Going Cashless In Nigeria
The idea of going cashless in Nigeria was seeded back in early 2012 when the Central Bank of Nigeria first rolled out their beta version of a cashless policy in the state. However, as with any other new development, this policy sparked mixed feelings among Lagosians, as they are fondly called. That is because usually, Nigeria is a nation whose economy relies on paper. That means citizens prefer to get paid with cash for their products or services.
Well, the world we live in today is now digital. Any economy that still believes in running on paper and physical cash may lag in growth. The Nigerian Government understands this, and on June 16, 2020, the Central Bank of Nigeria implemented the cashless policy in the country. The policy sets a limit for all cash transactions. And any individual or company that crosses the limit will pay a processing fee. And like you are correctly thinking, there will always be different opinions.
June 2020 is eight years after the pre-testing of the policy. The question is what happened between now and then? What changes can foster this cashless policy? We have listed and explained some advatanges of going cashless in Nigeria. More so, we'll highlight some benefits and challenges of the cashless policy in Nigeria.
Going Cashless in Nigeria: How is CBN helping the people?
The first thing you need to know is what the government is doing. That's because you don't expect someone used to cash transactions to wake up one morning and become digitally inclined. It would be best if you had put some things in place. Let's look at what the Nigerian government put in place for the citizens;
Automated teller machine.
The ATM, as it's fondly called, was first introduced to the world in 1967 by John Sheperd Baron, an inventor from Britain. Nigerians first blush with an ATM came in 1986 when Societe Generale Bank installed in the lobby of their Lagos headquarters. The ATM has arguably become one of the most essential inventions of the previous century globally. The device allows you to perform herto bank based cash transactions and pay some bills without needing another human.
Point of sale device
Between 2012 and 2020, there has been a steady increase in Nigerians who purchased point of sale machines for business purposes. As of 2017, the Central Bank had facilitated distribution of over 126,608 points of sale devices. The leadership introduced this device to help citizens pay for products in stores without cash. As at time of this blog post, the growth and widespread availability of POS devices means that they are now effectively dispensing more cash to Nigerians than ATMs.
If you're a Nigerian living in Canada or any part of the world, you have most likely sent money to Nigeria via the internet. You may have used mobile money, internet banking or a myriad of bank or fintech led applications. These transactions go on on the internet without involving cash or a human. Not only has this development eased the transfer process, but it has also helped cashless transactions.
Advantages of Going Cashless in Nigeria
Since the cashless policy spread across Nigeria, there have been many advantages. Some of which include
If you're familiar with Nigeria, you will agree that the country has insecurity issues. So, going about with cash makes one an easy target for hoodlums and armed robbers. However, with the introduction of the cashless policy, people have been able to gain a modicum of safety in their day to day dealings. The armed robbers do not have easy access to the victim's cash if it’s sitting on a encrypted ATM card, or in a bank account, and when they use modern transfer methods, investigations can trace them.
Back in the day, you couldn't purchase from a Nigerian store without cash. But with the different payment and withdrawal options, you can easily make payments or get some money to pay.
Thousands, if not millions of Nigerians have started businesses out of the throes of the cashless policy. The number of firms operating withdrawal and transfers with point of sale machines is so much that you can hardly walk the full length of a street without seeing one.
Barriers of Going Cashless Policy in Nigeria
Almost every policy works well for some people and is disadvantageous for others. If we're honest, the cashless system has many advantages. On the other hand, the policy has some challenges. Some of which include;
- Bad power generation.
- Slow internet connections.
- Network issues.
- Bank processing fees.
- Scrappy data back-up.
Going cashless in Nigeria will continually help citizens with easy transactions. Also, it allows Nigerians in the diaspora who still send some money home. However, it will always take a little while for the citizens to get used to this new development. However, the pandemic taught all of us the need for mobile money and the digital economy. It's wise as a Nigerian living abroad to find a trusted platform like N2Xpress or any other to make cash transactions.