While the cashless payment system takes effect from January 1, 2012, experts lament the low awareness among market women and other artisans expected to conduct transactions through Point of Sale terminals and Automated Teller Machines, writes DAYO OKETOLA One of the greatest objectives of the cashless economy policy of the Federal Government, which is being spearheaded by the Central Bank of Nigeria, is to transform the countrys economy from its cash-based status to an electronic payment dominated one.The essence is to drive the payment system with technology, reduce cash dominance in the country and save the CBN huge cost of printing, distributing and destroying naira notes, which was put at N34bn in 2010.The Deputy Governor, CBN, Mr. Tunde Lemo, who had earlier disclosed the figure to Saturday PUNCH, asserts that embracing the cashless system will help reduce the increasing dominance of cash in the economy.He says, There is no way we can run an efficient economy if we dont develop e-payment transactions. We spend billions of naira every year on cash printing. In fact, we spent over N34bn printing cash last year. We cant continue to incur such costs.Banks also spend too much time processing cash. This makes them to focus more on minor functions at the expense of major ones. Banking is not about processing cash. Let them do proper intermediation by ensuring that the bulk of their transactions are more efficient and cost-effective.As such, evolving a cashless economy has been central to CBNs activities in the better part of 2011 with a plan to begin the pilot project in Lagos on January 1, 2012.The CBN, which has resolved to facilitate, through proper regulation, the reduction of cash dominance in the Nigerian economy, started with its cash withdrawal limit policy.This is to ensure that starting from January 1, 2012 in Lagos, the maximum cash withdrawal by any individual is limited to N150,000 while that of corporate bodies is limited to N1m across all banks in the nation.Though there have been a lot of activities by the banks ahead of the commencement of the pilot project in Lagos, experts say low awareness and cyber security concerns in the face of increasing global card fraud are serious loopholes that must be closed to ensure full success of the initiative.At an information Security workshop organised by the Information Security Society of Africa, Nigeria, recently in Lagos, the Director, Security Assurance and Information Risk Management, Digital Encode Limited, Mr. Oluseyi Akindele, bemoans the lack of awareness ahead of the implementation of the cashless system.He says, The current move by the CBN in moving the nation towards a cashless economy raises a great concern as most organisations seem not prepared for change. The level of ignorance among the populace on e-business transactions brings more risk and exploitation of vulnerability on the e-payment platforms. These things must be seen tackled before the gains of a cashless society will trickle down.In what seems as a confirmation of Akindeles observation, the Director, SMG Ventures, an interior decoration firm, Ms Shalewa Johnson, says that though she has a faint idea of the cashless initiative, she would like to know more. She appears unprepared for any form of e-business in the New Year.This, according to experts, means that not much has been done by all stakeholders in providing adequate information and public enlightenment for the project.An expert with eMaginations, a financial industry focused public relation firm, Mr. Razarck Olaegbe, in a rather strong tone, says, The CBN has not carried out adequate enlightenment campaign to inform, educate and persuade the various stakeholders involved in the cashless Lagos policy; that is, those who would be directly involved in the day to day transactions such as market women, artisans, bus conductors, drivers, tanker drivers, students, tipper drivers, housewives and host of others who are residents in Lagos and who are expected to conduct their transactions through the Point of Sale and Automated Teller Machines.Olaegbe argues that people in the informal sector will benefit from the system but that will be when the CBN and other industry stakeholders have done and continue to do what they should do in terms of an unending, consistent public enlightenment drive.He says, Because the CBN and other industry stakeholders have not executed enough public enlightenment campaigns, it is most likely the cashless policy may suffer initial inertia from the target group.Following this, there would likely be bottlenecks, as a shop owner may turn down the request of a buyer to make payment on the PoS. Again, new e-payment converts may experience difficulty in using the various PoS, ATMs, web portals and mobile channels, which may result in heavy downtime. This downtime would in turn frustrate the system, and once this happens, the CBN would be forced to do what it should have done in the first instance: constant and never ending information dissemination.The President, Association of Telecommunications Companies of Nigeria, Mr. Titi Omo-Ettu, who has a contrary view, says that the CBN as a regulator has the responsibility to set standards and rules of doing business, but adds that businesses are expected to provide the necessary enlightenment for the public.According to him, the cashless initiative revolves around a simple business application of technology, adding that the CBN may have deified it and make it wear a larger than life posture.He says, After technology comes application and then the business-applications. Once it gets to the business realm, it is businessmen who should provide education and enlightenment to consumers. I think the regulator sets the standards and produces the rules for doing business. It is when the regulator starts setting deadlines that it sometimes deifies these issues unnecessarily.On the lack of awareness for a cashless system taking off in January, the Principal Associate, MobileMoney Africa, Mr. Emmanuel Okoegwale, says, I am amazed that during my daily interactions and meetings, I meet people that should be in the know but are not in the know of the cash-lite Lagos project. The regulator has done its own part by providing top line and industry focused enlightenment campaigns, but that may be inadequate for the woman in the rural village or semi-urban dweller.My expectations are that the banks should also be active in the campaign. I am yet to see any bank display the policy implementation at the bank branch anywhere. It should start from there and customers can start asking questions and sharing the information with business partners, friends and families.He adds, The policy is targeted primarily at those with bank accounts and later to attract e-payment from everybody and if the primary targets are not even aware or educated via the bank branches or any other form of communication, then implementation may be a challenge. Till date, I have not received any formal communication from my bank to the effect.Okoegwale says that the cashlite Lagos initiative should be seen from a mass market view and not a closed user target group.According to him, if the masses are not aware or duly educated on the policy implementation by early January, businesses may be affected adversely.He argues that this may cause systemic risk for the economy, adding the CBN strategy to limit the system to Lagos, perhaps, may be part of measures put in place to be able to contain the adverse risk that may evolve from the implementation in January. Okoegwale explains that the major challenge in the implementation of the cashless initiative will be to deploy robust infrastructure.He notes that the CBN and other stakeholders should make significant efforts to reach the masses and make the cashless initiative a frontburner issue.He says, Apart from the informal channels in urban and rural areas, there is need for a massive enlightenment campaign throughout Lagos State and even beyond because Lagos is Nigerias commercial centre. All concerned groups should be well educated before the inauguration of the policy.Generally, the role of efficient and adequate information, as well as public enlightenment cannot be overemphasised in the overall success of the cashless scheme. This, they want the CBN, banks, e-payments companies, to take seriously and address the shortcomings before the full take off of the project.
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