The Nigerian government introduced the Cashless policy in the beginning of year 2012 on the 1st of January which was later fully implemented in the city of Lagos on the 1st of April 2012, after a pilot scheme was carried out for a period of three months.
The essence of the Cashless policy which was enforced by the Central Bank of Nigeria (CBN) the regulating body for all deposit money banks and some other financial institutions was to make Nigerians embrace the use of electronic means of funds transfer to carry out domestic business transactions in the country without the need of moving about with large amount of cash.
The objectives of the policy include:
to provide a modernized payment system as an efficient and modern payment system is necessary for economic development
to increase financial participation by providing more efficient transaction options and greater reach
to reduce the cost of banking services (including cost of credit)
to reduce the incidence of robbery attacks and fraud associated with paying cash over the counter in banks.
The channels available for e- transactions includes the use of :-
- ATM
- POS terminal (Point Of Sales)
- Mobile Banking and
- Internet Banking
All these are described briefly below.
ATM (Automated Teller Machine): is the use of debit cards know as "atm cards" to make cash withdrawal at these machines which are placed at suitable locations especially bank premises, but there is a daily limit to the amount of transaction that can be done through this channel. Other uses of the atm card include funds transfer, and online shopping.
POS terminal (Point Of Sales) are used by business outlets to get payments for goods and services rendered to customers where in the money goes straight into their bank accounts from the customers bank account without the need to exchange physical cash. This transaction is carried out right in their place of doing business. If you are a business owner and you are yet to use POS, this option is waiting out there for you to get payments for goods and services rendered straight into your bank account. What an easy way of doing things!
Mobile Banking is the use of mobile phones to carry out transactions in your bank account. This requires the use of a "gprs" enabled phone where in an application "java application" is installed on the mobile phone and with it you can access your bank account and carry out transactions including Funds Transfer, Bills Payment and Airtime Recharge.
There exist another way of carrying money about on your mobile phone for which you don't need to have a bank account to use, it is called ''Mobile Money'' and it can be used with any type of mobile phone.
Internet Banking: with Internet Banking you have a great deal of access to your bank account, here you can carry out transactions and view your account's statement. You require internet facility in order to use Internet Banking.
The charts below take a brief look on the use of these electronic channels of transaction listed above from a period in 2007 to 2012.
From the chart we can see that there has been increase in the volume of e-transaction from 2007 to 2012, with ATM transactions leading the pack and some level of increase in other channels.
You can transfer funds anywhere, anytime using your laptop, phone or tablet through the above channels and you can also pay for bills including:
- Cable TV Bills i.e. (DSTV, HiTV)
- Phone Bills
- Utility Bills (Electricity, Internet service, e.t.c)
The use of electronic channels of transaction in Nigeria has come to stay. By the year 2013 the Cashless policy is proposed to be implemented across Nigeria. Are you ready and which of the channels do you use at present?
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