Cashless Economy

Simply put, a cashless economy means an economy that is driven with the usage of electronic means of exchanging money instead of paper money or coins. The Central Bank of Nigeria has earmarked a full transformation of Nigeria to a cashless society by June of this year, 2012. To prepare for an effective creation of an economy devoid of cash, a trial run commenced in the economic capital of the country, Lagos, in January 2012. When fully implemented, the maximum cash withdrawal and lodgement by individual and corporate organisation will be pegged at N150,000 and N1,000,000 respectively. There would be a penalty on all transactions in excess of the maximum ceiling. Other means of transaction expected to take over from cash transactions are cheques, wire transfers, debit and credit cards, online transactions and mobile banking.

A cashless society will help in a large way to reduce or prevent cash-related crimes like drug trade, burglaries, kidnappings and terrorism. Cash is difficult to trace but in a cashless economy, every transaction can be traced. Also money counterfeiting will be eliminated since the circulation of paper money will be well reduced. This policy will also favour banks because, substantially, their costs will be reduced. Cash counting, storing and transportation will be reduced or eliminated, thereby cutting down overheads and making banking to be safer.
As it is now, there are works to be done before the policy becomes well grounded in Nigeria. There is at present a great mistrust by Nigerians based on the high rate on electronic crimes by some unscrupulous Nigerians. This makes most people to be discouraged from accepting cheques. A great percentage of the people even prefers keeping their money at home rather than patronise banks. A lot of sensitisation will have to be done to assure this set of people.

The banks are not really helping to make the people appreciate this policy, despite all their rhetoric. The duration of interbank money transfer is too long for an economy that is still crawling like ours. A cheque from a customer in bank A deposited into another account in bank B, most times take more than 24 hours for it to be cleared, which is just not good enough. Also the ATMs are mostly underutilised because of the banks’ inefficiency. ATM usage is imperative in order to make a cashless economy possible. Its usage must not only be encouraged but also made to be very effective. So many times one gets to the ATM machine and realise that there is either no sufficient fund in the machine or no internet service for it to operate. To encourage people to appreciate these machines, more machines will have to be deployed and the number of ATM downtime must be greatly reduced also.
A cashless economy, if properly planned and executed, will create a society that is convenient for all the people. Its evolution is absolutely unstoppable. It is convenient in the sense that you can move any amount of money from one bank to the other from the comfort of your home. With your phone you can pay for any product in the world without stepping into a banking hall. We hope this modern society will not elude the nation as a result of improper planning and administrative inefficiency.
For more information on this topic, you may visit http://olojooluwasegun.hubpages.com/hub/Why-the-proposed-cashless-economy-in-Nigeria-is-unrealistic