Since the announcement of cash limit,withdrawals, deadline and redesign of naira notes, the figure of Nigerians doing online transactions has increased.
Nigerians have faced severe cash shortages in recent weeks as a result of the Central Bank’s decision to redesign higher naira denominations and phase out old notes.
The original deadline for using the old notes was January 31, 2023, but this was later extended. The Central Bank of Nigeria (CBN) has taken an aggressive approach to increase the adoption of cashless transactions in the country, by reducing the volume of higher denominations in the economy, lowering the over-the-counter withdrawal limit, and redesigning the new currency notes in general.
However, due to the limited number of new notes in circulation, cash transactions have been difficult to come by in the country, with many people having to wait in long lines at banking halls, ATMs, and Point of Sale (POS) machines to obtain cash. Some have had to pay up to 30 per cent more to withdraw money from POS machines across the country.
A recent data from the Nigeria Inter-Bank Settlement Systems (NIBSS) revealed that Nigerians registered mobile transactions worth N2.37 trillion in January 2023, representing a staggering 125 per cent increase over the same period.
However, with the ongoing cash shortage Nigerians have had to experience hardships with electronic transactions ranging from downtime on banking apps or the mobile networks to many other issues making payments inconvenient.
Nigeria would have recorded more growth than it did in January, given the need for Nigerians to complete transactions despite a lack of cash. The banking sector’s deficit has frustrated many Nigerians in the last two weeks, as they have experienced significant delays with their mobile transactions, including unsuccessful debited transfers, inability to access bank mobile apps, and network failures, among other things.
Last week a major telecom operator suffered a downtime that left many Nigerians stranded and another commercial bank was having issues with her customers unable to send or receive payments. This has been the challenge of many Nigerians who just want to transact seamlessly.
The increased usage of e-payment channels over the past few weeks has revealed the insufficiency of banks and other financial institutions technology architecture to handle the volume of traffic.
It has now become even more pertinent for banks and other financial institutions to expand and improve their infrastructure in order to accommodate more Nigerians who want to adopt cashless payments. The CBN should mandate commercial banks to upgrade their infrastructure for e-payment solutions to avoid frustrating customers and workers to ensure success of cashless policy implementation.