For years, Nigeria’s push towards a cash-less economy was greeted with mixed feelings, but eight years after the Central Bank of Nigeria (CBN) rolled out the scheme, many people have come to realise that the gains outweigh the pains. With the ongoing COVID-19 pandemic, digital payment remains one of the ways to stay safe, with banks encouraging their customers to go cash-less, writes COLLINS NWEZE.
Cash-less banking has faced several criticisms since it made its debut eight years ago. From complaints of poor service delivery, double debiting, excess cashiers to loss of funds to fraudsters, e-payment users have gory stories to tell.
But the ongoing spread of COVID-19 pandemic, which has caused one death in Nigeria and infected over 35 people, has provided opportunity for those that abandoned cash-less banking to return.
Hence, the industry has witnessed widespread use of the e-payment channels – Automated Teller Machines (ATMs), Point of Sale (PoS) terminals, web payment, online transfers and even mobile phones transactions. These channels are the easiest way to transact without physical contact, the fastest route to spread the Coronavirus.
Deposit Money Banks (DMBs) are now advising their customers to use alternative digital channels for their transactions.
Ecobank Nigeria, FirstBank, Unity Bank, Wema Bank and Access Bank, among others, have reiterated the gains of going cash-less.
For instance, customers of Ecobank have been urged to utilise its digital self-service solutions, which include Ecobank Mobile App, Ecobank Online, EcobankPay, Ecobank OmniPlus, OmniLite and the RapidTransfer App without having to visit branches. This is part of efforts to ensure social distancing, which will help curtail the spread of COVID-19.
According to the bank, customers can “bank from anywhere” by utilising digital solutions to easily access their bank accounts, make payments, transfer funds, process salaries, and carry out other ancillary transactions from the comfort of their homes and offices without visiting branches.
The bank advised that its branches remain open and available to customers who choose to visit to carry out their transactions. The bank emphasised that its branches are equipped with prescribed preventative measures.
Additionally, the bank noted that as part of its self-service options, customers can create virtual cards for eCommerce and other online transactions on the Ecobank Mobile when required. It noted that Ecobank also provides online and digital product assistance through its Chatbot, Rafiki on Ecobank Online or Mobile, and through 24/7 Contact Centres across the group.
The bank reiterated that “standard measures have been put in place at the branches across the group to help curtail the spread.
These include provision of temperature checks at all entry points to screen employees, customers and visitors; installation of hand sanitisers; equipping customer-facing staff with emergency response plan; encouraging social distancing especially from anyone who is coughing or sneezing; educating branch staff on international best practices recommended by the Federal Ministry of Health and the World Health Organisation (WHO) and actively updating customers and employees on the COVID-19.
Group Chief Executive Officer, Ecobank Transnational Incorporated (ETI), Ade Ayeyemi, reads: “This is an unusual, extraordinary and difficult period in time.At Ecobank, we do understand that COVID-19 is impacting a number of people and causing others serious concern and anxiety.
We will continue to stay abreast of the situation in order to adapt to changing developments for the good health and well-being of all our customers, employees and communities. Together let’s keep well and safe, following the instructions given to us by the world health experts for our better health.’’
Cash-less banking journey
And so, for the past eight years since the exercise kicked off in 2012, first in Lagos and later across the country, cashless banking is gradually becoming a lifestyle with those that failed to embrace the scheme learning the hard way.
Take for instance Michael Oliseh, a 42-year-old entrepreneur, who spends a part of his business time in banking halls making payments to his suppliers of goods.
During one of such visits to a bank in Central Lagos, a cashier who has been monitoring him for years, including his frequent visits to the banking hall, decided to tell him about electronic payments.
“You don’t need to be physically here to pay your suppliers. You can do it at home, or even in your shops or through mobile phone,” the cashier told Oliseh.
That was the turning point for the businessman. For the past three years after that encounter, Oliseh has never visited the banking hall. His android phone is now his bank.
He is one of the millions of Nigerians that have been captured by the cash-less banking fever.
Even market women are not left behind. It is a common experience to see a roadside mechanics, road side traders, food vendors (mama put), tailors, bricklayers and even beggars telling people “You can transfer to me”.
