The Challenges & Solutions of Going Cashless in Nigeria

Going cashless can be a good thing but just like every phase of technological advancement or growth there will be challenges and amidst these challenges, so will solutions.

In Nigeria, ever since we gained our independence in 1960, we have been a cash-heavy nation with all transactions going through manual physical interactions between individuals.

In 2012, the cashless policy was introduced by the Central Bank of Nigeria (CBN) which aims at reducing the volume of cash in circulation by transforming our cash-heavy country to a digital electronic cashless country where payments and transactions are not necessarily done with cash but using electronic means of payments such as debit or credit cards (MasterCard, VISA, Verve), internet banking platforms, online payment platforms or gateways.

Cashless in Nigeria

What is Cashless? 

Looking at this literally, it means having less or no cash. 

What is a Cashless Society?

A cashless society is one that has already started implementing the use of electronic/digital modes of fulfilling financial transactions without the handling of cash or coins between individuals.

What does Going Cashless mean?

Going cashless means we have started the cashless process, some are adapting while some are not, we can see the benefits and we are ready to move forward into a fully digitalized means of payment but that can’t happen unless problems are identified, solutions are created to solve those problems and the solutions are carried out to the fullest.

Cashless Policy Channels

These are the various channels available to those interested in becoming cashless or cash light. They enable financial transactions without the need for cash handling and these channels include;

1. Debit Cards: 

going cashless in Nigeria

These are issued by banks and are linked to your personal account whether it’s a current or savings account, you can request a new debit card anytime for a fee. We have different debit cards in Nigeria but the 3 popular ones are the MasterCard, VISA and Verve cards.

The lowest being the verve card can be used to fulfil financial transactions locally as well as internationally in sites that accept it. Debit cards are usually plastic containing vital details about your bank account so make sure you keep it safe and secure.

They enable you to pay for items such as clothes, electronic devices, food, drinks, shoes and everything else available online. You pay for those items using the details written on your card such as your credit card number, expiry date, card name and CVV.

Always keep your CVV secure and away from prying eyes because fraudulent individuals have acquired once your CVV the best solution is to block your card.

2. Point of Sale (POS):

pos going cashless in Nigeria

POS machines are the holy grail of cashless payments in Nigeria. It is so simple and straightforward. You walk into a store, pick up some items and then it’s time to pay, instead of worrying about change or if you have enough cash on you to pay for those items.

You can simply use your card on the store’s POS machine, tell the attendant if it’s a current or savings account, input your PIN securely and you are done, transaction successful. All this can be done in less than 10 seconds.

POS has been simplifying transactions in Nigeria since 2012.

3. Internet Banking:

When you register a bank account and are asked to opt in for internet banking, you should do so because internet banking saves you the time and stress which would normally be encountered when you go to the banking hall and find long overhauling queues with no end in sight and you can easily find those queues in Lagos especially on Fridays.

Internet banking is also called online banking which basically is telling you there’s no need for you to go the banking hall, once you have internet connection and have registered for internet banking with your bank, you can easily perform tasks like money transfer between customers of the same or different banks, pay for DSTV/GOtv bills, pay for electricity bills, view your account statements amongst other things.

4. Mobile Banking:

mobile banking going cashless in Nigeria

The number of mobile users cannot be ignored, it’s an ever-increasing population and banks, online business, and shops have taken advantage of this opportunity by creating mobile apps that enable you to fulfil financial transactions effortlessly.

You can do everything you did with internet banking except this time you are using a mobile phone and it’s either you are dialling your bank’s code or using their mobile app.

Access bank mobile app is great. Why? Because it’s so simple, easy to use. In the World of mobile banking you have the option of using either a token or a PIN to verify your transaction and I can safely say that most people opt in for using PINS instead of token because it’s free and you don’t have to carry it around, press it to generate long coded numbers then put in those numbers to confirm the transaction.

PINs are so much easier to use, you generate them yourself and use them each time you want to complete a transaction. Very similar to the ATM PIN concept.

5. PayPal:

This may not be common in Nigeria but in July 2014, First bank launched an official partnership with PayPal which enabled their customers easily create PayPal accounts and unlock international transactions in sites like eBay.

Although, Nigerians could sign up with PayPal before FirstBank’s partnership with them but only those technologically savvy enough knew about this so the partnership helped bring some awareness to PayPal and make people understand how they can buy from eBay and other websites that accept PayPal and decline Nigerian debit cards.

Nigerian PayPal accounts can send money but can’t receive money. What this means is that you can create a PayPal account for free in Nigeria, once you create it, you link your debit card to it and they verify your card.

Now you can buy things online using your PayPal but if your friend or family member wants to send you money, you can’t receive it with a Nigerian PayPal account.

