Cash-less policy: Limited PoS deployment, awareness threaten adoption

With the deadline set for penalties on cash
transactions above N150,000 fast
approaching, money market operators and
merchants fear that the adoption of the
policy might be marred by limited Point of
Sale terminals deployment, as well as low
awareness. UDEME EKWERE report
Fear is being expressed by some Nigerians
about the expected commencement of
sanctions on the cash-less Lagos policy,
scheduled to take effect at the end of
March 2012.
The cash-less economic policy, which
began in Lagos on Jan 1, 2012, is aimed at encouraging electronic-based
payments, as well as reducing the amount of physical cash in circulation.
Experts have said that the process is also expected to drive Point of Sale
transactions by well over 200 per cent in 2012, as obtained in some other
climes.

A PoS terminal is an electronic device used for verifying and processing
credit card transactions.
Some operators and merchants in Lagos noted that with about six weeks
to the March 31, 2012 deadline, the whole process seemed fraught with so
many challenges.
A media practitioner, Mr. Lanre Olutade, said that he had tried to use
Automated Teller Machine cards at several places, where the process
should have been instituted, but found out that most of the time, the
process did not work.
He says, “I’m uncertain about that March 31 date, because I have tried to
use my ATM cards at various PoS terminals and I have been facing the
same challenge. I think those involved have a whole lot of work to do to
ensure that the process works well; else they may have to extend the
deadline again.
“For instance, last Saturday, I went with my wife to ‘Cash n Carry’ at Allen
Avenue, Ikeja, Lagos, to buy some things. At the end of transactions, when
I presented my cards at the PoS terminal, the cashier fiddled with the card
and later returned it to me, saying that the system was not working. Thank
God my wife was with me, as she had to wait with the goods, while I
rushed off to the bank to withdraw money via the ATM.”
Olutade noted that some people, who had been willing to pay with their
cards, had to return the goods when the cashier informed them that the
PoS was not functional.
“It is important that all the bodies concerned look into this issue as much
as possible, so that this one would not become another failed project in
Nigeria,” he says.
A businessman, Mr. Oluwatosin Adegbenro, told our correspondent that he
wondered where the cash-less system was actually working, as it seemed
that in all the places that the system was supposed to have been
operative, operators and merchants had yet to find their feet.
Narrating his experience, he said, “Last week, I had to meet some of my
clients in Sheraton Hotel, and during the course of the discussion, I rushed
to the business centre there to carry out some transactions, and I found
out they did not have a POS terminal there.
“I was surprised, to say the least, because one would expect that all the
business arms of such a hotel as big as that would ordinarily have this
machine. Thank God I had some cash on me. If not, that business might
have been ruined.”
Adegbenro advised that it was important that regulators did their
homework properly before coming up with policies such as this, adding
that they needed to ensure that the adequate infrastructure were on the
ground to drive such policies.
A housewife, Mrs. Ijeoma Nwanna, wondered if the cash-less policy would
affect transactions in the local market places. She queried our
correspondents if people trading at market places would be required to
have PoS terminals in their shops.
She says, “It is necessary for all these things to be made clear to us, so
that we would understand all that we are supposed to do, because the fact
remains that the awareness on this whole cash-less thing is even too low.
“If not for the fact that my husband, who is a banker, explained some of
these things to me, I would have had no idea.”
A former President, Association of National Accountants of Nigeria, Dr.
Samuel Nzekwe, had, on Wednesday in Lagos, asked the Central Bank of
Nigeria to embark on increased enlightenment activities on the cash-less
policy.
According to him, most people, particularly in the informal sector of the
economy, have yet to understand the meaning of cash-less economy,
adding that this is because the CBN has not properly educated the people.
He said that there was the need by the government to communicate the
sensitisation campaign in simple language to effectively educate the
people on the policy.
“The policy is good. I support the idea. Unfortunately, the CBN has not
done enough awareness campaign,’’ Nzekwe said.
He explained the need for CBN to send its representatives to the various
markets as part of the enlightenment campaign to educate and know the
feelings of the people and informing them of the benefits to be derived
from transiting to a cash-less economy.
As a critical factor for success, Nzekwe said that the CBN needed to make
available the necessary infrastructure that would make the cash-less policy
to work.
Nzekwe explained that the policy might not be immuned to the
manipulative ploys of many economic operators and businessmen.
Reacting to this, the Chief Executive Officer, Chams Plc, Mr. Demola
Aladekomo, told our correspondent that the major difficulty in the process
was that of low level of awareness among the people.
“We have seen that the major problem that is there is that of education as
most of the merchants, who are supposed to be providing the service do
not know how to use the machines.”
He said that his organisation was partnering with the CBN to ensure a
massive education session for operators and merchants, to aid them in the
proper usage of the terminals.
The Managing Director and Chief Executive Officer, Interswitch, Mr.
Mitchell Elegbe, had claimed that the cash-less economic policy was
expected to drive PoS transactions by well over 200 per cent in 2012,
adding that PoS transactions might grow a lot more than 200 per cent as
earlier predicted by MasterCard.
The Area Head, East, West Africa and Indian Ocean, MasterCard Worldwide,
Mr. Daniel Monehin, had agreed, claiming that PoS terminals were likely to
grow beyond 200 per cent unless the economic refused to grow.
He said, “Growth in PoS transactions may be a lot more than 200 per cent
unless the economy is not growing. PoS, which is almost at zero per cent
today will grow a lot faster than the performance of the general market,”
adding, “In the last three months, we have seen more Pos being ordered
than in the last 10 months.”
Reacting to this, Adegbenro said, “I think these people should tell us
exactly where these machines are located and how workable they are. The
reason for saying this is that what I have seen has been entirely different
from what these people have been saying.”