Achieving a truly cashless economy

The high number of failed transactions on Automated Teller Machines (ATMs), Points-of-Sale (PoS) and online service portals experienced by Nigerian bank customers during the last Christmas and New Year holidays, estimated to be in the thousands, are clear indications that it is not yet Uhuru for the country’s cashless policy. The policy, which began at the pilot phase in Lagos in 2012, is at best still work-in-progress and a lot more still needs to be done.
The hiccups in e-payment options came to the fore as demand for ATM, PoS and online banking services was on the increase during the long holiday when banks closed for the holiday and consumers had to meet their cash needs for holiday shopping and payment for other services. However, many bank customers expressed disappointment and frustration that they could not effectively use any of the available e-banking channels throughout the holiday period, often leading to unmet cash demands and unfulfilled needs.
But there are also indications that it is not only during holidays that such hitches are recorded. Some customers in Lagos complain that even on weekends, most ATMs in the city are either out of service or empty and unable to dispense cash, with a key player in the ICT industry confirming that “most banks opt out of weekend supports for ATMs in order to save support money”. This scenario, we daresay, is most unfortunate as it is certainly during the weekends and holiday periods that ATM attendance is most required. Why banks will choose this period as the best time to withdraw their support for their ATMs is beyond our comprehension.
Beyond the foregoing, we are also concerned that, as it is, there are reasons to suggest that the objectives of the cashless policy are not being met. This is as many Nigerians still appear to have a strong preference for cash transactions. For instance, majority of bank customers who visit ATMs do so for cash withdrawals; only a few do online transfers or other transactions. Moreover, a BusinessDay survey of selected banks in Lagos on December 24 when banks worked half-day before closing for the holiday and December 29 when they reopened showed the demand for cash among Nigerians is still very high, the cashless policy notwithstanding.
One explanation for the foregoing may be that many bank customers in the country are yet to develop confidence in or embrace electronic payment systems mostly as a result of slow and inefficient dispute resolution when issues relating to faulty ATM or online transactions arise. Another reason may be lack of awareness on the part of customers.
We are not unaware of efforts being made by some banks to tackle all issues relating to electronic payment systems through innovative solutions that cater to network and other challenges. We are also aware that between year-end 2013 and June 2014, the number of ATMs in the country increased from 11,000 to 15,000, while the number of connected card readers has grown from 5,000 before 2012 to 180,000 currently, according to CBN data. These are certainly huge improvements.
However, we insist that much more could and should be done by the CBN and the commercial banks to get more Nigerians to embrace the cashless policy and reduce their penchant for cash-carrying. This must, however, be preceded by ensuring that all the platforms for e-transactions are working optimally with speedy dispute resolution mechanisms properly in place.
Considering the numerous benefits of a cashless economy, especially as a security measure to reduce incidents of armed robbery on travellers, as well the ease and convenience it brings, we believe that the cashless policy is the best option for Nigeria and that it has come to stay. What needs to be done, in our opinion, is constant review with a view to improving what is on ground. This is the only way we can achieve a truly cashless economy.