The art of progress is to preserve order amid change, and to
preserve change amid order.
----Alfred North Whitehead.
First it was the introduction of Automated
Teller Machine (ATM) which was also called ‘any time money’. It was a welcome
development for most people because it made it easier (especially for traders)
to travel without the risk associated with carrying cash around. It made
banking transactions easier, no more long queues stretching for hours, just to
withdraw one thousand naira and it comes in handy during emergencies, etc. The
advantages of the ATM cannot be over emphasised.
While many people applauded the advent of
ATM, many others found and still find it difficult to use because of its
attendant difficulties/ challenges. Either the targeted users are illiterates
or computer illiterates or that some see it as some stressful “oyibo magic”
they would not trade for the routine they are used to. My parents for instance
fall in the latter category; they don’t use ATM cards, not because they are
illiterates but because they simply prefer the good old way of signing their
cheques or filling withdrawal slips and collect their cash, they feel it’s for
the modern generation; funny resistance to change. Also funny is that every
once in a while there arise the issue of one person being on an ATM machine
longer than necessary because he or she doesn’t know what key to press or he
has forgotten his four digit pin, at times it gets annoying.
Even more annoying or frustrating is when
the ATM does not dispense cash due to some technical fault, but the user’s
account is debited anyway. Worse still is the ATM fraud; a liability banks
hardly take responsibility for, even in cases where the owner has proved beyond
reasonable doubt that the PIN compromise could not have emanated from their own
actions.
One
can go on and on with the stress associated with the use of the ATM. but this
is only a detour. This piece is about the Cashless Society Policy. ’Which one
is cashless policy again?’, one may ask.
Ok. Let’s get some education.
The cashless policy is simply a system
introduced by the Central Bank of Nigeria (CBN) through e-payment systems, to
reduce the usage of physical cash in financial transactions both deposits and
withdrawals. ‘’The system allows a customer to withdraw or deposit a maximum of
N500, 000 for individual and N3, 000,000 for corporate bodies daily
without charge. Any transaction above these amounts will attract cash penalty
of N 1000(for individuals) and N 200 per N
1000 (for corporate organisation). This new policy, to be effective nation-wide
from June 2012, aims at reducing, not eliminating, the amount of physical cash
(coins and note) circulating in the economy’’.
CBN’S PROJECTED ADVANTAGES OF THE CASHLESS POLICY:
1. To drive development and modernization of our payment system in line
with Nigeria’s vision 2020 goal of being amongst the top 20 economies of the
world by the year 2020.
2. To reduce the cost of banking services (including cost of credit)
and drive financial inclusion by providing more efficient transaction options
and greater reach.
3. To improve the effectiveness of monetary policy in managing
inflation and driving economic growth.
4. To curb some of the negative consequences associated with the high
usage of physical cash in the economy including;
a) High cost of cash
b) High risk of using cash
c) High subsidy
d) Informal economy
e) Inefficiency and corruption[1]
The advantages are enormous but we must also state here that as
mouth-watering as the advantages are, there are certain difficulties/
challenges associated with the cashless policy some of which are:
1. Lack of awareness/ illiteracy- ignorance of the law is no excuse but
ignorance of the fact is an excuse. Many people are not aware of how this
cashless policy works and why they should even use it.
2. Poor technological and communication infrastructure; particularly
supporting infrastructure like the presence of sufficient ATMs.
3. Fear of fraud associated with e-banking.
4. Underdeveloped legal and regulatory frame work governing e-commerce
generally and e-payments in particular.[2]
5. The peculiarity of some sectors of the economy like construction
companies that have to pay their staff cash on a daily basis, filling stations
that make a lot of cash on a daily basis and other businesses.
6. Low level of trust in the business environment, like for fear of
bounced cheques, business men will prefer cash.
7. It might also discourage people from banking entirely because some
people will rather dig holes and put their money, rather than pay penalty to
deposit them.
In conclusion, while we are not discouraging the government from
putting in place a cash- less society, we specifically implore it to put in
clear perspective the difficulties this policy might impose on its citizenry
with a cogent view of finding a practicable way to mitigate these difficulties,
before implementing the policy.
First things first.
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