For years, Nigeria’s march towards cash-less economy was greeted with mixed feelings of approval and outright rejection. However, with a benefit of hindsight, many people have realised that the gains outweigh the pains. The plan by the Central Bank of Nigeria (CBN) to redesign N100, N200, N500, N1,000 banknotes and issue new ones in a major push to tackle counterfeiting is expected to further deepen the crave for digital payment. More Nigerians are expected to abandon cash-based transactions in the next few months as the policy unfolds. Assistant Business Editor COLLINS NWEZE writes.
Those thinking that cash will continue to dominate payment in the globalised world should have a rethink. But while the use of cash for transactions continues, more bank customers are now thinking of the efficiency and safety that e-payment brings to their lives and businesses.
The plan by the Central Bank of Nigeria (CBN) to redesign the naira and improve payment infrastructure is expected to boost e-payment.
CBN Governor Godwin Emefiele said currency management is a key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) of the CBN Act 2007, hence, the CBN’s decision to redesign N100, N200, N500, N1,000 banknotes to have better control of currency in circulation.
Emefiele said there has been significant hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation are outside the vaults of commercial banks; worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability and increasing ease and risk of counterfeiting evidenced by several security reports.
He said recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier.
“In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes. Although global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, the naira has not been redesigned in the last 20 years.
Therefore, the integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.
“In recent times, however, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country,” he said.
Banks are already advising their customers to use alternative digital channels for their transactions.
Ecobank Nigeria, First Bank, Unity Bank, Wema Bank and Access Bank, among others, have reiterated the gains of going cash-less.
For instance, customers of Ecobank have been encouraged by the bank to utilize its digital self-service solutions, including Ecobank Mobile App, Ecobank Online, EcobankPay, Ecobank OmniPlus, OmniLite and the RapidTransfer App without having to visit branches. This is as part of efforts to ensure social distancing which will help curtail the spread of COVID-19.
According to the bank, customers can “Bank from anywhere” by utilizing digital solutions to easily access their bank accounts, make payments, transfer funds, process salaries, and carry out other ancillary banking transactions from the comfort of their homes and offices without visiting branches. The bank advised that its branches remain open and available to customers who choose to visit to carry out their transactions. The bank emphasised that its branches are equipped with all prescribed preventative measures.
Also, Wema Bank is taking the lead in technological banking with its ALAT digital platforms. Its new New Quick Response (NQR) Code by ALAT also opens more payment opportunities to e-payment customers.
Obviously, technology or digital innovation, seen by many as disruptive, also come with challenges to open doors for more future opportunities.
With technology virtually taking over businesses and social activities in the 21st Century, the banking sector as a critical enabler of socio-economic growth is not an exemption from the innovation orchestrated by this phenomenon.
Analysts explained that given the impact of disruptive technology, the financial services sector in Nigeria has also undergone and significant transformations with banks moving away from traditional over-the-counter transactions to smart, tech-driven digital services and products.