PERCEPTION OF CENTRAL BANK OF NIGERIA CASHLESS POLICY BY BANK CUSTOMERS
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BACKGROUND OF THE STUDY
The United States of America was the country that started the trend of electronic payment many years ago. Since then, it has spread to other industrialized countries such as the United Kingdom, France, Sweden, and Canada, amongst others. It is now essential for many African countries, including Nigeria, to participate in this system of electronic payments while simultaneously decreasing their reliance on cash transactions. The term "cash" refers to anything that is commonly recognized as a method of payment for the purchase of goods and services. Gold, cowry, shells, coins, pepper money, and most recently electronic payment cards have been some of the items that have been used to repay debts in the past. These varied objects have all been utilized as a kind of money. Cash was the most common method of payment throughout the 20th century, but it has since been surpassed by electronic payment methods such as ATMs, point-of-sale terminals, the internet, and mobile phones, amongst others, in both developing and emerging nations, such as the United States of America, the United Kingdom, Canada, and Sweden, amongst others.
E-payment has been implemented in a significant number of developed and developing nations around the globe, and these nations have not been immune to the difficulties that have arisen as a direct result of this trend. When I was in Nigeria, the Central Bank of Nigeria implemented a cashless banking policy in April of 2011, and six months later it was officially launched in Lagos, which served as the pilot center. It is important to be aware that the Bankers Committee of Nigeria commissioned a research to identify cost drivers in order to provide a solution that can be maintained over time. The research came to a number of conclusions, one of which was that there is a high cash intensity in the economy, and that this intensity has an influence on a high cost structure in the financial value chain. It was found that the entire cash management expenses in 2012 were expected to surpass N192 billion, and this estimate did not include the costs of production, distribution, processing, or destruction incurred by the Central Bank of Nigeria. It was discovered that ten percent of customers conduct cash transactions in banks worth more than one hundred fifty thousand naira on a daily basis. This means that the remaining ninety-five percent of the general public subsidize the cash transaction costs of the remaining ten percent of bank customers. This resulted in the establishment of the cash-based policy, which mandates the imposition of a cash service fee on every daily cash withdrawal or deposit that is more than N500,000 for individuals and N3,000,000 for corporate organisations. This is done with the intention of decreasing the quantity of cash that is circulating in the economy, but it will not eliminate the circulation of physical currency. Additionally, the high cost of cash to the financial system will be decreased as a result of this change. (Umeano, 2012)
In a similar vein, Alabadan (2015) demonstrated that the significance of clients in the monetary and financial dealings of any nation cannot be stressed enough. They serve as the foundation and the pivot point of a nation's banking and financial system. The successful functioning of an intricate monetary and credit system that is carefully maintained in a state of delicate equilibrium is essential to the economy of any market-oriented country. Customers are an integral part of this system and cannot be overlooked. Customers not only provide the majority of the available funds but also serve as the fundamental mechanism for the smooth operation of the credit system. Therefore, it is said that the economic well-being of every country is dependent on the progression and development of its banking business, with the client serving as the "monarch."
Apparently, Obodo is right (2012).
A cashless economy is a situation in which there is very little or no use of cash in a given society. As a result, every other purchase and transaction will be made through electronic channels such as electronic fund transfer, direct debit, mobile payments, ATMs, Internet Banking, POS, etc. A cashless economy is a situation in which there is very little or no use of cash in a given society. In most cases, physical currency is essential to fund businesses and, in fact, to complete any financial transaction; yet, the significance of electronic payment systems that do not involve the use of cash cannot be underlined enough. It is a crucial component that increases trust, decreases the number of robberies and other crimes linked to cash, and cuts down on the high cost of cash handling and processing. The authorities in charge of regulating financial institutions have devised a workaround that will allow them to make progress in their efforts to implement a cashless policy that will successfully survive the hurdles it faces and prevent the policy from failing. Optimists of the new system have dismissed what looked to be the most significant obstacles in terms of infrastructure, and the acceptance of the system by Nigerians is proceeding in a manner that is sluggish but steady.
1.2 STATEMENT OF THE PROBLEM
The cashless policy that was first implemented by the Central Bank of Nigeria in 2011 has received feedback in the form of comments, criticism, and praise from a variety of sources. It may seem to some individuals that there is no benefit to using a cash system (also known as an electronic payment system) over a cash-dominated system economy. The problem at hand is the approach that will be taken and the timetable that will be followed in order to persuade Nigeria to adopt electronic payment, which the Central Bank of Nigeria refers to as a cash-less policy. The issue of armed rubbery, a lack of grasp of cash policy among banked and unbanked individuals, infrastructural lag, mistrust in the banking system, and other issues on the part of banks are yet another significant challenge for the Central Bank of the Nigeria (CBN) and other bankers. While on the part of customers, the fear of technology based on literacy level for the use of electronic payment products, the fear of exorbitant bank charges on electronic payment products, the security on ATM fraud level, and the level of awareness to the general public, particularly non-wage earners and people in rural areas who have no access to banking and even the electronic payment products, are all factors that contribute to the problem (e-payment). The availability and accessibility of e-payment enablers is of the utmost importance. These enablers include, but are not limited to, infrastructure, payment terminal service providers (PTSP), point-of-sale (POS) terminals, automated teller machine (ATM) bank coordinators, fraud management, customer protection, and dispute resolution.
According to Osazevbaru and Yomere (2015), all of these elements have combined to produce a tough and dangerous cash-less policy for the clients. This was discovered by Osazevbaru and Yomere (2015). The new cashless policy has had a number of unintended consequences, the most notable of which being the increased frequency with which ATM cards are being distributed. The speed with which Nigerians adopt an electronic payment system is dependent on the successful implementation of the cash-less policy. The responsibility for this does not solely fall on the Central Bank of Nigeria (CBN) and Deposit Money Banks (DMBs), however; it also lies with other social institutions and forces such as the media, traditional rulers, churches, and other similar organizations to raise awareness. On the other hand, the infrastructure constant to support these benefits posed a number of potential challenges, including concerns over safety, the availability of a constant supply of power for the processing of electronic payments, and the ease with which electronic payment materials could be accessed at all times, among other facilities.
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