The Central Bank of Nigeria (CBN) has stepped up its efforts towards implementing the cashless policy in Nigeria by imposing additional charges on cash based transactions. These transactions include both cash deposits and withdrawals on both individual and corporate bank accounts.
The cashless policy was introduced by the CBN in January 2012 to reduce but not eliminate the amount of physical cash circulating in the economy and to encourage payments for goods and services via electronic transactions, though the policy was suspended in 2015 to allow banks to take appropriate measures for its seamless implementation, the CBN has reintroduced it in 2019.
According to the policy, deposit money banks will from now on charge a 3% processing fee for withdrawals and 2% for deposits of amounts above N500, 000 for individual accounts, also 5% processing fee for withdrawals and 3% for lodgments of amounts above N3 million for corporate accounts.
However, looking at the Nigerian situation, one may argue that there are challenges that come along with moving away from a cash based economy to a cashless one, especially challenges related to a developing country like Nigeria.
Electronic transactions require some level of technological literacy, in Nigeria where the literacy rate is low, this will hinder implementation. Due to the complexities involved in using technology, some people will prefer to keep their money in cash.
Electricity is very significant to an effective electronic transaction system. The unstable and sometimes absence of power supply in Nigeria will certainly pose some challenges.
Some Nigerians are skeptical about an electronic based transaction system due to the operations of hackers and cybercriminals. The recent case of the 77 Nigerians accused by the United States of massive fraud and money laundering is still fresh in the minds of Nigerians. This means that any security lapse can result in fraud, hacking of bank accounts and other internet related crimes.
Though, implementation of the policy will commence in six states of the federation and the Federal Capital Territory, with full
implementation across the nation scheduled for March 2020, operators and regulators need to embark on mass awareness campaign in order to educate the banking public about the merits of the policy. There is also the urgent need for huge investments in the area of cyber security, Nigerians need to be assured that their money is safe.
Mass Communication Department,
Ahmadu Bello University, Zaria
08185040397; [email protected]