It’s day 6 of the 37 meeting days and we discussed WHY NIGERIA MUST MOVE FROM A CASH-BASED SOCIETY TO A CASHLESS SOCIETY, it was headed by BRO. INK .IGWE GODFIRST Rivers State director general.

WHAT IS A CASH-BASED SOCIETY AND WHAT IS A CASHLESS SOCIETY?

A CASH-BASED SOCIETY IS A SOCIETY WHERE MOST OF THE FINANCIAL TRANSACTIONS DONE BETWEEN CUSTOMERS AND MERCHANTS ARE DONE USING PAPER MONEY.
ON THE OTHER HAND IN A CASHLESS SOCIETY, PAPER MONEY IS NOT ENTIRELY ELIMINATED, BUT MOST OF THE TRANSACTIONS BETWEEN CUSTOMERS AND MERCHANTS ARE DONE DIGITALLY.

WHEN YOU USE YOUR BANK SERVICES TO TRANSFER MONEY TO SOMEONE, YOU ARE USING A DIGITAL SYSTEM, THAT’S CASHLESS.

THIS CAN BE DONE, USING THE USSD CODE OF YOUR BANK OR THE MOBILE BANKING APP.


MANY FINTECH SERVICES HAVE ALSO BEEN DEVELOPED TO PROMOTE CASHLESS TRANSACTIONS AND REDUCE HANDLING OF CASH. WE HAVE THE LIKES OF PAGA, MOMO, KUDI, ETC.

THE CENTRAL BANK OF NIGERIA HAS ALSO ENCOURAGED BANKS TO PROMOTE THE USE OF DEBIT AND CREDIT CARDS.

THAT IS WHY SOME BANKS ONLY ALLOW YOU TO WITHDRAW FROM THE COUNTER IF YOU’RE WITHDRAWING MORE THAN 100 THOUSAND NAIRA.


MANY BUSINESSES HAVE BEEN ENCOURAGED TO BEGIN USING POS MACHINES TO ACCEPT MONEY DIGITALLY.

THERE ARE SEVERAL REASONS WHY A CASHLESS SOCIETY IS PREFERRED TO A CASH-BASED SOCIETY, BUT WE’LL TAKE JUST A FEW.

LOOTING/THEFT.
MANY BUSINESSES TODAY HAVE CRASHED BECAUSE A SALES BOY/GIRL CONSISTENTLY LOOTS MONEY CONSISTENTLY FROM THE BUSINESS OWNER.

BECAUSE THE TRANSACTIONS ARE DONE IN CASH, IT’S EASY TO TAKE ASIDE SOME MONEY WITHOUT THE BUSINESS OWNER NOTICING.

IMAGINE IF ALL OR MOST OF THE TRANSACTIONS IN THAT BUSINESS WERE DONE THROUGH BANK TRANSFERS DIRECTLY TO THE BUSINESS OWNERS BANK ACCOUNT, WOULD IT BE EASY TO TAKE AWAY MONEY? PROBABLY NOT.

LOOTING MAY NOT BE ELIMINATED, BUT IT WILL REDUCE, THUS PROMOTING THE GROWTH OF THE BUSINESS.

ACCESS TO LOANS.
MOST PEOPLE ARE DOING WELL IN THEIR BUSINESS AND THEY EVEN HAVE A BANK ACCOUNT WITH WHICH TO TAKE BANK TRANSFERS.

BUT BECAUSE MOST OF THEIR TRANSACTIONS ARE STILL DONE IN CASH, THIS PRESENTS A CHALLENGE WHEN A BUSINESS NEEDS LOANS.

THIS IS BECAUSE THE TRANSACTIONS DONE DIGITALLY DO NOT PROVIDE SUFFICIENT RECORDS TO GIVE THE BANK ENOUGH CONFIDENCE TO GIVE THE PERSON A LOAN.

THERE ARE A LOT OF OTHERS WHO DOESN’T EVEN HAVE BANK ACCOUNTS, THEY END UP SAVING USING MONEY COLLECTORS, MOSTLY KNOWN AS AKAWO, WHICH PROVIDES LITTLE TO NO INTEREST ON THE MONEY SAVED.

