time we implemented the Treasury Single Account, not many people understood what it was about, so we became a victim of the backlash of that development. Initially, a lot of negative emotion was whipped up because people were not willing to listen or understand the value that Remita was bringing to the table.”

Obaro said there was a bit of controversy about the Remita charges charge too.

” Remita, banks and the Central Bank of Nigeria share 1per cent transaction fee, which is actually a non-issue in the overall scheme of things both in terms of international pricing or even in terms of local pricing. Most PoS payments in Nigeria are 1.5per cent, only recently was it reduced by CBN but generally it is 1.5per cent and outside the country you will get rates above 3per cent.

At 1per cent, it was an excellent deal for government but because many people didn’t understand what we were getting, there was an uproar. It was further compounded by the fact that many people see SystemSpecs as apolitical and that if you’re going to play in that terrain you need strong political presence. But we felt no, there is a place for politics and there is a place for professionalism. Now, more people now understand what TSA has done for the economy and we remain proud that an indigenous company is behind this. Just before we came in, the previous government had decided to delay TSA for at least another two years because they believed that there was no technology that could support it. We showed that it could be done, it was quite some rigorous process to reassure the CBN and foreign consultants that we could handle the project. We feel very proud and happy that we were able to pull it through.”


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