Many people who previously dodged payment for services in the pretext that “I don’t have cash on me” will have to look for another lie to tell their service providers. The question is: If you don’t have cash with you, what about your phone?
The CBN said the awareness of these channels is needed to lift businesses and economy.
Hence, there is also an incentive for those who embrace the initiative. The Nigeria Interbank Settlement System (NIBSS) is encouraging the use of cards to pay for goods and services via PoS terminal.
The agency, collaborating with CBN, Committee of E-Banking Industry Heads (CEBIH) and banks is ensuring that bank customers that use their e-payment cards to pay for goods and services on PoS terminals and web platforms are rewarded with cash back of 50 kobo for every N100 spent. The scheme allows cash back rewards to card holders for using their cards to make payments on alternate channels.
Understanding bank customers
KPMG Nigeria survey explained that to succeed in the banking environment, bank executives need to understand their customers: their preferences, their channel usage, their needs and their satisfaction.
“Banks need to ask them what was important to them in a banking relationship, the channels they use and what channels they would like to use and how their current banks compared to their expectations,” it said.
Partner, KPMG in Nigeria and Head of Financial Services Africa, Adebisi Lamikanra, said much has changed across Nigeria’s banking industry in the past three years.
She said customers were still concerned about financial stability; but what they primarily want from their banks is enhanced high-quality service, more innovation and greater convenience.
Nigerians love the internet. The country is estimated to have more than 148 million mobile telephone subscribers and at least 92 million of them access internet data services on their devices. And, with around one-third of Nigeria’s population now under 24 and a growing middle class population, all signs suggest that internet penetration and usage is set to grow significantly.
In particular, social media channels are gaining significant adoption in Nigeria. Platforms such as Facebook,Instagram,Twitter, LinkedIn and Tumblr are widely used by Nigerians as a way to communicate with friends and the wider public. In fact, according to our survey, 77 per cent of Nigeria’s banking customers use social media for personal purposes.
The problem is that Nigeria’s banks have largely failed to translate this passion for the internet and social media into increased adoption of internet and mobile banking solutions.
Forty-two per cent of banking customers said they use online banking platforms for one or more banking activities. And just 40 percent said they have interacted with their bank using social media in the past.
The benefits of shifting transactions to web-based platforms are enormous. For customers, web-based platforms offer convenience, 24 / 7 access, and freedom of location. For Nigeria’s banks, the shift promises the opportunity to improve service delivery and achieve a lower cost-to-serve.
The statistics still low
According to NIBSS data, Nigeria has 37.4 million Bank Verification Number (BVN) enrolled customers but total active BVN across all banks is 29.4 million. Also, of the 120.9 million bank accounts in the country, only 74 million are active as at January, last year.
The NIBSS data showed that banks did N1.5 trillion worth of transactions on 56,102 ATMs between January and March. The transactions were done in 203 million deals.
Also, N107.6 billion were transacted through web payment and N810.1billion through mobile money.
This explains that although Nigeria is racing on the e-payment track, the statistics is still low when compared with what obtains across the world.
For instance, the cashless society is fully in action in Sweden. Only one per cent of the Swedish economy operates on bills and coins. The New York Times says only about one in 10 Swedes paid for anything in cash last year.
CBN’s position
The CBN has admitted that a lot more must be done in the implementation of the cash-less policy. It urged stakeholders to reduce the use of cash across all segments of the economy.
According to the regulator, the cash-less policy provides safe and efficient mechanisms for making and receiving payments with minimum risks to the CBN, payment service providers and end-users.
“To participate actively in the global economy, our payment system must be successfully bench-marked against the global best practices, as in most developed nations of the world. We have made some significant achievements so far in this journey, but a lot still remains to be done,” it said.
The CBN said it will continue to sanction banks, mobile money operators, payment solution providers and other financial institutions for e-payment infractions, one of the reasons some people have refused to embrace cash-less banking.
To reverse the trend and boost confidence in the e-payment system, the CBN, banks and other financial institutions need to take the message of cash-less banking that is safe, secure and seamless to the grassroots.