6. Mobile Money:

This is your mobile wallet allowing you store money which can be used to make payment in your local areas and stores.

7. Near Field Communication (NFC):

This technology eliminates the use of POS but we haven’t started using it in Nigeria. Using NFC payment apps like AndroidPay, ApplePay you don’t need to say or put in any details. 
When you want to make payment, simply put it close to a payment terminal and your payment is done. 

8. Automated Teller Machine (ATMs):

Looking at ATMs generally one might think this isn’t a cashless policy channel but look beyond just cash withdrawals, look towards airtime purchase, paying for utility bills through the ATM, cash deposits and so on.

problems with going cashless in Nigeria

Challenges of Going Cashless in Nigeria

“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy” – Martin Luther King, Jr.
Going cashless in Nigeria comes with challenges which hinder the growth of cashless policy in Nigeria. These challenges include;

1. POS Problems at Pay Points

The idea of using POS machines at pay points can be ruined when the POS machine, for instance, doesn’t work, charge you twice, poor network or a faulty machine. All these are serious cashless problems because what would you do when you picked all your items in a store and it’s time to pay and they tell you, sorry our POS machine is not working.

This is disappointing because you solely relied on POS, you didn’t bring any cash with you. There are situations where you would be glad you went to a place with cash because you had averted a “our POS machine is not working” situation. Why? “There’s no network”.

Even in 2018, this is a recurring challenge which needs to be looked into seriously because, from POS machines, Nigeria’s next step is probably NFC payment gateways where you can just swipe your card and you are done. 

2. ATM malfunctions

Another very common problem in Nigeria, which did not begin today. A lot of things can malfunction with an ATM withdrawal but the common ones are lack of service, a stuck card, ATM doesn’t dispense cash but a debit alert was sent to you, a ‘temporarily unable to dispense cash’ feedback.

3. Telco challenges

These are the challenges brought by telecommunication companies in charge of internet connectivity and communications. In Nigeria, we have MTN, Airtel, GLO, 9Mobile, NTel, Swift, Smile, Spectranet, CobraNet, MainOne and so on.

Most issues on POS machines comes from telecommunication companies because most of the excuses or reasons store owners/ attendants give is there’s no network. If that’s the case then we should blame telecom companies for that.

4. Poor network connectivity

Nigeria isn’t known to be one of the countries with the fastest internet connection. According to Speedtest Global Index for January 2018, Nigerian ranked 103 in the World with 10.28 Mbps download speed.

5. Poor infrastructure

This challenge is linked to poor power supply or poor facilities. Cashless payments are dependent on Internet connectivity which also depends on electricity so in a country with poor power supply and poor infrastructure, cashless payment becomes challenging.

6. Security and trust issues

Some people are still sceptical or afraid of cashless payments such as online buying and selling, mobile banking, internet banking and so on. Some feel it’s all a scam, they have so much fear that they don’t even collect their ATM cards, they don’t enrol in internet banking or mobile banking they prefer to go to banking halls, pick up a withdrawal and slip, wait in line to collect their cash.

7. Lack of education

High level of illiteracy and lack of technical knowledge can be a challenge to cash payment because, without proper education on the channels used for cashless payment, the system could be put in place with no one using it.

8. Excessive Bank charges

Some banks charge you excessively without remorse, you can get charged for card maintenance fee, SMS fee, bank transfer fee, bank withdrawal fee, card renewal fee etc.

9. Problematic to poor people

Some people prefer saving money somewhere within proximity e.g. under their beds and around the house. The reason can be streamlined to either trust or archaic thinking.

10. Unwilling Merchants/Store owners

Not all store owners have a POS machine, not all stores accept card payments because some still don’t trust the system or the feel the amount they pay as commission to the card companies is too much per transaction.

sellers problems with going cashless in Nigeria


  1. The Nigerian Government should introduce an independent telecommunication company with its own satellite, which can guarantee maximum uptime solving POS machine no network problems.
  2. Newer ATM machines should be used in Nigeria. Also, very capable technicians that know their onions should be allowed to work on existing ATM machines suggesting ways for improvement.
  3. The government should hold world-class cashless payment education courses for everyone interested. It should be free.
  4. The government should digitalize payments in places like government offices, tollgates, petrol stations, banks and so on.
  5. The Central Bank of Nigeria should curb excessive bank charges from banks and place a standard bank charge across all banks.
  6. A strong independent government body should be installed which would oversee all digital transactions, provide security measures and curbed fraudulent activities even before they occur. A simple example is to place working CCTV cameras with face and motion detection around ATM venues.
  7. Periodic review of policies in place to make the cashless policy work, see if they are working and change them when needed.


TechAdvance is a payment application development company with a strategic focus in developing and deploying niche payment companies to serve the needs of large public and private sector organisations in Nigeria.

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