Follow Us on Google
From Uche Usim, Abuja
With the naira redesign policy and cashless policy taking root in Nigeria, the banking public, through continuous sensitisation, is deepening the usage of various digital payment channels spread across the country.
In fact, latest figures released by the Nigeria Inter-Bank Settlement System (NIBSS) show that the use of e-Payment channels surged to the highest in five years; from N729.2 million in 2018 to N5.2 billion in 2022, representing 613.1 per cent growth.
There has also been a 142 per cent rise in mobile transfer transactions at a total of N19.4 trillion in 2022, relative to N8 trillion in 2021.
The channels for electronic transactions are; internet banking, mobile banking, domestic card (AFRIGO), USSD, PSBS, POS, eNaira app and over 1.4 million mobile banking agents spread across the country to attend to the informal sector and those in far-flung settlements.
According to economic analysts, the exponential increase in transactions conducted via electronic channels is a testament to the innovative value propositions offered by electronic products and services in Nigeria’s payments space.
The Central Bank Digital Currency (CBDC) eNaira, which is one of these e-Payment channels, has sustained consistent growth over time in adoption, transaction volumes, and value amidst the currency redesign policy action and revised cash transaction limits.
According to the CBN Governor, Mr Godwin Emefiele, the eNaira’s acceptability continues to spread, as evidenced by mass adoption by a number of associations cutting across government, academic and transportation sectors. Its acceptability sprawled down to the industrious and ancient city of Kano, where the Keke Napep Association has fully embraced the use of Africa’s first Central Bank Digital Currency, eNaira as a means of payment for transport fare.
“The adoption rate for eNaira has increased. It has emerged as an electronic payment channel of choice. The Ministry of Humanitarian and Disaster Management has 4 million wallets it created for the social intervention and will help in managing those captured in various schemes managed by the Ministry.
“So far, we have 13 million wallets and N22 billion worth of transactions carried out on it.
As we move forward in financial inclusion, it’ll remain a useful platform”, he said at the last MPC meeting.
To further buttress the adoption of eNaira, the Quick Response (QR) code could be boldly seen at the back of commercial tricycles, popularly called Keke Napep, across various towns in Nigeria.
A tricycle operator in Idu area of Abuja, Saleh Mohammed, told Daily Sun that the eNaira innovation has helped resolve persistent challenges around ‘change’ which usually arose when commuters settle their transport fare using high denomination banknotes.
“Since we were sensitised about the eNaira app and began using it, things have been much easier. I don’t have problem giving change to passengers”, he said.
Mohammed further stated that commuters without internet-enabled phones typically take advantage of the eNaira Unstructured Supplementary Service Data (USSD) code ‘*997#’ to make payments, which allows for quick transaction completion turnaround time of one minute on the average. He further stated that a significant driver of adoption is the absence of transaction charges on the eNaira platform, alongside the reliability and convenience it provides for receiving and saving funds.
In Kano, various Micro Small and Medium-sized Enterprises (MSMEs) enjoy similar experiences and are less bothered about voluminous cash.
Interestingly, the eNaira QR code had been specially programmed for commercial tricycle operators to feature the flat fee of N100 common on most routes, hence the passenger simply scans the code and makes the payment for the fare into the eNaira wallet of the driver.
Furthermore, it is likely that the volume/value of transactions settled via electronic channels will maintain the observed upward trend, especially when taking into account the revised cash withdrawal limits of N500,000 and N1,000,000 weekly for individuals and corporate entities, which came into effect January 9, 2023.
Suffice it to say that with sustained advocacy and awareness on the functionality and advantages of the eNaira, such as an absence of charges and a 50 per cent reduction on the Merchant Service Charge (MSC) for merchants, more Nigerians will join the eNaira bandwagon, making it the channel of choice for their daily transaction needs.
Experts note that while the naira redesign project has loads of economic goodies, some section of Nigerians, apparently those addicted to cash spending, unfortunately, have not considered the gains but have detonate the policy and tried to stir public objection.
Critics of the cashless policy have argued that it would further impoverish Nigerians and create unemployment in the financial value chain. But they lacked evidence to buttress their rejection.
It is not surprising that most of the objections to the Central Bank policies are by those who currently benefit from the rot in the system – politicians, and other corrupt public officials who take undue advantage of the opaque system of administration that does not allow for transparency in government business.
As a result of the lack of transparency in financial dealings, social safety interventions for instance have been compromised as monies end up in private pockets while the vulnerable are left in worse conditions.
Since monies cannot be partly accounted for or traced as a result of physical cash handling, a lot of underhand transactions are perpetrated and often go unnoticed by anti-graft and regulatory agencies.
In his view, the former Managing Director/Regional Executive Ecobank Nigeria, Patrick Akinwuntan, expressed confidence that the cashless policy would improve financial security and transparency.
“If you look at the level of theft when people go to buy things in the market, it is cash robbery. It happens when people are coming from the shops, robbers believe that there is money with you. But with this policy, the average Nigerian will know well, maybe this person will not be holding up to N100,000”, Akinwuntan said.
He however urged regulators to monitor and walk with Nigerians on the journey.
“If Nigerians see the support from the regulators, they will fall in line. For instance, we can see that most banks want to be available on Saturday and I actually think some will be available on Sundays also. That process needs to take a lot of feedback. Once the people understand that the regulators are focused on this policy and are supportive in its implementation, I think it has a good opportunity of taking Nigeria to a better monetary environment,” he said.
