How do we transition to a cashless society in Nigeria?

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In the second week of April insight2impact, Lagos Business School and Data Science Nigeria hosted an event at the Lagos Oriental Hotel. The topic for the evening was “The future of digital payments in Nigeria”.

Earlier that day, the insight2impact staff (who are from South Africa) needed to pay a local service provider for the event. The first hitch was, while the service provider owns a bank account, they did not have a POS device to accept on-the-spot digital payments. The visiting team attempted to transfer money directly into the provider’s account but were unable to transfer from a South African credit card to a Nigerian bank account. The team then attempted to withdraw cash from an ATM. They were again unsuccessful, as the amount was too high – they were unaware of the withdrawal limits at ATMs in Nigeria. They even attempted to swipe for cash at the bureau de change, but there was no POS at the time, nor enough cash. Eventually, multiple staff members withdrew many small amounts – enough to pay a deposit (about half the total fee) and guaranteed the remainder via international transfer.

The POS challenges or the ATM withdrawal limits will not come as a surprise to many Nigerians, but it did remind us that while we are excited about the potential of digital payments in Nigeria, the reality is much more sobering. With this incident in mind, the burning question posed at the event was “How do we transition from where we are to a cashless future?” Or, more realistically, how do we become a cash-lite society/economy?

The nationwide push for adoption of digital payments is admirable, but we must first consider our infrastructure – a challenge across many areas of our lives. If the underlying payments … Read More...