ASSESSMENT OF CASHLESS BANKING IN NIGERIA CHALLENGES, BENEFIT AND POLICY IMPLEMENTATION
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ASSESSMENT OF CASHLESS BANKING IN NIGERIA CHALLENGES, BENEFIT AND POLICY IMPLEMENTATION
CHAPITER 1
INTRODUCTION
BACKGROUND OF THE STUDY
For policymakers and financial institutions, the recent development in financial transaction technology raises intriguing questions about the suitability of the existing institutional frameworks and the availability of tools to ensure financial stability, performance, and the efficacy of monetary policy.
Throughout history, there have been numerous different types of payment systems. Trade by barter was initially widely used.Due of issues with barter, like the double coincidence of wants, several forms of money had to be introduced.
Nevertheless, experts have anticipated the complete disappearance of study aids and the emergence of a “cashless society,” which is a potentially preferable replacement for currency or monetary exchanges.
Since Nigeria gained independence in 1960, there have been numerous governments, constitutional reforms, economic policy changes, and banking reforms, all of which were primarily intended to improve social welfare and accomplish developmental objectives.
However, there hasn’t been a significant improvement in Nigeria’s human development indicators. The efficiency of the Central Bank of Nigeria’s (CBN) cashless policy is also called into question by this.Since the end of the 1980s, less cash has been used to purchase goods for consumption in the US (Humphrey, 2004).
As a result, most LDCs, including Nigeria, are shifting to cashless economies in order to spur economic growth. It comes as no surprise that the Central Bank of Nigeria has introduced a “cashless” system.to increase financial inclusion by providing more flexible transaction options and a wider range of services,
lower the cost of banking services (including lending), and improve the efficiency of monetary policy in generating economic development and regulating inflation.
The widespread use of physical cash in the economy is known to have various drawbacks, including high cash costs, high risk of using cash, high subsidies, the informal economy, inefficiency, and corruption (CBN, Website, 2011). These drawbacks are intended to be mitigated by the cash policy.
The goal of cashless banking is to encourage more electronic-based transactions (such as payments for products, services, transfers, etc.) while reducing the quantity of physical cash (such as coins and study notes) in circulation.
Or to put it another way, it’s a combination of two cash-based and e-banking systems. In the majority of developed nations, it signifies a transitional stage in the development of payment systems.
STATEMENT OF THE PROBLEM
The repeated delays in cheque payments led to the adoption of an electronic banking system. The adoption of electronic banking, which was meant to simplify financial operations, has caused issues for customers.
Most clients lament the length of time they must wait at banks, especially when there is a network outage brought on by a linkage problem between the central server and the branches.
In addition, banks have been providing payment cards in the form of ATM cards since 2000, although usage has been extremely low due to a lack of interconnection.
The government made the decision to encourage the use of e-Commerce in order to address some of these problems, particularly to decrease the number of cash transactions.
Instruments to conduct business rather than cash, lowering the amount of traffic in banking areas and other difficulties daily clients confront.
PURPOSE OF THE STUDY
The main goals of this investigation are as follows:
To determine the difficulties with cashless banking in Nigeria.
To assess the advantages of Nigeria’s cashless banking.
To evaluate the policy implications of Nigeria’s cashless banking.
RESEARCH QUESTIONS
What difficulties do Nigerian cashless banks face?
What advantages does Nigeria’s cashless banking system offer?
What are Nigeria’s cashless banking policy implications?
SIGNIFICANCE OF THE STUDY
This study will be important for the general public because it will act as a programme for educating the public about the cashless system so that everyone is familiar with it. It will also be important for academics and researchers who wish to conduct additional research on this study.
SCOPE OF THE STUDY
The goal of this study is to evaluate the difficulties, advantages, and policy implications of cashless banking in Nigeria.
LIMITATIONS TO THE STUDY
During the course of this study, the researcher faced significant problems related to finances, time constraints, and a lack of research.
DEFINITION OF TERMS
CASHLESS BANKING: Cashless banking is a financial strategy that encourages more electronic-based transactions (such as payments for products, services, transfers, etc.)
while attempting to lessen rather than completely remove the quantity of physical currency (study notes and coins) circulating in the economy.
A policy is an intentional set of rules intended to direct choices and produce sensible results.
REFERENCES
B. B. Fadiya, S. O. Ernest (Ph. Nigerian cashless banking: issues, advantages, and implications for policy.European Journal of Science 1857-7431
Siyanbola,T.T(2013), The impact of cashless banking on the economy of Nigeria.Journal of accounting and finance in Canada online.
Adu,C.A (2016), The impact of Nigeria’s cashless policy on the country’s economy. European Journal of Business, Economics, and Accounting, 2056–18
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