Nigeria's central bank has kicked off its 'cashless Lagos' project, introducing limits on how much paper money people can withdraw and deposit in a bid to encourage the transition to electronic payment methods.
Last year the central bank set out a range of policies designed to wean the country off expensive and risky cash in favour of electronic money, arguing that the dominance of paper has big cash management, security and money laundering implications.
Lagos State is acting as the testing ground for the policy, and citizens will now face a daily cumulative limit of N150,000 for cash withdrawals and deposits with corporations told to stick to a limit of N1000,000.
However, the charges levied for exceeding these amounts will not come into force until 31 March amid concern and confusion over the plans, with the central bank also issuing a statement clarifying that it is trying to reduce, not eliminate, paper money.
The CBN argues that it wants: "To drive development and modernisation of our payment system in line with Nigeria's vision 2020 goal of being amongst the top 20 economies by the year 2020. An efficient and modern payment system is positively correlated with economic development, and is a key enabler for economic growth."
To help make electronic payments more accessible, CBN has selected French vendor Ingenico for the provision of point-of-sale terminals. Guaranty Trust Bank, Zenith Bank, United Bank for Africa, First Bank, First City Monument Bank, Oceanic Bank and Unity Bank have between them already purchased 14,000 Ingenico machines for deployment this year. As the project is expanded to the rest of Nigeria, Ingenico claims it could end up supplying hundreds of thousands of terminals over the next four years.
Gansirey Seck, MD, Ingenico Nigeria, says: "Ingenico is very pleased with the success obtained in a short timeframe in Nigeria. Taking customers beyond conventional payment through value added services on the POS will greatly contribute to the sustainable development of electronic payment in Nigeria."