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Cashless Society: The Hurdles and Suggestions

By on September 9, 2011

Societies are known to reinvent themselves in ways that remain amazing to the human selves. Sometimes our resistance to change becomes our albatross. But change could be a huge lift into that dream world-A better and smarter way of doing things. An electronic-enabled cashless society is just one of them. The debate about Nigeria’s cashless society rages. But then so does the hurdles and resistance to change.

Let’s note here that paper currency in circulation is on a steady move through the decades. According to the U.S. Treasury, totaling just $81 million in 1975, which was about $380 for every person in the United States. Last year, the total added up to about $2,578 in circulation for every American. Also the calculations are adjusted for population growth. There is an additional $35 billion of U.S. coins floating around, not counting those owned by collectors. This is a country which is the hotbed of innovations and inventions.

Also, the past few years, all shouts from the experts about moving to eliminate cash with businesses propping up to key into this opportunity have led to the demise of many. Some startup in that regards are Bitbux, Digicash, CyberCash, Flooz, Netchex and PayPal, to name but a few—it has been about limited success, or deaths of some startups while others have had to merged into companies.

Globally challenging question is why is cash still around especially when the world ought to be moving into the digital age? It is said to be anonymous, untraceable and perfectly negotiable and another is that it is just mere tradition even when it is less efficient. The traditional compelling tale about cash is that we can count it with our hands. We can roll around in it. It’s the currency of choice for grandparents, beggars, laborers and off-the-books household staff an also mobsters and drug lords.

We understand the benefit of a cashless society; bigger customer coverage, reduced cost of operations, boost in customer satisfaction, customized service delivery, friendly documentation and transaction tracking; while government enjoys adequate budgeting and taxation, improves regulatory services, transformed administrative processes, and slashes the cost of currency administration and management.

But the movement to electronic commerce has been slow and gradual. People like the speed and convenience of electronic commerce, but they are also comfortable traditionally with the culture they were born with. Centuries of living, have seen men lived by cash–bills and coins that are felt and give people felt sense of possession. A lot of people are still uncomfortable with the idea of a computerized card-based transaction linking them with their invisible wealth. Cash is still king.

 

Conversely, we are faced with stumbling block of security also. The big hurdle on everyone’s mind is how to ensure that the payments are secure and as secure as possible. The quality of the supporting information technology (IT) infrastructure for the e-payment system is in a shoddy state.

On the whole, governments should embrace it as a means of cracking down on crime and cutting government spending on her bloated bureaucracy. Businesses should embrace it as a means of instant payment and automated inventory and accounting, cutting their expenses and thereby increasing their profits. The masses should embrace it for its speed, convenience, security, and ease. We advise the regulatory bodies to mount a huge awareness campaign and demand infrastructural upgrade and improve maintenance. We advise a gradual introduction too.

  • Zee

    For me, electronic transactions are never meant to be perfect substitute for cash transactions. In some ways, they both still play a more or less complementary role. Also, the level of cash in the economy is positively correlated with inflation rate in the same economy. I think the CBN cash limit policy should have considered our level of (real) inflation…I think N150,000 is really low relative to average level of individual’s daily operational expense