Photograph — Bloomberg

Nigeria’s new cashless policy will take effect on the 1st of April, 2020. The initiative is intended to provide safe and efficient mechanisms for sending and receiving payments with minimum risks to the Central Bank, payment service providers, and end-users. 

In a circular titled Re: Implementation of the Cashless Policy that was addressed to all banks in September, the CBN announced the impending commencement of charges on deposits in addition to already existing charges on withdrawals. The charges would attract 3 percent processing fees for withdrawals and 2 percent processing fees for lodgements of amounts above N500,000 for individual accounts.

Similarly, it is also expected that corporate account owners will be required to pay 5 percent processing fees for withdrawals and a 3 percent processing fee for lodgements of amounts above N3,000,000.

In this regard, the commercial banks have begun issuing reminders to their customers ahead of the implementation date. Guaranty Trust Bank Plc sent out a notification to its customers informing that deposits and withdrawals that exceed the limits set by CBN will be charged. The extra charge is different from the already existing charges on withdrawals, the statement read. 

The bank, in the circular, argued that going cashless would help minimize the crime rate in the country while helping to authenticate and formalize transaction processes.

Other advantages of this policy are easy to come by. Research indicates that a 10 percent increase in the efficiency of payment systems can raise national gross domestic product by 1 percent, barring unforeseen shocks. 

Additionally, the policy will drive financial inclusion to new heights because customers of banks will have greater convenience and access to banking services and credit, corporations will experience better access to capital and the government will benefit from better tax collection while reducing the costs of printing cash.

However, it has equally received criticism from Nigerians. Many claimed the policy is not well stipulated as the bank refuses to give exactly what it all entails. As far as these people are concerned, any extra charge for withdrawing and depositing money is not welcome.

Despite the benefits that will come with the cashless initiative, the government and bank will have to think up ways to handle the obvious pitfalls that can be associated with such an initiative. As a reminder, Nigerians should be ready to embrace the new development as it tends to drive financial inclusion.

By Ahmed Iyanda.

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