Nigerians are increasingly embracing the use of electronic payment platforms as the Central Bank of Nigeria has insisted on the February 10 deadline for the expiration of old naira notes, even as the scarcity of the new ones lingers.
Industry stakeholders say this could be a positive for Nigeria’s payment system, the cashless policy the Central Bank of Nigeria (CBN) is aggressively pursuing and the economy. They also stressed the need to resolve as quickly as possible the present cash crisis in the country.
Bank employees confirm that they have seen more electronic payments in the form of cash transfers, Point of Sale (PoS) transactions and use of online banking platforms. They said more people have opened bank accounts.
BusinessDay visited some shops and local markets in Abuja and saw mini marts and retailers accepting transfers from customers or giving them options to pay through the use of PoS agents around.
“Now traders and small business operators are open to alternative payment options like transfers and PoS machines,” a fruit seller at the popular Utako market in Abuja, who identified himself as Gambo Abubakar, told BusinessDay.
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“It’s been very tough but we just have to find a way to survive, otherwise we’ll shut down business,” he added.
A meat seller in Kuje, one of the suburbs in the capital city, who identified himself simply as Ahmed, made an arrangement with a PoS agent near him to enable customers without cash to make payments.
“When my customers pay, I write down the amount and at the end of the day, I transfer everything to my account at once, while I pay small money to the PoS operator but some of my customers still pay with cash,” he said.
Madam Dora, who retails different types of drinks in Lugbe, said she had started accepting transfers from customers.
“Many customers do not have cash but are willing to buy and I cannot be losing customers so I accept transfers too, me too I buy things using transfer or PoS now because many traders now have PoS machines,” she said.
She added that the only challenge she has encountered so far was issues of failed transactions due to poor network.
Following the redesign of N200, N500 and N1,000 notes, the CBN commenced the distribution of the new notes on December 15, saying the old ones would cease to be legal tender on January 31, 2023. The deadline was later extended to February 10.
However, poor circulation of the new notes amid the rush to deposit the old notes resulted in the scarcity of cash across the country, with adverse impact on businesses, trade and other daily activities that require exchange of cash.
Accessing the new naira notes has been difficult for most Nigerians, as many automated teller machines are not dispensing cash.
Amid the scarcity, filling stations, supermarkets, mini marts, business and transport operators have all issued notices to their clients and passengers regarding the rejection of old notes, with many of them providing PoS machines or account numbers for transfer options.
Jimoh Sola told BusinessDay that she was able to withdraw only N10,000 and has resorted to electronic payments for transactions worth N1,000 and above.
“Now when I go to the local market, before buying from someone I’ll ask if they have a bank account that I can transfer to and surprisingly more people are open to digital transactions although there are still some that remain adamant on collecting the naira notes,” she said.
As at August 2022, data from the Nigeria Multiple Indicator Cluster Survey carried out by the National Bureau of Statistics (NBS) showed that only 39 percent of men and women aged between 15 and 49 surveyed had bank accounts.
It said only 59.7 percent of households had bank accounts and 81.5 percent of these bank account owners were urban dwellers while rural dwellers constituted 40.5 percent.
Aderemi Adekunle, a Lagos-based business analyst, told BusinessDay that prior to accepting digital payments, many traders had incurred losses due to their initial refusal.
“As it is now, if you do not have an account to make transfers with and you do not have an ATM card, you will be stranded because you cannot access the naira notes and you cannot carry out transactions either,” he said.
In 2012, Nigeria developed its first financial inclusion strategy with the target of bringing up to 80 percent of its population into the financial system.
Although it made progress, it did not hit this target and has subsequently pushed the target to 95 percent financial inclusion by 2024.
The CBN aims to achieve this target through policy frameworks and initiatives such as Revised National Financial Inclusion Strategy, National Strategy for Leveraging Agent Networks for Women’s Financial Inclusion, National Fintech Strategy, Nigeria Financial Services Maps, and Payment System Vision 2025.
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