Due to the shortage of physical cash flow in Nigeria, caused by the Central Bank‘s policy to redesign the old Naira, many citizens have turned to mobile bank transfers.
However, this has led to various problems such as failed transactions and network issues, pushing individuals towards digital banks for transactions.
Traditional bank apps have also faced numerous challenges, including hanging transfers, login refusals, no reversal of funds, and recipients not receiving transferred funds. These issues have frustrated bank customers, leading to increased adoption of alternative transaction channels like USSD, which has recorded an increase in failed transactions.
Fintech experts explain that the downtime recorded in most banking apps is triggered by a jump in transactions, revealing that some of the banks’ IT systems are not scalable enough to handle sudden surges. This has spurred Nigerians, particularly businessmen and women, to embrace digital banks like Palmpay, Opay, and Kuda, due to the ease of sending and receiving money and low transaction costs.
Reports reveal that traditional banks in the country are growing increasingly anxious over the rising popularity and adoption of digital banks. Nonetheless, the lack of physical money in circulation has been a catalyst for the adoption of digital financial services, helping the Central Bank achieve its cashless policy and move towards a cashless economy.
The Central Bank of Nigeria (CBN) is pleased with the growing use of e-payments, which will increase the number of citizens in the formal financial system and reduce reliance on cash. In December of last year, the CBN rolled out a new policy that limited cash withdrawals for individuals and companies to N500,000 and N5,000,000 per week, respectively, in a bid to limit the excess flow of cash.