Experts in the financial sector have said that increased sales in a cashless economy will have a positive impact on Government’s revenue translating to increased value added tax (VAT). In addition, they also believe that cashless economy will enhance the efficiency of monetary policy.
They went on to say, e-payment in a cashless economy will ensure security and convenience for payer and payee as well as reduce the overall cost of banking and payments, thereby reducing bank charges, and bringing the benefit of banking services to more citizens. Niyi Ajao, acting managing director, Nigeria Interbank Settlement System (NIBSS), made this known while delivering a paper on The Cash-less Lagos Policy: Role of NIBSS a a Bi-monthly discourse sponsored by Zenith Bank.
Ajao, while delivering his speech, disclosed that licensed cash in transit (CIT) companies will take over cash management services in the country from June this year, as part of efforts to reduce cost of handling by banks.
He went on to implore the general public to embrace the cash-less policy, as he said an efficient Payments System will depend less on cash, at the same time bring about countless potentials to growing the nations economy.
According to him, cash-less banking to a large extent has a multiplier effect on profitability, higher wages, higher employment, higher GDP for the economy. He explained that alternatives to cash payment include cheque, bank transfer, Same-Day Inter-Bank Transfer(NEFT), NIBSS Instant Payments (NIP), Standing Orders, Direct Debits, Payment Cards, Automatic Teller Machines (ATM), Point of Sale (POS) Payments, Mobile Payments (micro-payments among others.
He said that merchant, supermarkets, churches and other businesses will have to rely on the licensed CITs to evacuate their cash from that date because unlicensed players will cease to render cash evacuation services.
NIBSS boss noted that over N200 billion was spent on cash management in 2011 and embracing the policy will save this cost, which will translate to lower cost of banking operations, and decreased cost of lending.
Ajao said that NIBSS is at a point of fully implementing cheque truncation system in the country. The practice will phase out physical clearing of cheques and reduce the clearing days for banks by at least one day.
NIBSS boss noted that over N200 billion was spent on cash management in 2011 and embracing the policy will save this cost, which will translate to lower cost of banking operations, and decreased cost of lending.
Ajao said that NIBSS is at a point of fully implementing cheque truncation system in the country. The practice will phase out physical clearing of cheques and reduce the clearing days for banks by at least one day.
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