The Central Bank of Nigeria has urged Nigerians to adopt the introduced cashless policy, claiming that the country’s cash payment system is vulnerable.
According to the apex bank, despite progress in building a strong payment system through a series of reforms aimed at expanding the system, cash has remained a competitor and is ripe for disruption.
“Thus as a nation, we must embrace a cashless economy, encourage the provision of platforms to enable seamless transactions, and boost business expansion where cash is efficiently disrupted,” the CBN said.
According to Investors King‘s findings, the Nigerian payment sector has kept introducing initiatives aimed at extending electronic payment benefits to Nigerians, even at the base of the pyramid where cash usage has been predominant.
The apex bank, in collaboration with the Bankers Committee, the Nigeria Inter Bank Settlement System (NIBSS), and other payment industry players, has improved Nigerian payment systems by continuously providing solutions to increase infrastructure resilience and encourage the use of electronic payment methods across the country.
NQR offers instant value for P2B, P2P, and B2B transactions with an enhanced customer experience thanks to NIBSS’s efficient integration process for financial institutions utilising APIs. With the help of this payment method, bank customers with smartphones can now easily access the data provided by retailers to complete transactions.
The CBN introduced a new policy on cash-based transactions, which stipulates a cash handling fee on daily cash withdrawals that exceed N500,000 for individuals and N3,000,000 for corporate bodies, according to the CBN’s website. The goal of the new policy on cash-based transactions (withdrawals) in banks is to encourage more electronic-based transactions (payments for goods, services, transfers, etc.) while decreasing the amount of physical cash (coins and notes) circulating in the economy.
The CBN introduced the new cash policy basically for these reasons;
- To advance the modernization and development of our payment infrastructure in line with Nigeria’s Vision 2020 objective of ranking among the top 20 economies by the year 2020. An effective and contemporary payment system is a critical enabler for economic growth and has a positive correlation with economic development.
- To increase financial inclusion by delivering more effective transaction options and a wider reach, while lowering the cost of banking services (including the cost of credit).
- To enhance the ability of monetary policy to control inflation and promote economic growth.