An incursion into the cashless policy in Nigeria

The cashless policy was introduced into the Nigeria banking system in the year 2012 by the incumbent Emir of Kano, HRM. Sanusi Lamido Aminu Sanusi with a mandate of relieving customers of various commercial banks from the long queue in various banking halls, reduction of theft, among other noticeable challenges.
Banks has worked immensely in this regard by developing simple smartphone applications that can aid their customers to make electronic transfer of funds, payment of bills; ranging from their wards school fees to paying of utility bills etc. In other to ensure customer satisfaction, some banks have developed ways to do electronic transaction without the need of having a web enabled phone.

According to the epayment data released by the Nigerian Inter-Bank Settlements System Plc (NIBSS) Nigerians transacted well over N10 trillion deals on their electronic fund transfers platforms within the first two months of this year.

This huge transaction was carried out only on two major platforms, which are accessible to banking customers either on the mobile devices or on other Internet-enabled devices. The two platforms are the NIBSS Electronic Fund Transfers (NEFT) and the National Instant Payment (NIP).

In respect to the released data of NIBSS, bank customers transferred N4.087 trillion and N4.337 trillion in January and February respectively this year. Variably on NIP and NEFT platform, transaction values of N1.003 trillion and N907 billion were made in January and February respectively. In January and February last year, the value of transactions on the two platforms was N6.735 trillion.

According to the Chief Executive Officer, NIBSS, Mr. Ade Shonubi, said the increase in NEFT and NIP usage and the volume of transactions done monthly reveals a major progress being recorded in the country’s e-payment industry. “NEFT is an irrevocable fund transfer instruction where a bank simply captures their customer’s funds transfer instructions electronically.

He further revealed, that the bank will first debit the customer’s account to ensure that the funds are set aside, after which such a bank customer’s instruction, along with other customers’ instructions, are sent to NIBSS as an electronic file for onward processing,” he noted. Unlike NEFT, Shonubi pointed out that NIP is, so far, the most innovative and revolutionary e-payment solution designed by NIBSS to service the banking industry.

Despite the outcry of electronic scams, bank customers still depend largely on the use of the various fund transfer platforms to transacts their financial obligation at their own convenience.