Cashless Policies in Nigeria
Nigeria's citizens are on the verge of a cashless revolution. Last month, the government announced plans to ban cash transactions above N100,000. As a result, banks and other financial institutions have been pushing for the wider adoption of digital payments and banking services. The country's top banks have launched a range of new technology-based products such as instant mobile money transfers, automated teller machines, e-savings and micro-credit facilities.
We've seen a lot of press recently on the potential advantages of a cashless society. The idea is that by moving to digital payments, societies can reduce street crime, improve productivity, lower costs and increase tax revenues.
Few people oppose the idea of a cashless society. Many experts suggest that it will promote more efficient economic models and facilitate trade.
Other benefits include optimized shipping, reduced counterfeiting and a more secure society.
Although more and more sectors in society have gone cashless, some governments still encourage/support cash payments. The reasons are as follows:
Economic policy - Governments may use cashless policies to prevent capital flight (a.k.a. tax evasion) and to influence the monetary policy of the country. Many governments are concerned about the potential loss of tax revenue, especially when tax evasion is endemic in the country.
But what are the advantages of cashless policies to consumers?
Convenience: Cashless payments are convenient for consumers. With a smartphone, any currency and any product can be purchased at any time. The user can decide how much information he wants to reveal and only has to provide the necessary data.
We take a look at the trajectory of cashless payment and its impact on the general populace.
We start with the origins of cashless policies in Nigeria, and move on to discuss the pros and cons of such policies.
Cashless policies are assumed to be pro-business for obvious reasons, but many people tend to overlook some of their disadvantages. While some businesses might be able to flourish in an economy dominated by online payments, others who rely on paper transactions might not be so lucky.
In recent times, I have noticed a lot of people are becoming more reliant on cashless transactions or digital payments. And that's great!
Moving from cash to digital payments will help fight crime, increase tax revenue and eradicate poverty and even hunger.
Owing to the emergence of Mobile Money, a platform operated and maintained by some major telecommunication service providers in Nigeria, living without cash has never been so easy.
Listening to the government's Cashless policies; some Nigerians have been coerced into using electronic modes of payments with some merchants refusing to accept cash.
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