A T+0 MODEL OF CHEQUE TRUNCATION SYSTEM FROM THE CUSTOMER TO THE CLEARING HOUSE ON ANDROID-BASED SMART DEVICES

Abstract

The use of cheques in Nigerian banking industries has not been favoured recently because of the time delayed that is accompanied. There are various options of exchanging money amongst the parties involved in monetary transaction. The options include the ATM, Internet banking, mobile banking and social banking. These options have improved the customer satisfaction, also reduced the frequency of customers in the banking halls. The internet and mobile banking has greatly revolved the entire banking process, in which customer are allowed to make instant bank transfers. The national electronic fund transfer (NEFT) verify account numbers, make payments from the comfort of users homes or offices. Also, electronic card systems have given the customers the privilege make their transaction without carrying cash with the use POS terminals and payment platforms such as Mastercard, Visa, and Verve. Other Payment platforms that include: PayPal, Paga, QuickTeller have created opportunities for people to virtually make monetary transaction using various form of electronic techniques.

But with all the benefits attached to these forms of banking systems, cheque has its peculiar advantage in the sense that limit of transactions is removed. The question is how do we marry the comfort of electronic banking systems and cheque system without the delay compromise bearing in mind the peculiarity in Nigerian banking sector? Electronic Cheque system has being adopted in the Nigeria banking industry. This system was founded on the image and character recognition to scan physical cheques, with the required details to facilitate the transaction. The transaction involves the transmission of the image through a secure socket layer from the banks to the clearing house. The current Cheque Truncation system in Nigeria is currently moved from the T+2 to T+1 days of transaction. This was reviewed and re-modified. It was in line with the vision to reduce the time taken on the cheque truncation system to T+0 in 2015. A prototype system was designed on an android system. Android was preferred as a test bench because of its popularity.

The work considered the cheque truncation system in T+0 days using the mobile technologies. A transaction is completed the very day it is initiated. The process cycle starts from the payee, who deposits his cheque with their smartphone (android). The cheque captured images is processed to meet the clearing house standards. Image processing techniques for verification was then carried out. The image captured is stored in in jpeg and tiff format according to the clearing house standard. The native android application synchronizes functions with an embedded web service in providing a secure database tier and to enhance the application logic. On validation the user can verified the transaction status from their device. Hence, a complete cycle of the cheque truncation system is done. Sample tests and evaluations were carried out in line with banking rules. Specific security measures were also followed to reduce the inherent flaws. Recommendation is made to further enhance other possible security problems. This is important bearing in mind the peculiarities of Nigerian banking sectors.

The work on internet and mobile banking combining cheque system was developed on web services transactions have been able to reduce the banking system to a T-0 model.