Effective from July 1, 2014, the Central Bank of Nigeria expanded the implementation of the Cashless Nigeria Project, otherwise known as ‘Caslite’, beyond Lagos. Lagos had served as a pilot scheme prior to a nationwide implementation. The policy is aimed at discouraging cash withdrawals above N500, 000 for individuals and N3, 000, 000 for corporate bodies per day. The essence is to reduce the amount of cash in circulation and to encourage electronic based transactions. Electronic based transactions will invariably reduce customer traffic in bank halls as more customers resort to the use of electronic cards and automated teller machines, point of sale payments and internet banking services.
Security wise, a cashless system is expected to minimise crimes such as robbery, where knowledge of the existence of huge volumes of cash has always served as a motivator. In the economic/services sector, it will also limit the extent to which financial corruption is perpetrated in the system for individuals as well as entire organisations. In this regard, the Economic and Financial Crimes Commission (EFCC), has its job cut out for it.
The cashlite policy notwithstanding, there are many Nigerians in this age and time who still want their every kobo given to them over the counter – inside the bank hall. Some avoid credit/debit cards like plagues while others carry them, but don’t trust either the cards, or the banks, or the machines – and so hardly ever get to use them. Others have heard stories and had experiences (usually unpleasant), as to how the machines could suck in these cards, actually count the money (the sound of which would be heard alright), and then eject the card without releasing the money. A cross check would later confirm that their accounts were debited whereas they had not received any cash. Getting such a failed transaction reversed or corrected may span several weeks if not months.
While an average ATM user has the above and similar stories to tell, experiences inside bank halls are often traumatic as well. It is common place to witness short or long periods of suspended animation in the bank hall because “the network is slow” or worse still, “there is no network”. Transactions and interactions can be held up in this way and often, those who are short in patience explode in frustration.
Being streetwise for an average city dweller therefore, is to be aware that “network failure” goes well beyond dropped calls and undelivered text messages. Indeed failed network can trap one’s credit card and one’s “last card” inside a cash machine. It could equally hold up a one-minute cash transfer for many hours regardless of how much in a hurry the sender or recipient might be. Most mobile phone users try to get round the “network wahala” by carrying multiple handsets, or one phone with multiple sim cards.
These are some of the realities facing Nigeria’s efforts to move many sectors of the economy unto the information technology platform. Automation and digitalisation demands the immediate deployment of ICT infrastructure and the requisite knowledge and competence to operate them. There is therefore the need to have sufficient carriage capacity in the ICT infrastructure to facilitate the easy transfer of data and other information between banks and their customers.
This is the point at which the projected launch of broadband connectivity becomes crucial. Broadband will engender better and faster possibilities for data communication. Or better put, it is going to generate the potential and capability for data communication as against the current dominant voice mode. The greater carrying capacity will positively influence the efficiency of a cashless economy and improve banking services as well. It is only increased network capacity that can accommodate increasing mobile devices that will hook up to the networks and allow for seamless and safe financial transactions in the digital era.
There is no gainsaying the fact that as soon as the question of insufficient infrastructure is addressed, the challenge of automation and digitalisation would have been significantly resolved. In respect of the cashlite policy, it would make it possible for the deployment of more POS and ATM terminals and for mobile telephone users to have full confidence in services such as internet and mobile banking.
Internet banking enables customers to handle banking transactions online. Most banks now operate internet banking platforms. These platforms allow customers to view their account balances, deposits, withdrawals, account statement, exchange rates, etc, online. It also enables them to transfer funds, pay bills such as electricity, DSTV, water, airtime for phones and devices, pay taxes and shop real time online. Internet banking is therefore one aspect of the of the cashless economy policy.
Mobile banking could be said to be another name for internet banking on the mobile phone. It enables customers to use their mobile phones for banking transactions and bills payment. Like internet banking, mobile banking platforms enable customers view their account balances, statement, transfer funds between accounts within the same bank, and pay bills as well as taxes. This makes it possible to operate without having to carry cash and still meet one’s financial obligations.
The future of telecoms and an automated monetary system will depend much on the capacity of the nation’s communications sector to transmit data quickly, reliably and efficiently. Nigeria’s connectivity is not very reliable and the Nigerian Communications Commission (NCC) has continued to emphasise on the need to improve the quality of services by players in the sector. With the NCC determined to implement the national broadband policy, connectivity is certain to improve in the coming years and so will the cashlite policy.
Thus, the relevance of the communications sector, and by extension the NCC, continues to grow in quantum leaps as the full potentials of ICT come to bear in contemporary Nigeria.
Bolarinwa, an economist, writes from Ibadan
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