By Dr Ramanathan Murugesan

On a humid afternoon in Lagos, 24-year-old Adaeze sways inside a crowded danfo bus—one hand clinging to a metal rail, the other navigating her phone. Within seconds, she transfers her fare to the conductor. No notes. No coins. No delay.

A few kilometres away, at a roadside fruit stall, the future stalls.

A customer reaches for his phone. “Transfer?” he asks.

The vendor doesn’t hesitate. “No network. Bring cash.”

In that moment lies the paradox of modern Nigeria.

Digital payments are booming, yet cash refuses to fade. After more than a decade of policy reforms and fintech disruption, Africa’s largest economy is not cashless. It is something far more complex—a nation suspended between innovation and infrastructure, trust and uncertainty.

Policy Spark, Behaviour Shift

Nigeria’s cashless journey began in 2012, when the Central Bank of Nigeria rolled out policies to curb cash usage and modernise payments.

On paper, the transformation is undeniable.

Data from the Nigeria Inter-Bank Settlement System shows electronic transactions rising steadily year after year. The NIBSS Instant Payment platform has become the backbone of real-time transfers, powering everything from salary payments to street-level commerce.

Traditional banks—Access Bank, Guaranty Trust Bank (GTBank), Zenith Bank, and United Bank for Africa (UBA)—have reinvented themselves as digital-first institutions. Alongside them, fintech disruptors like Flutterwave, Paystack, Opay, and PalmPay have democratised payments, turning smartphones into wallets.

In Nigeria’s cities, cash is no longer king—it is contested territory.

Fintech’s Quiet Revolution

If policy lit the spark, fintech fanned the flames.

For decades, millions of Nigerians existed outside the formal banking system. Fintech changed that—swiftly and at scale. With minimal paperwork and mobile-first platforms, financial services reached markets banks had long ignored.

Nowhere is this more visible than in the explosion of PoS agents. Across urban streets and rural corners alike, small kiosks double as micro-banks, handling deposits, withdrawals, and transfers.

For small businesses, this shift has been transformative. Digital payments reduce the risks of holding cash, expand customer options, and streamline operations.

Yet the revolution is uneven.

While Lagos and Abuja surge ahead, large parts of rural Nigeria remain on the margins—held back not by resistance, but by access.

Pandemic Acceleration, Structural Exposure

Then came COVID-19—a crisis that doubled as a catalyst.

Lockdowns and health concerns pushed millions toward contactless payments. What began as necessity quickly hardened into habit, particularly among younger Nigerians.

E-commerce surged. Digital wallets swelled. Platforms like Flutterwave and Paystack recorded spikes in transaction volumes as businesses rushed online.

But beneath the growth lay fragility.

The system expanded faster than the infrastructure supporting it.

The Naira Redesign Stress Test

That fragility was laid bare during the 2022–2023 naira redesign.

As old notes were withdrawn and new ones rationed, Nigeria plunged into a cash crisis. ATMs ran empty. Banking halls overflowed. Frustration boiled over.

In desperation, millions turned to digital channels.

Transaction volumes surged—but so did failures.

Across banking apps and fintech platforms, transfers hung in limbo. Alerts delayed. Systems crashed under pressure. From GTBank to Opay, the message was the same: Nigeria’s digital rails were not yet built for shock.

The episode was more than a policy misstep—it was a stress test the system failed.

Infrastructure: The Achilles’ Heel

At the heart of Nigeria’s cashless struggle lies a stubborn truth: infrastructure still lags ambition.

Unreliable electricity disrupts devices, servers, and networks. Patchy internet connectivity turns simple transfers into uncertain gambles. For millions, “transaction failed” is not an exception—it is routine.

For a roadside trader, a failed payment is not a technical glitch. It is lost income.

Cash, by contrast, is brutally simple. It works—every time.

Trust: The Currency Behind the Currency

Beyond infrastructure lies an even more delicate issue: trust.

Digital systems promise speed, but not always certainty. Fraud, phishing, and account breaches continue to erode confidence. When transactions fail, reversals are often slow and opaque.

For many Nigerians—especially those outside the tech-savvy demographic—this uncertainty is costly.

Cash offers something digital still struggles to replicate: finality.

No pending alerts. No reversals. No doubt.

The Informal Economy’s Quiet Resistance

Any conversation about Nigeria’s payment future must confront its informal economy—vast, dynamic, and deeply cash-driven.

From open markets to roadside workshops, a significant share of economic activity operates beyond formal systems. Here, cash is not just convenient—it is strategic.

Digital payments leave trails. Cash offers discretion.

For many, the choice is not about technology, but about control.

Bringing this sector into the digital fold will require more than apps and policies. It will demand trust, incentives, and a system that works reliably at the last mile.

A Nation Split by Access

Nigeria’s digital transition is also generational—and geographical.

Urban youth have embraced fintech with speed and ease. Smartphones, apps, and instant transfers are second nature.

But in rural communities and among older populations, adoption lags. Limited access to devices, connectivity, and digital literacy continues to widen the gap.

The result is not a unified shift, but a fragmented transition.

Cashless or Cash-Light?

So, has Nigeria gone cashless?

Not quite.

What has emerged instead is a “cash-light” economy—one where digital payments thrive, but cash remains indispensable.

Consumers toggle between both worlds. When networks are stable, digital wins. When systems falter, cash takes over.

This duality is not a failure. It is a reflection of reality.

The Road Ahead

Nigeria’s path to a truly cashless economy will not be decided by policy alone.

It will depend on power supply that does not fail, networks that do not drop, and systems that do not crash under pressure. It will require stronger consumer protection, faster dispute resolution, and deeper financial literacy.

Most importantly, it will demand trust—earned not through promises, but through performance.

An Economy in Motion

Nigeria is no longer where it was a decade ago. Digital payments have moved from the margins to the mainstream.

But cash remains embedded—resilient, reliable, and, for many, indispensable.

For now, the country exists between two financial realities—neither fully digital nor entirely cash-based.

It is an economy in motion, where the future of money is being shaped not just in boardrooms and policy circles, but in buses, markets, and roadside stalls.

And in Lagos, that future is decided every day—in a simple, familiar choice: Pay with a phone, or pay with cash.