The world is going cashless whether you are ready or not. All the signs are towards encouraging everyone to go cash-free. Increasingly, these initiatives will impact everyone.
The Central Bank of Nigeria’s (CBN) cashless policy commenced on January 1, 2012 in a phased approach that featured Lagos as the pilot state. In a circular, dated September 17, 2019, the CBN’s Director of Payments System Management Department, Sam Okojere, instructed deposit money banks to implement the policy starting from September 18, 2019 in certain states across Nigeria. These charges on deposits shall apply, in addition to already existing charges on withdrawals.
By March 2020 the CBN’s cashless policy will extend nationwide. According to the policy, “a 3% processing fee will be charged for withdrawals of amounts above N500,000 for individual accounts, while 2% will be charged for deposits. For corporate accounts, a processing fee of 5% will be charged for withdrawals, and 3% for deposits of amounts above N3 million.”
All over the world, the trend has been for governments and financial institutions to pursue policies to reduce the volume of cash in the system. In some developed countries, one can do almost all financial transactions cashless.
Technology has changed so much in our lives, the greatest impact is the actual way that transactions take place. The world of banking and finance has been one of the greatest beneficiaries of technological innovations and advancements in global payment systems.
As we inch closer towards cashless Nigeria where digital or electronic money will eventually take precedence over physical money, how prepared are you? How would you feel if you were told that you would no longer be able to handle cash and would have to rely on electronic technology for all your transactions?
There are many benefits from doing away with “old fashioned cash.” It is a means of curbing corruption, money laundering and other cash related financial crimes, global terrorism and cross-border crimes. It also helps to address the enormous security challenges and the exorbitant cost of cash management logistics to the financial services and banking industry.
The convenience of Going Cashless
Nowadays, we are all so busy in our work lives, that there simply just isn’t the time to visit the bank. If you have not yet embraced your bank’s internet banking service, there are some compelling reasons to do so.
With internet connectivity, you have unlimited access to your bank accounts and can carry out most of your routine banking transactions at your convenience. You can check your account balances, pay bills, make transfers, and manage your various accounts with a few simple clicks from your computer, your laptop, your tablet, or your cell phone.
The most common forms of electronic payments are telephone banking, internet banking and plastic cards; credit cards, debit cards and automatic teller machine (ATM) cards instead of cash.
Debit and credit cards have transformed our financial lives; one can carry out a host of transactions without ever having to visit a bank. This includes using Point of Service (POS) at your nearest grocery shop and various shops, restaurants, clubs, hotels etc.
Businesses will embrace it as a means of receiving instant payments, cutting their expenses and institutionalizing operational efficiency.
Mastercard, Visa, and Verve are at the forefront of card technology in Nigeria and have changed the way we pay for transactions. Apart from enabling you to access local currency in Nigeria, you can access foreign exchange from your Naira account while abroad, with limits. Denominated in Naira, they can be used at ATMs or point of sale (POS) terminals globally where the Visa or Mastercard signs are displayed to either pay for goods and services or access foreign exchange. Linked to your current or savings account, all transactions reflect instantly.
Cyber Security Issues
We must all concern ourselves with cybersecurity issues. Technology all over the world is vulnerable to glitches, outages and mistakes.
We must all thus be conscious of an increased risk of crimes such as identity theft, fraudulent transactions and data breaches. Higher volume of cashless transactions leaves us all more vulnerable and exposed.
Are your smartphones, computer and other devices password protected? If your password or PIN [Personal Identification Number] is compromised, this could lead to devastating losses should unscrupulous people gain access to your financial information.
Password or PINs
Do not share your passwords or PINs with anyone. If you might forget them and need to write them down, then store them securely. Change your passwords and PINS periodically and use different codes for different accounts. Be creative about your choice of passwords and PIN numbers; family birthdays and names are very easy to decipher so avoid using those.
In addition, secure your computer with a firewall and security software packages that have anti-virus and anti-spam features. If you are technologically challenged, an IT specialist or a techy friend can help you download and install this. Choose someone you can trust!
Requests for Personal Information
Ignore phone calls or email requests for personal information. Your bank and other legitimate companies will never request for sensitive information such as passwords and PINs by email; these are usually fraudsters attempting to defraud you. Contact your bank directly and report such incidents.
There is no guarantee that your financial information will be completely secure even if you put all these basic measures in place. However, you certainly stand a better chance of protecting your personal finances from getting into the wrong hands.
It is important to begin to become familiar with the alternative electronic payment channels available to you and decide which will best suit your personal financial habits and circumstances.
As you embrace going cashless; start by reducing your dependence on cash. Don’t get left behind. Be deliberate about embracing technology.
Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.
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