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In a world where technology has advanced, electronic payments have emerged as a game changer in the global financial landscape. Nigeria, with its fast-growing economy, has recognized the potential of electronic payments to accelerate its cashless policy. This is an ambitious goal set by the government to reduce dependence on physical cash transactions. Therefore, Nigeria’s journey towards becoming a fully digitized economy is well underway with e-payment platforms becoming increasingly ubiquitous. In this article, we delve deeper into how electronic payments are accelerating Nigeria’s cashless future.

How it all began

Firstly, it is important to understand what the cashless policy in Nigeria entails. In 2012, the Central Bank of Nigeria (CBN) introduced the policy as a way to promote the use of electronic payments in the country. The goal was to reduce the amount of physical cash in circulation, and encourage Nigerians to use electronic payment channels for transactions. The policy applies to individuals and businesses, and covers transactions such as deposits, withdrawals, and payments.

The CBN initiatives to drive the cashless policy

To drive the seamless implementation of the cashless policy the CBN rolled out timely initiatives to ease the transition of the policy into daily transactions. Some of these initiatives are stated below:

1. The 2012 electronic payments directive

Financial institutions were required to increase their investments in digital payment infrastructure, promote digital payments among their customers, and develop a strong regulatory framework with the CBN as a result of the directive. 

By enhancing transparency and efficiency in the economy, this initiative aimed to improve the financial sector and increase transparency. As a result, the A range of achievements were made in the financial sector, such as the expansion of automated teller machines, point-of-sale terminals, as well as a significant increase in electronic channels.

2. Cash transaction limits

More recently, the CBN set transaction limits for different payment channels, such as Automated Teller Machines (ATMs), Point of Sale (POS) terminals, and mobile payments. In this initiative, a daily withdrawal fee of N500,000 is imposed on individuals and N3,000,000 on corporations. This was later revised when the new notes were introduced. Without eliminating cash, the policy aims to reduce the amount of physical cash in circulation and promote electronic transactions for payments, transfers, and other financial activities.

A man using an ATM debit card for electronic payments

Benefits of cashless policy

The cashless policy has several potential benefits for the Nigerian economy. Firstly, adopting a cashless policy has helped reduce the cost of handling physical cash. The CBN spends a significant amount of money on printing, transporting, and securing physical cash; reducing the amount of cash in circulation helps in reducing these costs. 

Secondly, the policy will improve financial inclusion by making it easier for people to access financial services. Electronic payment channels are more convenient and accessible than traditional banking services, especially for people who live in rural or remote areas. 

Thirdly, the policy will help to reduce the incidence of cash-related crimes, such as armed robbery and money laundering. By reducing the amount of physical cash in circulation, the cashless policy will make it more difficult for criminals to operate.


However, despite these potential benefits, the cashless policy has also faced some challenges in Nigeria. 

One of the main challenges is the lack of infrastructure to support electronic payments. Many parts of Nigeria still lack reliable electricity and internet connectivity, making it difficult to use electronic payment channels. In addition, some people lack the access to the necessary technology or knowledge to use electronic payment channels.

Another challenge is the issue of trust. Many Nigerians still prefer to use physical cash because they are not confident in the security and reliability of electronic payment channels. This lack of trust is attributed to the prevalence of scams and frauds in Nigeria, eroding public confidence in electronic payments.


To successfully implement the cashless policy in Nigeria, it is important to address these challenges. This is possible through investing in infrastructure to support electronic payments. Firstly, this involves building more reliable electricity and internet infrastructure. Secondly, providing training and support for people who are not familiar with electronic payment channels. Thirdly, provision of incentives for businesses to adopt electronic payment channels, such as tax breaks or reduced transaction fees. Finally, addressing the issue of trust to improve the security and reliability of electronic payment channels. This involves working with financial institutions and technology companies to develop better security protocols and fraud detection systems.

Frequently Asked Questions (FAQ)

  1. What are the challenges of cashless policy in Nigeria?

In Nigeria’s cashless economy, there are several challenges that need to be addressed, including fraud, unauthorized deductions from accounts, unemployment, low levels of literacy, and unreliable power supply.

2. What are the features of a cashless policy?

Cashless transactions refer to the process of making or receiving payments without the use of physical currency, wherein various forms of digital transactions like credit/debit cards, cheques, DD, NEFT, RTGS or other online payment methods are used to eliminate the necessity of hard cash.

3. How does cashless policy affect the economic growth of Nigeria?

According to the study, the implementation of a cashless policy in Nigeria has led to significant improvements in monetary policy, payment system efficiency and speed, job creation, and technological infrastructure. As a result, the study recommends that the government should take steps to encourage further adoption of cashless policies in Nigeria.


The Cashless Policy, which facilitates a swifter and more secure method of making payments is the future. It has the capabilities to revolutionize the banking system in all corners of the globe. Additionally, it offers countless opportunities for individuals and businesses alike to enjoy secure payment solutions. Technology has developed further along this path and new models for payment are evolving from traditional methods. Therefore cashless transactions will take precedence over more dated financial systems as society moves towards an ever-increasing digital age. Learn more about electronic payments and how to get started here


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