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Money Matters with Nimi: Are You Ready For the World’s Move to Digital Money?

If you have not yet embraced your bank’s internet banking service, there are some compelling reasons to do so. With internet connectivity, you have unlimited access to your bank accounts and can carry out most of your routine banking transactions at your convenience; you can check your account balances, pay bills, make transfers, and manage your various accounts with a few simple clicks from your computer, your laptop, your tablet, or your cell phone.

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Whether you like it or not, our world is becoming cash free. How prepared are you for change?

The Central Bank of Nigeria’s (CBN) cashless policy commenced on January 1, 2012 in a phased approach that featured Lagos as the pilot state because of its “financial sophistication, the presence of an enabling infrastructure, volume of cash transactions and exposure of residents to alternative payment channels.” The cashless policy aims at reducing the volume of cash in circulation by transforming our heavy reliance on cash to a digital electronic cashless country.

In a circular, dated September 17, 2019, the CBN’s Director of Payments System Management Department, Sam Okojere, instructed deposit money banks to implement the policy starting from September 18, 2019. “Charges on deposits shall apply in Lagos, Ogun, Kano, Abia, Anambra, Rivers states and the FCT, in addition to already existing charges on withdrawals, effective September 18, 2019.”

The CBN’s cashless policy will be extended nationwide from March 2020. According to the policy, “a 3% processing fee will be charged for withdrawals of amounts above N500,000 for individual accounts, while 2% will be charged for deposits. For corporate accounts, a processing fee of 5% will be charged for withdrawals, and 3% for deposits of amounts above N3 million.”

All over the world, the trend has been for governments and financial institutions to pursue policies to reduce the volume of cash in the system. In some developed countries, one can do almost entirely without the use of hard cash and electronic means of payments far outstrip cash transactions in much of the industrialized world today; indeed one is regarded with some consternation, even suspicion, should you wish to make a purchase with large amounts of cash.

As we inch closer towards cashless Nigeria where digital or electronic money will eventually take precedence over physical money, how prepared are you? How would you feel if you were told that you would no longer be able to use paper money and would have to rely on electronic technology for all your transactions? We all like the speed and convenience of e-commerce, but we also love the look and feel of our hard cash in our wallets; it is tangible and feels real and it gives one a sense of really possessing something.

Technology has changed so much in our lives; the greatest impact is the actual way that transactions take place. The world of banking and finance has been one of the greatest beneficiaries of technological innovations and advancements in global payment systems.

There are many benefits from doing away with “old fashioned cash.” It is a means of curbing corruption, money laundering and other cash related financial crimes, global terrorism and cross-border crimes. It also helps to address the enormous security challenges and the exorbitant cost of cash management logistics to the financial services and banking industry.

Businesses will embrace it as a means of receiving instant payments, cutting their expenses and institutionalizing operational efficiency, thereby increasing their revenues. The rest of us should embrace electronic, internet and mobile banking for the speed, convenience, security, and the extraordinary degree of efficiency that they provide.

The internet has revolutionized banking and personal financial management in many ways. Nowadays, we are all so busy in our work lives, that there simply just isn’t the time to visit the bank. If you have not yet embraced your bank’s internet banking service, there are some compelling reasons to do so. With internet connectivity, you have unlimited access to your bank accounts and can carry out most of your routine banking transactions at your convenience; you can check your account balances, pay bills, make transfers, and manage your various accounts with a few simple clicks from your computer, your laptop, your tablet, or your cell phone.

Do you use your bank’s electronic banking services, which automate processes relating to your financial transactions for convenience and efficiency? The most common forms of electronic payments are telephone banking, internet banking and plastic cards; credit cards, debit cards and automatic teller machine (ATM) cards instead of currency.

Debit and credit cards have transformed our financial lives; one can effect a host of transactions without ever having to visit a bank. Whether it is from a Point of Service (POS) portal at your nearest grocery shop, an increasing number of merchants, including shops, restaurants, clubs, hotels etc will accept your card.

Mastercard, Visa, and Verve are at the forefront of card technology in Nigeria and have changed the way we pay for transactions. Apart from enabling you to access local currency in Nigeria, you can access foreign exchange from your Naira account while abroad, with limits. Denominated in Naira, they can be used at ATMs or point of sale (POS) terminals globally where the Visa or Mastercard signs are displayed to either pay for goods and services or access foreign exchange. Linked to your current or savings account, all transactions reflect instantly.

With the future looking cashless, as electronic payments replace cash, one must also consider some of the enormous challenges ahead. We must all concern ourselves with cyber security issues. Technology all over the world is vulnerable to glitches, outages and mistakes. This is even more so in an environment where the infrastructure has not kept apace with the transformational growth of technology. We must all thus be conscious of an increased risk of crimes such as identity theft, fraudulent transactions and data breaches, due to the higher volume of cashless transactions leaving us all more vulnerable and exposed.

Are your smartphones, computer and other devices password protected? If your password or PIN [Personal Identification Number] is compromised, this could lead to devastating losses should unscrupulous people gain access to your financial information.

Do not share your passwords or PINs with anyone. If you might forget them and need to write them down, then store them securely. Change your passwords and PINS periodically and use different codes for different accounts. Be creative about your choice of passwords and PIN numbers; family birthdays and names are very easy to decipher so avoid using those.

In addition, secure your computer with a firewall and security software packages that have anti-virus and anti-spam features. If you are technologically challenged, an IT specialist or a techy friend can help you download and install this. Choose someone you can trust!

Ignore phone calls or email requests for personal information. Your bank and other legitimate companies will never request for sensitive information such as passwords and PINs by email; these are usually fraudsters attempting to defraud you. Contact your bank directly and report such incidents.

There is no guarantee that your financial information will be completely secure even if you put all these basic measures in place. However, you certainly stand a better chance of limiting access to sensitive information and protecting your personal finances from fraudsters.

It is important to begin to become familiar with the alternative electronic payment channels available to you and decide which will best suit your personal financial habits and circumstances. Be deliberate about embracing technology, and reduce your dependence on cash. Don’t get left behind.

Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. You can reach Nimi via the following: Email; [email protected] | Website: www.moneymatterswithnimi.com | Twitter: @MMWITHNIMI | Instagram: @MMWITHNIMI | Facebook: MoneyMatterswithNimi

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