The Useful coexistence of Physical Cash and Digital Payments

The cashless policy is not a new concept in Nigeria. As a matter of fact, it was introduced in 2012 in Lagos State and eventually spread to other states across the country. The policy was introduced not to eliminate cash payments but to limit the amount of physical cash circulating in the economy. Well, this may have seemed like a rash decision, but it does have a couple of advantages.

One of the goals was to make Nigeria one of the top 10 countries with a booming economy, which could be achieved by modernising our payment system and making it efficient for all. This is a realistic position for any country with great leaders and a good implementation strategy because a good economy thrives on efficiency.

A cashless policy also reduces the risk of robbery, and we can see it in our everyday lives. We are more susceptible to robbery when we have a large amount of cash in our possession, and it is far easier for thieves to steal some notes than to transfer someone’s assets when they do not have the PIN or security codes required to initiate bank transactions.

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Physical cash has also been a leading factor in supporting money laundering, even till date. Huge sums of money could easily be found at the residence of a top politician, and the reason is never far-fetched. They use those large sums to buy votes during elections and fund many electoral practices. Even kidnappers request large amounts of physical cash as ransom because it serves as a cover for their identity, unlike digital payments.

Unfortunately, while these are great benefits of a cashless policy, it has not translated into greater economic growth as planned. There have been many reports of financial scams through digital means, and many politicians still go unchecked when they transfer suspicious sums of money to strange beneficiaries. This, I believe, is a result of poor governance rooted in selfishness and a disregard for the welfare of the masses.

Now, if we were to go totally digital with payments, we would have to consider the challenges that come with it, particularly inclusion. Ideally, every financial system should have an efficient alternative that enables every single member of society to transact with ease. But when we disregard that, we are not being inclusive. There are a lot of people who still struggle to navigate smart devices, many are still uneducated, while others have not been convinced enough to ditch traditional mode of payment. So, going fully digital without establishing a way to help them adapt to the system is an unwise thing to do.

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A quick reference to the last elections, where cash was intentionally made unavailable in banks, showed that a lot of people were affected, from students to workers and business owners. Even I was affected. There were times I needed to use a POS machine for reasons beyond my control, but the charges were ridiculously inflated. This experience remains proof that, for a digital payment system to work effectively across the country, the government has to implement a plan that makes the experience seamless for everyone.

I do support physical cash being in circulation, regardless, as this will help preserve our national currency and enable people to purchase petty items without having to use a smart device all the time. After all, many leading countries still use their physical currencies, so there is no downside to doing the same. This brings me back to my stance: the solution is not to scrap physical cash as a means of paying for goods and services but to ensure that digital transactions become widely accepted and used by the majority of the Nigerian populace.

This way, efficiency and convenience are achieved, and I believe our harmless desire for ease and inclusion is more than enough reason to create a balance between cash and digital payments.

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