Over recent years, there has been this talk about the cashless economy by the Central Bank of Nigeria. Even though this is being talked about by lots of financial stakeholders, individuals and companies alike, what exactly does this mean to the common Nigerian and what are the benefits therein and what does it hold for the future?
Basically, a cashless economy involves all transactions in an economy done through digital and electronic systems. These systems include debit cards, credit cards or some advanced methods like the Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) and many more. In common terms, it means using just your “ATM” card, your mobile application or your bank’s USSD codes to carry out transactions, even for your taxi fare…. lol!
However, the implementation of a cashless economy is not as complicated and high handed as assumed. It is though saddled with lots of benefits. Running a cashless system doesn’t mean shortage of cash or decline in the economy. It simply means running all or most of the usual transactions, but this time, digitally, electronically or over the internet.
More Interestingly, there are lots of benefits of a cashless system to the individual, organizations and government alike. Some of us over time have enjoyed the great convenience provided by these cashless facilities. Like when you have to shop for groceries impromptu with your debit card, through POS, without going to the bank to withdraw cash first.
The issue of theft and loss of money has also reduced over time. It is easier to move around with large sums of physical cash. Also, there has been tremendous reduction with issues of money laundering. This is because there is going to always be a trail, paper or not, about almost every transaction. Also, the amount of time spent carrying, depositing and storing cash is eliminated. The foreign exchange market has also grown and developed as a result of the enforcement of cashless transactions on some international platforms.
Notwithstanding, there are some other cons inclusive in this cashless system. One example is the exposure of personal information across those electronic systems. This can linger to the point of unethical hackers getting hold of it.
Individually, people now have less control on their spending due to easy abuse of convenience. What about the banks and their outrageous charges or the exclusion of people who are not tech savvy in the whole system?
Conclusively, having a cashless system in full operation in Nigeria might take longer than normal owing to the glaring situation of stagnancy, illiteracy and flawed banking system. But all in all, it is a welcome development as long as I find a way to forget my bank USSD code and top-up code, that’s all!