AND WHEN THEY NEED A LOAN, THEY CAN GET VERY LITTLE IF ANY. SO THIS IS AFFECTING THE COMMUNITY AT LARGE AS MOST BUSINESSES ARE NOT REACHING THEIR FULL POTENTIAL DUE TO LACK OF BUSINESS FUNDING.

CORRUPTION
IMAGINE THAT THE GOVERNMENT INTENDS TO SHARE MONEY TO ALL CITIZENS. LET US SAY 5000 NAIRA TO EACH CITIZEN.

SINCE IT WILL BE DONE ON CASH, THEY’LL SEND THE MONEY TO STATE GOVERNMENT, WHICH WILL SEND THE MONEY TO THE LOCAL GOVERNMENTS, AND THEN TO EACH FAMILY. WHEN ITS TIME FOR YOU TO GET YOUR SHARE, DO YOU THINK, YOU WILL GET YOUR 5000 NAIRA COMPLETE?

EVEN IF ITS YOUR FAMILY MEMBER THAT WAS GIVEN YOUR SHARE TO GIVE TO YOU, DO YOU THINK HE/SHE WILL GIVE YOU YOUR SHARE COMPLETE? PROBABLY NOT.

YOU’LL END UP GETTING 1000 NAIRA ONLY OR EVEN 500 NAIRA. THIS IS BECAUSE YOUR SHARE WILL CONTINUE TO DECLINE AS IT MOVES FROM STATE TO LOCAL GOVERNMENT TO FAMILY BEFORE IT GETS TO YOU.

NOW, WHAT IF IT WAS TO BE DONE DIGITALLY, AND EVERYONE IS TO OPEN A BANK ACCOUNT AND SUBMIT THEIR BANK ACCOUNT DETAILS TO THE GOVERNMENT IF THEY PAY AT ALL, WOULDN’T YOU GET YOUR FULL SHARE LIKE EVERYONE ELSE? OBVIOUSLY YES.

HIGH COST OF MONEY PRINTING
DO YOU KNOW WHY MOST OF THE MONEY YOU TAKE FROM THE BANK ATM ARE 1000 NAIRA NOTES? YOU RARELY SEE ATMS THAT PAY EVEN 500 NAIRA.

AS FOR THE LESSER DENOMINATIONS, JUST FORGET IT. THIS IS BECAUSE THE COST OF PRINTING 50 NAIRA, 100 NAIRA NOTES ARE ALMOST AS EXPENSIVE AS PRINTING 1000 NAIRA NOTES.

SO IT MAKES MORE SENSE TO PRINT THE HIGHER DENOMINATIONS. UNKNOWN TO MANY PEOPLE, PRINTING MONEY IS VERY EXPENSIVE. FOR THAT REASON, IT’S SOMETIMES CHEAPER TO PRINT MONEY ABROAD THAN FOR THE CENTRAL BANK TO PRINT IT THEMSELVES.

A REPORT SAYS THAT FROM 2013 TO 2018, THE CENTRAL BANK HAS SPENT 231 BILLION NAIRA JUST TO PRINT MONEY.

IN 2014 ALONE IT COST 31 BILLION NAIRA AND IN 2018 IT COST 49.5 BILLION NAIRA, THAT IS 105% INCREASE IN PRINTING COST.

HOW MUCH DO YOU THINK IT COST NOW, 2021? IF YOU ARE IN NIGERIA, YOU KNOW YOU’VE PROBABLY BOUGHT ITEMS AT HIGHER PRICE JUST BECAUSE THERE IS NO CHANGE.

YOU’VE LEFT MONEY FOR A LOT OF CONDUCTORS AS WELL BECAUSE THERE IS NO CHANGE, ALL THESE IS BECAUSE OF THE HIGH COST OF PRINTING MONEY.

