The cash withdrawal policy of the Central Bank of Nigeria is threatening to defeat the rationale behind point-of-sale (POS) services, Dataphyte analysis shows.
The POS services have aided the promotion of Nigeria’s cashless policy and simplified payments for consumers and merchants.
However, the new CBN regulation announced on January 9, which limits the total amount of withdrawals businesses and individuals can make, seems poised to roll back the successes of P.O.S. businesses.
According to the new regulation, individuals are limited to daily withdrawals of N20,000 at automated teller machines and N100,000 at the counter. At the same time, businesses are restricted to daily withdrawals of N500,000 at the counter and N20,000 at POS. terminals.
POS operators have made it simpler for both people and company owners to accept payments and conduct business since 2012.
From 155,000 terminals in 2012 to 1.1 million in 2022, the number of POS terminals has grown substantially in the last five years.
POS terminals were established with the aim of promoting a cashless policy and bringing financial services to those who are under- and un-banked in society. The POS market has also proven to be very lucrative as isolated communities, and rural inhabitants struggle to access banks.
Dataphyte engaged with a small number of PO.S operators to identify their anticipated and ongoing challenges brought on by the CBN policy.
Akinwale Emmanuel, a POS operator in Edo State, said the regulation would significantly reduce the volume of transactions and their profits.
“I’ve started looking into other business opportunities I can pursue,” he said.
Mrs Sarah Alimo, a POS agent in Abuja, told Dataphyte she doubted that her business would support her as the new policy came on stream.
“We have enough challenges in circulating the new currency. I have not seen many new naira notes nor transacted with them since they were put into circulation,” she said.
She said the country was not ripe for the new policy, adding that the it would increase unemployment.
Patience Effiong, a POS agent in Abuja, spoke to Dataphyte about how she had to raise withdrawal fees due to the trouble in obtaining cash from other sources after reaching their bank limit of 100,000 and how she had to pay these sources to get cash. Patience said sales had begun to drop even before the new regulation came into effect.
According to Mrs Aderola Ilesanmi, a POS agent in Lagos,
“I process transactions of about N1 million every day on most days; the CBN is just misleading themselves with this policy.”
She said everyone would probably find a way around it because Nigerians were often quick to adapt to circumstances.
She said she got a large chunk of cash customers’ deposits, which had been of great help to her in recent times.
During a live interview on Channels Television, the CBN’s Director of Banking Supervision, Mustafa Haruna, said POS. agents were not in any way endangered by the regulation.
He said contrary to what many people had said, the new regulation would broaden the cashless policy of the apex bank. He stated that expanding the programme was unavoidable due to the high expense of currency management.
Muda Yusuf, chief executive officer, Centre for the Promotion of Private Enterprise, said the cash withdrawal policy of the CBN had thrown the economy into turmoil, hurting the poor population.
According to him, Nigeria’s electronic transactions exceeded N30 trillion each month in 2022, which was a testament that the country had made progress on the cashless policy. He blamed the CBN for understating the challenges posed by the problem and called for the use of both old and new notes for a reasonable period of time.
CBN policy