The world is going cashless: Are you ready?

Whether you like it or not, our world is becoming cash free. How prepared are you for change? he Central Bank of Nigeria’s (CBN) cashless policy commenced on January 1, 2012 in a phased approach that featured Lagos as the pilot state because of its “financial sophistication, the presence of an enabling infrastructure, volume of cash transactions and exposure of residents to alternative payment channels.” The cashless policy aims at reducing the volume of cash in circulation by transforming our heavy reliance on cash to a digital electronic cashless country.

In a circular, dated September 17, 2019, the CBN’S Director of Payments System Management Department, Sam Okojere, instructed deposit money banks to implement the policy starting from September 18, 2019. “Charges on deposits shall apply in Lagos, Ogun, Kano, Abia, Anambra, Rivers states and the FCT, in addition to already existing charges on withdrawals, effective September 18, 2019.”

The CBN’S cashless policy will be extended nationwide from March 2020. According to the policy, “a 3% processing fee will be charged for withdrawals of amounts above N500,000 for individual accounts, while 2% will be charged for deposits. For corporate accounts, a processing fee of 5% will be charged for withdrawals, and 3% for deposits of amounts above N3 million.”

All over the world, the trend has been for governments and financial institutions to pursue policies to reduce the volume of cash in the system. In some developed countries, one can do almost entirely without the use of hard cash and electronic means of payments far outstrip cash transactions in much of the industrialized world today; indeed one is regarded with some consternation, even suspicion, should you wish to make a purchase with large amounts of cash.

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As we inch closer towards cashless Nigeria where digital or electronic money will eventually take precedence over physical money, how prepared are you? How would you feel if you were told that you would no longer be able to use paper money and would have to rely on electronic technology for all your transactions? We all like the speed and convenience of e-commerce, but we also love the look and feel of our hard cash in our wallets; it is tangible and feels real and it gives one a sense of really possessing something.

Technology has changed so much in our lives, the greatest impact be

Ting the actual way that transactions take place. The world of banking and finance has been one of the greatest beneficiaries of technological innovations and advancements in global payment systems.

There are many benefits from doing away with “old fashioned cash.” It is a means of curbing corruption, money laundering and other cash related financial crimes, global terrorism and cross-border crimes. It also helps to address the enormous security challenges and the exorbitant cost of cash management logistics to the financial services and banking industry. Businesses will embrace it as a means of receiving instant payments, cutting their expenses and institutionalizing operational efficiency, thereby increasing their revenues. The rest of us should embrace electronic, internet and mobile banking for the speed, convenience, security, and the extraordinary degree of efficiency that they provide.

The internet has revolutionized banking and personal financial management in many ways. Nowadays, we are all so busy in our work lives, that there simply just isn’t the time to visit the bank. If you have not yet embraced your bank’s internet banking service, there are some compelling reasons to do so. With internet connectivity, you have unlimited access to your bank accounts and can carry out most of your routine banking transactions at your convenience; you can check your account balances, pay bills, make transfers, and manage your various accounts with a few simple clicks from your computer, your laptop, your tablet, or your cell phone.

Do you use your bank’s electronic banking services, which automate processes relating to your financial transactions for convenience and efficiency? The most common forms of electronic payments are telephone banking, internet banking and plastic cards; credit cards, debit cards and automatic teller machine (ATM) cards instead of currency.

Debit and credit cards, have transformed our financial lives; one can effect a host of transactions without ever having to visit a bank. Whether it is from a Point of Service (POS) portal at your nearest grocery shop, an increasing number of merchants, including shops, restaurants, clubs, hotels etc will accept your card.

Mastercard, Visa, and Verve are at the forefront of card technology in Nigeria and have changed the way we pay for transactions. Apart from enabling you to access local currency in Nigeria, you can access foreign exchange from your Naira account while abroad, with limits. Denominated in Naira, they can be used at ATMS or point of sale (POS) terminals globally where the Visa or Mastercard signs are displayed to either pay for goods and services or access foreign exchange. Linked to your current or savings account, all transactions reflect instantly.

With the future looking cashless, as electronic payments replace cash, one must also consider some of the enormous challenges ahead. We must all concern ourselves with cyber security issues. Technology all over the world is vulnerable to glitches, outages and mistakes. This is even more so in an environment where the infrastructure has not kept apace with the transformational growth of technology. We must all thus be conscious of an increased risk of crimes such as identity theft, fraudulent transactions and data breaches, due to the higher volume of cashless transactions leaving us all more vulnerable and exposed.