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Cashless: CBN voices need ‘to pull cash out of Nigeria’

Cashless: CBN voices need ‘to pull cash out of Nigeria’
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The Central Bank of Nigeria (CBN) says its Cashless Nigeria policy will reduce costs of providing banking services for banks and enable them have enough money to lend to Nigerians.

The apex bank says operating a cashless society in Nigeria is very important for economic growth, as it will enable the ultimate attainment of the Nigeria’s Vision 20:2020, noting that “an efficient and modern payment system is positively correlated with economic development, and is a key enabler.”

In a document titled ‘Why The Central Bank of Nigeria made the Cash-less Policy’, CBN explains that the country currently nurtures the ambition to be one of the best 20 economies before the year 2020, which it says is one reason it came up with the Cashless Policy.

The nation’s apex bank also says the policy was to reduce the amount of Naira notes and coins (cash) used for business but not to eliminate cash usage.

A bank staff seen using an ATM at an exhibition showcasing banking technologies and services in Lagos
A bank staff seen using an ATM at an exhibition showcasing banking technologies and services in Lagos

[quote font=”georgia” font_size=”22″ font_style=”italic” align=”left” arrow=”yes”]“Our economy uses too much cash for transactions for goods and services, especially for buying and selling. This is not how it is done in other progressive countries of the world where there are other payment options like; Debit and Credit Cards, Bank Transfers, Bank Direct Debits, Automated Teller Machines (ATMs), and even Mobile Phone Money,” CBN says.[/quote]“Our economy uses too much cash for transactions for goods and services, especially for buying and selling. This is not how it is done in other progressive countries of the world where there are other payment options like; Debit and Credit Cards, Bank Transfers, Bank Direct Debits, Automated Teller Machines (ATMs), and even Mobile Phone Money,” CBN says.

“These achievements have been brought about by the changing needs of their people, competition among banks, and other companies, including changes in technology. Our major focus is to increase the volume of all available payments instruments in Nigeria,” the apex bank says.

While explaining that the Central Bank never intended to eliminate cash, the apex bank says that “there will still be cash in circulation. The cash policy aims at reducing the use of cash while increasing the use of alternative forms of payment.”

CBN wants Nigerians to go to their respective banks and make enquiry on any of the channels of payment available in the bank and be guided accordingly. Also, CBN has licensed mobile payment operators who have rolled out mobile payments.

“You can use anyone that suits your need. You can equally use more than one or all depending on your needs, but you are not forced to use all,” the bank tells Nigerians.

Relating the benefits of reducing the amount of Naira notes used in business transactions within the country, CBN says “it will help the Central Bank and commercial banks better manage our economy to ensure that our Monetary Policy works.”

In search of locally-made IT and technology products: Business activities underway at Ikeja Computer Village, Nigeria's biggest technology market
Business activities underway at Ikeja Computer Village, Nigeria’s biggest technology market

[quote font=”georgia” font_size=”22″ font_style=”italic” align=”left” arrow=”yes”]According to CBN, “the ATM fraud was prevalent when Nigeria was using magnetic stripe cards. In Nigeria all cards have adopted the Chip and PIN technology which is more secured and has succeeded in reducing the fraud level by 99%. With Chip and PIN, the chances of fraud are reduced; provided you keep your PIN secret. The Nigeria electronic Fraud Forum (NeFF) an industry anti-fraud initiative comprising banks, EFCC, NIMC, Interswitch, Valucard, CPC, PCC and many others deliberate monthly to make our e-payments more secured.”[/quote]It further highlighted that for Consumers; it increases convenience, provides more service options, and reduces the risk of cash-related crimes. It also provides cheaper access to (out-of-branch) banking services and access to credit.

“The main benefit is convenience and safety – It saves you from robbery, theft, cost of cash management, stress of counting cash, looking for change, getting more customers that do not have cash but card, access to more revenue from value added services of POS such as bills payment and airtime vending, etc.,” the apex bank says.

According to CBN, the digital payment systems are designed in such a way the even Nigerians who are not literate can use these channels.

“There is a high level of numeracy as many Nigerians can use mobile phones, and engage in functions like recharging, PIN entry and SMS. These functions are all what is required to do mobile payments. In addition, biometrics is being used in some ATMs and POS; this will help in user identification and ease usage. It is important to note that literacy is different from numeracy; Nigerians are quite numerate especially when currency is involved; and what is required for these electronic systems is numeracy.”

According to CBN, “the ATM fraud was prevalent when Nigeria was using magnetic stripe cards. In Nigeria all cards have adopted the Chip and PIN technology which is more secured and has succeeded in reducing the fraud level by 99%. With Chip and PIN, the chances of fraud are reduced; provided you keep your PIN secret. The Nigeria electronic Fraud Forum (NeFF) an industry anti-fraud initiative comprising banks, EFCC, NIMC, Interswitch, Valucard, CPC, PCC and many others deliberate monthly to make our e-payments more secured.”

CBN thus calls for greater enlightenment of the public to choose other available payment options to promote end-to-end electronic payments in Nigeria instead of the excessive reliance on cash for transactions.

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Success Kafoi Journalist at Technology Times Media. Mobile: 08077671673 email: success.kafoi@technologytimes.ng

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