IF NIGERIA WASN’T SUCH A CASH DEPENDENT SOCIETY, WE WILL BE SAVING THE COUNTRY A LOT OF MONEY, WHICH COULD BE DIVERTED TO OTHER MORE PRESSING NEEDS.

HOARDING AND ABUSE OF CASH.
EVERY YEAR THE GOVERNMENT PRINTS ADDITIONAL MILLIONS OF BANKNOTES TO THE PREVIOUS YEARS.

IN 2017 THERE WERE 256.61 MILLION PIECES OF BANKNOTES IN CIRCULATION AND AS AT THE END OF 2018, THERE WERE 496.61 MILLION PIECES, WHICH IS AN ADDITIONAL 240 MILLION PIECES ADDED IN JUST ONE YEAR.

ONE OF THE REASONS IS BECAUSE MANY WEALTHY PEOPLE STOCKPILE OR HOARD CASH FOR THEIR GAIN.

WITH ALL THESE BENEFITS OF A CASHLESS SOCIETY, WHY IS IT SO DIFFICULT FOR NIGERIANS TO ABANDON THE “CASH IS KING “MENTALITY AND MOVE INTO A CASHLESS SOCIETY?

POOR BANKING INFRASTRUCTURE

THOUGH THERE ARE SEVERAL BANKS IN NIGERIA, THERE ARE NOT ENOUGH BRANCHES TO CATER FOR THE BANKING NEEDS OF THE MORE THAN 200 MILLION POPULATION OF NIGERIA.

THERE ARE JUST ABOUT 5,000 BANK BRANCHES NATIONWIDE. THIS CAN BE VERY DISCOURAGING FOR THE UNBANKED WHO WANTS TO BE BANKED.

POOR BANKING SERVICES

IT’S NOT UNCOMMON TO HEAR PEOPLE SAY THAT IF YOU HAVE SOMETHING TO DO AT THE BANK, CANCEL ALL OTHER APPOINTMENTS FOR THAT DAY.

WHEN THERE ARE ISSUES TO BE RESOLVED WITH THE BANK, SOMETIMES THE STRESS INVOLVED TO RESOLVE THEM SEEMS UNBEARABLE FOR MANY BUSY PEOPLE.

AS SOME OTHERS PUT IT, TO PUT YOUR MONEY IN THE BANK YOU’LL QUEUE UP. TO ALSO TAKE YOUR MONEY, YOU’LL QUEUE UP AS WELL.

NO INCENTIVE.

MOST PEOPLE DON’T SEE A VALID REASON FOR OPENING A BANK ACCOUNT. RATHER THAN EARNING INTEREST ON THEIR MONEY OR GETTING ACCESS TO LOANS, THE BANKS CONTINUE TO DEDUCT PEOPLE’S MONEY INDISCRIMINATELY.

DIFFERENT TYPE OF CHARGES EVERY DAY. STAMP DUTY AND ATM MAINTENANCE FEES EVERY DAY.

BUT IMAGINE IF EVERY BANK ACCOUNT OWNER RECEIVES FREE 50,000 NAIRA EVERY MONTH FROM THE GOVERNMENT, DON’T YOU THINK MORE PEOPLE WILL LIKE TO OPEN AN ACCOUNT? THEY WILL, IF NOT FOR ANYTHING, AT LEAST FOR THE MONEY.

TELL THEM THE 50,000 NAIRA CAN ONLY BE SPENT CASHLESSLY, WITH NO OPTION TO WITHDRAW IT, AND SEE HOW NIGERIA WILL GO CASHLESS IN ONE YEAR.

HARD TO RECONCILE TRANSACTION ERRORS.

MANY PEOPLE WHO HAVE DECIDED TO BEGIN USING POS MACHINES IN THEIR BUSINESSES HAVE STOPPED USING IT

WHY? BECAUSE WHEN A TRANSACTION FAILS, ITS TOO MUCH OF A HEADACHE FOR CUSTOMERS AND BUSINESSES TO RECOVER THEIR MONEY. MANY JUST PREFER CASH TO AVOID STORIES THAT TOUCH.

