As part of the actualisation of its cashless policy initiative, the Central Bank of Nigeria (CBN) has introduced what it calls "Mobile Money". Through it, the apex bank intends to put into economic use the estimated 120 million mobile phones already in people's pockets. The idea, it says, is to use these phones to deliver financial services.
Each customer, the thinking goes, has a digital account attributed to his/her phone number. The cumulative assets of all these digital accounts are kept in a single pooled account in a bank. The total amount in these digital accounts is equal to the amount kept in the pooled account. There is no possibility of money creation and all accounting is transparent.
The CBN explains further that Mobile Money services can either be managed as a closed loop (mobile wallet) or as an open loop where cell phones are connected to classic banking accounts. Mobile Money services can connect through various mechanisms to create interoperability between multiple schemes. It claims that mobile money, as a service, does not require the use of cards like other electronic payment channels and one will not need to have a card for Point of Sales (PoS). The CBN is optimistic that mobile money will soon become virtual PoS and, through it, one can spend, send and receive money.
This financial product, as appealing as it may seem and from what users have already observed, comes with its own complexities. Many insist that it is not user-friendly. And some of these early users are part of the educated and sophisticated segment of the public that the CBN is targeting. Their argument is that the technology does not offer itself for easy study, making it seem as if the banking public in Nigeria is not ready for it. CBN deputy governor MrTundeLemo, during one of his public sensitisation campaigns in Abuja, acknowledged the fact that the perceived challenges actually did exist and observed that the CBN was pulling all stops to make its acceptability and success seamless.
Beyond the technological challenges this financial service may encounter, there is even a more daunting hurdle - the attitude of the average Nigerian who prefers, any time, to have his or her money in cash. It should also be pointed out that Nigeria is a cash-based economy and will remain so for a very long time. Previous electronic innovations in the financial sector have only brought about temporary relief tinged with inconveniences such as fraud.
However, we are enamoured by the apex bank's position that the cashless policy initiative is the way to go if the nation is to key into international trends, and enhance efforts aimed at attracting direct foreign investments and their attendant benefits.