February 14, 2023

How cashless policy can survive in Nigeria – FintechNGR  

By Biodun Busari

The Fintech Association of Nigeria, FintechNGR has said information technology (IT) is pivotal to driving the survival of the cashless policy in Nigeria.

FintechNGR stated further that the cashless economy will be determined by the number of benefits provided to encourage mainstream adoption.

The association made these remarks in its FintechNGR Thought Leadership Series while reacting to the new naira policy of the Central Bank of Nigeria (CBN) introduced to operate alongside the cashless policy.

FintechNGR, while commending the CBN and the federal government for the policy, quickly added, that the current hardships unleashed on Nigerians because of the timing are considered insensitivity on the part of the apex bank.

It partly read, “The drive for a cashless economy at all costs by the CBN is strategic, however, the execution and results have been described by many pundits as suicidal.

“The cash swap is being driven on steroids. This may be perceived to signal insensitivity and a lack of consideration of key stakeholders by the apex bank.

“A cashless policy should bring about greater ease and convenience of payments, but is the opposite effect materializing in Nigeria today.”

Projecting its views on how the policy could thrive, FintechNGR said, “One thing is clear. When adopting a cashless policy (or any other policy for that matter), it is more important to have a customer-centric approach rather than a technical one.

“The success of a cashless policy is directly linked to the incentives offered to encourage mainstream adoption.

“For example, the Swedish government made sure that the cost of transacting with cash was more than the cost of making card payments. There is also a trust factor that needs to be considered when it comes to convincing people to go completely digital.”

Speaking on IT, FintechNGR said, “a key question needs to be asked: ‘can our current IT infrastructure handle the increase in transaction volumes if a significant chunk of the population moves towards digital payments?”

“If the answer is yes, then half of the anticipated problems are gone already. If the answer is no, then perhaps more efforts must be made to prepare a country with a large population like Nigeria to adopt a cashless policy,” it said.

“The rise of financial technology (FinTech) companies in Nigeria has revolutionised the way we perceive and consume financial services. Nigeria is now the third African country with the most progress in FinTech activity, following South Africa and Kenya. 

“Digitally-led banks and FinTechs with strong e-payment capabilities are leveraging the cashless strategy to drive further growth and focus on operational efficiency,” it added.