FAKE DEBIT ALERTS HAVE ALSO BEEN USED TO SCAM LOTS OF PEOPLE. SINCE SOME TRANSACTIONS CAN BE SLOW TO VERIFY, MANY BUSINESS OWNERS WILL ACCEPT THE DEBIT ALERT OF THEIR CUSTOMERS, WHICH IN SOME CASES WILL BOUNCE BACK TO THE CUSTOMER LATER ON, OR WAS JUST A SCAM. THIS HAS DISCOURAGED LOTS OF PEOPLE.

THIS ARE SOME OF THE REASONS WHY MOST NIGERIANS ARE EITHER UNBANKED OR PREFER CASH TO USE BANKING SERVICES.

CASH SEEMS MORE TRUSTWORTHY AND EFFICIENT THAN THE CURRENT BANKING SYSTEM.

HERE ARE SOME ADDITIONAL FACTORS THAT COULD HELP US GO CASHLESS QUICKLY AND REDEEM NIGERIA FROM POVERTY

WE MUST PROVIDE AN EFFECTIVE AND EFFICIENT WAY FOR PEOPLE TO DO TRANSACTIONS WITH EACH OTHER, WITH LITTLE TO ZERO TRANSACTION ERRORS. IT MUST BE EASY TO ADOPT AND ACCESSIBLE TO THE LEAST PERSON IN THE COUNTRY.

TO DO THIS, THE CENTRAL BANK OF NIGERIA AND COMMERCIAL BANKS MUST UPGRADE THEIR BANKING SERVICES TO A BLOCKCHAIN THAT VERIFIES TRANSACTIONS IMMEDIATELY USING ARTIFICIAL INTELLIGENCE.


EVERY CITIZEN MUST ALSO BE ABLE TO OFFER BASIC BANKING SERVICES TO ANOTHER CITIZEN IN A FAST AND EFFICIENT MANNER. THE NECESSITY FOR VISITING BANK BRANCHES MINIMIZED.

AN INCENTIVE SHOULD ALSO BE GIVEN TO ALL THOSE WHO GO CASHLESS, LIKE A UNIVERSAL BASIC INCOME TO HELP REDUCE POVERTY.

SINCE NIGERIA HAS A POVERTY PROBLEM, THIS INCENTIVE WILL ATTRACT LOTS OF PEOPLE AND THIS BANK MANY OF THE UNBANKED. WHO DOESN’T LIKE FREE MONEY.

IT’S GOOD NEWS TO NOTE THAT THIS HAS ALREADY BEEN DEVELOPED AND ITS CALLED INKSLEDGER FINANCIAL SYSTEM. IT IS THIS SERVICES THAT HAS TAKEN INKSNATION FROM ZERO TO 7 MILLION MEMBERS IN JUST ONE YEAR. THE LEAST MEMBER REWARDED WITH 120,000 NAIRA WORTH OF PINKOINS MONTHLY TO BE SPENT WITHIN INKSNATION COMMUNITY CASHLESSLY.

WHEN NIGERIA HAS COMPLETELY GONE CASHLESS WITH INKSLEDGER BLOCKCHAIN TECHNOLOGY AND PINKOIN, BUSINESSES WILL HAVE BETTER AND MORE EFFICIENT TRANSACTIONS, NO LOOTING OR STEALING FROM SALES BOYS/GIRLS.

CORRUPTION WILL REDUCE, PROSTITUTION WILL REDUCE, CRIME WILL REDUCE, POVERTY WILL REDUCE. THE GOVERNMENT WILL STOP SPENDING LOTS OF MONEY PRINTING MONEY.

HOARDING OF MONEY WILL REDUCE. NOTHING LIKE FAILED TRANSACTIONS ANYMORE AS PINKOIN TRANSACTIONS ARE VERIFIED AUTOMATICALLY USING PROOF OF AI(PoAI). NO MORE LOOTING OF PUBLIC FUNDS BY GOVERNMENT OFFICIALS. ETC…..

Inksupdate team.

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