Cashless Policy: A Burden or Relief?

ATM Cards

 
The cashless economy policy of the Central Bank of Nigeria (CBN) was designed to provide mobile payment services, break down the traditional barriers hindering financial inclusion of millions of Nigerians and bring low-cost, secure and convenient financial services to urban, semi-urban and rural areas across the country. It has, however, become an albatross to some elites, the poor, uneducated and traders. Eromosele Abiodun and Obina Chima write
 
As at today, Nigeria occupies the unenviable position of number one country in Africa with largest number of people with no access to financial services. According to data compiled by Microfinance Information Exchange (MIX) last year, Nigeria and the Democratic Republic of Congo were found to have the largest gaps between populations living in poverty and those with access to financial services–80 million in Nigeria and 48 million in the Congo. Besides, managing the few that have access to the banks is said to cost banks a huge amount of money with cash management taken a large chunk of the expenses.

LAGBUS: Already cashless with E-Ticketing (Card ETC)

“The LagBus Asset Management Ltd., operators of LAGBUS, had already gone cashless with electronic ticketing (e-ticketing). The company introduce e-ticketing in April, 2011 with  buses plying Routes 53, 54 and 55 on Lagos Island. How does it work? LAGBUS fleet had validators for E-Ticketing Card (ETC) already installed in them. When a commuter with a card board a LAGBUS, such passenger must board the bus from the front door as the validator is inside the doorway where the (ETC) card must be swiped and the fare for the trip would be deducted from the card immediately. What are the charges? The initial cost for E-Ticketing Card (ETC) is N500 comprising N200 cost of the ETC and N300 worth of travel fare. What are the (ETC) Benefits? With the (ETC) card you can stop any LAGBUS fleet anywhere within the route unlike the paper ticket where you have to get to LAGBUS terminal before you can use them. Reduction in fare rate: Unlike the paper ticket where every destination fare is the same in respective of the distance, with ETC, you get discount (e.g. Leventis to Silverbird Galleria would cost you N70 with a paper ticket but the same distance would cost you N50 with ETC card).   The Danger? The card is not personalized, it can be lent to friends and family members (though only one person can use it per trip). Any money loaded on the card is forfeited in case of any loss or theft of the card. Are you still contemplating?”

Read more about LAGBUS Already Cashless with E-Ticketing Card (ETC) | Cashless Payment Simplified on:
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Cashless policy: Currency outside banks declines by 12.2%

By Babajide Komolafe
Currency outside banks declined by 12.2 per cent in January, indicating impact of the cashless policy of the Central Bank of Nigeria (CBN).

The cashless policy took off in Lagos on January 1st this year with the cashless Lagos policy. Though the limit on free cash withdrawals and service charge was delayed till April 1st, the increased awareness and deployment of point of sale (PoT) terminals by banks increased electronic payment transactions and hence encouraged more people to keep their money with the banks.

Live Cashless

CBN's Cashless Policy: Lagos Pilot Fully Commences.

The Central Bank of Nigeria (CBN) has introduced a new policy on cash-based transactions which aims at reducing the amount of physical cash circulating in the economy and encouraging more electronic-based transactions. The Policy's pilot run is being conducted in Lagos, with the rest of the country to follow in January 2013.

The Policy had earlier stipulated penalty charges of 10% and 20% for cash transactions exceeding N150,000 daily for individuals and N1,000,000 daily for corporates respectively. However, the policy was modified by the CBN shortly prior to the commencement of full implementation of the Policy, ushering in a new financial regime where emphasis shifts from cash based transactions to electronic means of conducting business.