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‘Cash-based culture bane of digital payment system’


Currencies for cash-based transactions. PHOTO: FEMI ADEBESIN-KUTI

Despite improvements in the nation’s payments system landscape and increasing rate of adoption of alternative payment channels, Nigerians are still deep in their preference for cash transactions.

The latest figures from the Nigeria Inter-Bank Settlement System (NIBSS), put the total value of transactions on automated teller machines (ATMs) at ₦1.5 trillion in first quarter (Q1) 2019, while mobile money operations and web payments were ₦810.1 billion and ₦107.6 billion respectively.

For the Deputy Managing Director of eTranzact International Plc., Hakeem Adeniji-Adele, the Nigerian culture and penchant for cash transaction is the bane of digital payments in the country.


Adeniji-Adele said the figures point to the fact that Nigeria is still predominantly a cash-based economy, noting that in Q1, there were more transactions on electronic transfer on the NIBSS Electronic Fund Transfer and NIBSS Instant Pay (NIP), than there were on Automated Teller Machines (ATMs), even though both options had bank branches as part of their channels.

“So far, the Central Bank of Nigeria (CBN) has granted 79 licences to players in the payment system, while another 26 have approvals-in-principle, questioning the level of cash circulating in the country.

“Nigerians love to handle tangible money, it’s a mindset thing,” he stated.

He pointed out that the total value of transactions using ATMs in Q1 2019 and the fact that it’s almost impossible to go a day without cash in Nigeria, lends credence to the claim that the country is predominantly a cash-based economy.

eTranzact chief believes the culture is being eroded as this aligns with NIBSS’ recent figures in comparison with Q1 2018 where ATM transactions with a total value of ₦1.57 trillion was higher than Q1 2019, by ₦70 billion.

He called on players in the digital payment system to develop products and services according to people’s culture, adding: “The people that should be enabled are not because the ecosystem hasn’t really grown that much to service the under-banked and unbanked.”

According to him, there is need to understand that a culture is in place and technology has to be built to fit it, while the future of digital payment in the country should be collaborative.

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