Cash has served as the default payment method in Nigeria for many years, especially within rural areas, because it was easier to trust and generally accepted. However, recent developments such as internet access and growing mobile phone usage in Nigeria sparked a “cash-lite” movement.
The initial forms of the “cashless policy” designed by the Central Bank of Nigeria were launched in 2012 in a bid to scale up financial inclusion in the country amongst other benefits. Over the years, the apex bank has followed through on this mandate with a raft of measures to accelerate the cashless drive.
While many businesses have gradually begun to adopt and embrace new digital modes of transacting such as ATMs, bank transfers, and POS, the 70 percent of small businesses in Nigeria that rely heavily on cash have struggled to make a seamless transition to cashless due to factors such as financial illiteracy, poor access to digital infrastructure, high dependency on cash transactions, and the inability to digitalise micro-transactions, among others.
It is important to note that small businesses currently contribute 48 percent of Nigeria’s GDP, so the shift from cash to digital payments must be done in ways that would minimise possible setbacks that could impact their sales revenue. Recently, a photo of a young lady selling apples with a placard around her neck displaying her GTBank account details made the rounds, indicating that the push for a digital economy is slowly hitting the grassroots. This is barely scratching the surface. In understanding the realities of the new cashless era, experts say priorities lie in creating simple, affordable, and efficient channels to help these merchants accept digital payments seamlessly.
Soft POS technology: The next alternative for cash-reliant businesses
Short for “Software Point of Sale”, Soft POS is an innovative application that enables merchants to accept card payments directly through their phones without requiring additional software. With Soft POS, payments are made by tapping a chip card or any of its digital equivalents over a phone or tablet with Near Field Communication (NFC) built-in, which allows the devices to exchange content within close range. Today, most bank cards and Android devices have this feature, indicated by a radio wave image on the card or the phone’s settings.
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Soft POS technology has come at a time when people have limited access to cash. In light of the CBN’s move to redesign older denominations of the Naira (N200, N500, and N1,000 notes) and limits on weekly cash withdrawals by individuals and corporate bodies of N500,000 and N5 million, respectively, we envisage a marked increase in the adoption of digital channels for payments in Nigeria. For underserved businesses, Soft POS technology is the next best alternative – it is the fastest and most convenient way to receive card payments with a simple app and an NFC-enabled phone. This takes away the need for a hardware POS and the hassles associated with it. It also offers businesses the flexibility of transacting anywhere – in the markets, at depot stores, or wherever they might be, because the payment solution is accessible from the merchant’s mobile device. The Soft POS solution also comes with value-added services, such as automated reconciliations or e-receipt features, which help merchants to simplify their payments.
HabariPay’s Squad has weighed in all of these benefits in rolling out its Soft POS payment solution called SquadPOS – so that no merchant in Nigeria will be limited when it comes to receiving quick and secure card payments wherever they are.
SquadPOS: Digitalizing micro-transactions for small businesses
SquadPOS is a massive leap toward helping SMEs in Nigeria leverage simple yet advanced technology to receive card payments from customers in an affordable, seamless, and secure way. Merchants can use the SquadPOS solution to transform commonly used mobile devices into payment acceptance tools. Now, they can run their businesses from the convenience of a smartphone and create a frictionless payment experience without cash. Beyond receiving payments, SquadPOS also helps with accounting and reconciliation by automatically synchronising transactions into a comprehensive dashboard so merchants can track and manage revenue in real time. It also enables merchants to send instant e-receipts to customers to keep records of transactions.
As highlighted earlier, one of the main deterrents to digital payment adoption by small businesses is the inability to digitalise micro-transactions as most digital payment methods today like ATMs and POS are not optimised for micro-payments. Despite being petty transactions, micro-transactions are the backbone of the economy and keep these small businesses going. SquadPOS aims to shift this narrative by enabling merchants to receive as little as N10 for a transaction to cover any amount a customer could pay with cash. The goal is to digitalise every payment, no matter how little, and reduce the dependency on paper money by democratising access to point-of-sale terminals.
Research shows that the estimated number of smartphone users in Nigeria is pegged at roughly 25 and 40 million and should triple within five to six years. With this in view, there is an indication that Soft POS technology has a large market for usability. Players like HabariPay plan to drive more awareness and adoption to help people convert their current compatible devices into payment terminals without cash.
HabariPay said it is now focused on educating small business owners about the benefits SquadPOS can offer their businesses and the short and long term. The company has been to several markets in the country, reaching over 10,000 merchants so far, to teach them about the benefits of adopting digital payments in a time as this, sensitising them about how to use SquadPOS to receive card payments in the absence of cash and equip them with tools to accept digital payments for their businesses.
“Every business must understand that we now live in a cashless world. Regardless of scale, it is advisable that cash-reliant SMEs begin to adopt digital technologies to accept payments and improve their processes and customer experiences,” the company said in a statement. “Solutions like SquadPOS are there to help merchants thrive in a “cashless economy” by offering a convenient tool that helps them get paid anytime, anywhere. This technology is a game-changer because it can be used by any type or scale of business, regardless of the location; be it a restaurant, boutique, kiosk, street vendor, hair salon, or cab-hailing service. The focal point is getting the technology into the hands of every merchant – an effort that requires the participation of all stakeholders – the regulators, fintech companies, agency networks and banks, to accelerate adoption.”