Nigeria is a country with a population of over 200 million people, making it one of the most populous countries in the world. Over the years, the country has seen a shift from cash-based transactions to electronic payments, thanks to the introduction of the Cashless Policy.
When Cashless Policy Introduced?
The Cashless Policy was introduced by the Central Bank of Nigeria (CBN) in 2012, as a way to reduce the amount of physical cash in circulation and encourage electronic transactions. The policy was first implemented in Lagos State and later extended to other states in the country.
The implementation was further maintained earlier this year 2023, which brought about more scarcity of cash in Nigeria.
The policy encourages the use of electronic payment channels such as debit cards, mobile banking, internet banking, and Point of Sale (POS) terminals. It aims to reduce the cost of cash handling, improve efficiency in the payment system, and curb corruption.
The policy has had a positive impact on the economy, as it has led to an increase in the adoption of electronic payments by individuals and businesses. It has also reduced the cost of cash handling and transportation, as well as the risk of theft and fraud associated with physical cash.
Benefits Of Cashless Policy
One of the major benefits of the Cashless Policy is the convenience it offers. With electronic payments, individuals and businesses can make transactions from the comfort of their homes or offices, without the need to carry cash around. This has also reduced the risk of physical attacks and theft.
The Cashless Policy has also made it easier for businesses to track their transactions and manage their finances. Electronic payments offer a more transparent and efficient way of managing funds, reducing the risk of fraud and embezzlement.
However, the policy has not been without its challenges. One of the major challenges is the lack of infrastructure in some parts of the country. In rural areas, for example, the lack of electricity and internet connectivity makes it difficult to adopt electronic payments.
Another challenge is the issue of security. With electronic payments, there is a risk of fraud and cybercrime, which can lead to the loss of funds. The CBN has, however, put measures in place to address these issues, such as the implementation of two-factor authentication and the introduction of biometric verification.
In conclusion; the Cashless Policy has been a significant development in Nigeria’s payment system, as it has encouraged the adoption of electronic payments and reduced the amount of physical cash in circulation. While there are challenges to be addressed, the policy has the potential to transform the payment system and promote economic growth in the country.