By Atiku Ibrahim
It has been over a period of time the Central Bank of Nigeria (CBN) introduced the cashless policy with the aim of reducing the quantum of physical cash in circulation. According to the CBN governor Godwin Emefiele, the policy was also targeted at tracking money laundering activities as well as cut down on cash handling expenses of banks. Emefiele, had noted last year that with the several investments in technological infrastructure in the Nigerian banking industry which has made electronic payment near seamless, it was high time the country went fully cashless. The CBN Governor On October 26, 2022 announced that it was going to redesign the N200, N500 and N1, 000 denominations and urged Nigerians to swap the old naira notes with the new ones. Moving the deadline from January 31 to February 10 with a ten days grace period, the policy is generating more reactions from Nigerians as the new notes are scarce despite assurances by the apex bank that the banks should continue to load their ATMs with the new notes.
This scarcity has affected so many areas of the economy especially the small and medium scale enterprises, petty traders etc. unlike super markets and big retailers who already have POS machines and other means of exchange for their transactions, and have evolved going about their businesses with very little need for cash, the SME’s and petty traders who sell your everyday goods and services rely solely on cash transactions to keep their businesses going, this is as a result of the fact that they sell their products and services in small quantities, up until now there has been no solid and derived means to find alternative ways of collecting money from their customers. However this new cashless policy by the CBN has brought about the need for adaptation in order for their business to continue. Going to the market by an everyday Nigerian has become a challenge with the recent scarcity of cash, petty trade sellers and buyers have had to resort to the digital means of exchanges, like bank transfers, CBN approved transaction platforms like Opay, PalmPay and POS transactions. This mode of transaction comes with challenges which include slow network, delay in receiving credit and debit alert and some banks not having network at all.
In other cases, some businesses are so small that the business owners don’t have a bank account, in such situations they end up selling only to customers who have cash, for instance in situations where you want to buy vegetables worth N200 or pay for a service as little as grinding tomatoes without cash in most cases prove abortive, and with very few people holding cash at the moment this business suffer from a huge decline in sales. Their situation where local POS owners are in market places receiving payments for goods and services on behalf of the seller with charges included for both the buyer and the seller. Cashless transactions in Nigeria rose by 42.05 per cent to hit N395.47tn in 2022, according to new data from the Nigeria Inter-Bank Settlement System. The new data revealed that Nigerians used cashless forms of payment to process N117.07tn more than the N278.39tn that was processed in 2021.The N395.47tn processed in 2022 amounted to the total amount processed on the Nigeria Instant Payment System and Point of Sales terminals, which is how cashless transactions are recorded on the NIBSS. This continued the growing adoption of electronic payment channels in Nigeria since its uptake began during the COVID-19 pandemic. The total NIP transactions for the period was N387.08tn and PoS transactions amounted to N8.39tn.Total NIP transactions for the corresponding period of 2021 was N271.96tn and PoS amounted to N6.43tn. In two periods under review, December recorded the highest e-payment numbers. NIP and PoS transactions amounted to N42.03tn and N826.30bn respectively in December 2022. There is no doubt that cashless transaction in the country will continue to rise if the cashless policy is here to stay, Nigerians will have to adapt to their new found reality. So many people have complained of having money in their bank account but unable to spend it on what they want and with the ridiculous high cost of charges by the private PoS owners who have cash, it cost almost half of the original amount you are withdrawing to get cash with cases of Pos owners collecting as much as N2000 to collect N5000 in cash.
The current situation in the country as a result of the cashless policy stipulated by the apex bank clearly shows that Nigeria doesn’t have the technological infrastructure to operate a fully cashless system, it also exposes how below par the banking industry is with so many electronic transactions pending and some unable to even transact as a result of their commercial banks not having network and being overwhelmed with digital transactions. According to (NIBBS) the number of individual bank users in Nigeria as at 2021 was 122.3 million and with a population of over 200 million people about a third of the population don’t have bank accounts, this statistic shows that many Nigerians haven’t fully embraced the banking system while others don’t have access to banks particularly in rural areas.
The banking sector needs to invest more in its technological infrastructure, to improve payment and transaction by enabling fast internet resource, equipment and platforms with money point means which will make transactions for petty traders and large-scale business to thrive better. The government should encourage banks to create branches across the country for rural and urban traders, so they can all have access to banking services. The CBN and banks in the state can and should deploy a sufficient number of POS machine to all markets, superstores, petty traders, to enable buyers utilize their ATM cards for transactions of all kind. The public should also be open to new technological innovations.
