Towards the end of 2022, the Central Bank of Nigeria announced the introduction of redesigned N200, N500, and N1,000 banknotes.
This announcement implicitly introduced the cashless policy, as the new notes were made scarce to help eliminate money laundering and encourage digital payments.
Although the cashless policy has its advantages, its implementation in Nigeria has led to numerous adverse effects that have significantly affected individuals and businesses, especially small and mid-sized businesses.
It is safe to say that the disadvantages of this policy are greater.
For individuals, the cashless policy has not been fair toward those who are unbanked or have limited access to digital banking services.
Many older adults in Nigeria rely heavily on cash transactions and it has been a big challenge for them to adapt to the new trend.
While struggling to get cash, some of these individuals lost their lives, leading to a rise in the mortality rate in the country.
The business challenges are quite different from that of individuals.
One would think the cashless policy makes it easy for businesses to receive payment, but what about the high cost of transactions?
Digital payment platforms and Point of Sales (PoS) operators charge high transaction fees for every payment, which affects the profit of small businesses.
Likewise, the unavailability of appropriate resources makes it challenging for businesses to adapt.
For instance, with the reduction in the circulation of physical cash, some small businesses do not have access to fuel, good internet, and electricity.
As a result, they’re unable to compete in the market against those with these resources.
Despite these misfortunes, it would be unfair to ignore the benefits of the CBN’s cashless policy.
Moreso, the FinTech industry has experienced huge growth because of this policy, with banks like Opay improving the payments system and the economy at large.
Even though the policy was introduced to boost the economy, its disadvantages outweigh its advantages.
While some argue that it’s a commendable policy, others argue that it’s a scheme to worsen poverty among the poor. Because its implementation has led to damages and deaths among poor Nigerians.
Therefore, it is only fair that policymakers examine these challenges and address them in ways that will improve the economy and its people.