Cashless policy: SMEs differ on imposition of charges

Small and Medium Enterprises operators are expressing divergent views on the cashless policy which attracts 3% processing fees for withdrawals and 2% processing fees for lodgments of amounts above N500,000 for individual accounts.

The Central Bank of Nigeria recently said the nationwide implementation of the cashless policy will begin by March 2020. It said that would signal the imposition of charges on deposits in addition to those already existing on withdrawals.

The charges, which took effect from September 18, will attract 3 per cent processing fees for withdrawals and 2 per cent processing fees for lodgments of amounts above N500,000 for individual accounts.

For corporate accounts, the apex bank in the circular said that Deposit Money Banks ( DMBs) would charge 5 per cent processing fees for withdrawals and 3 per cent processing fee for lodgments of amounts above N3,000,000.

However, the apex bank disclosed that the charge on deposits would apply only in Lagos, Ogun, Kano, Abia, Anambra, Rivers States and the Federal Capital Territory.

The Small and Medium Enterprises owners have been reacting to the development.

A female entrepreneur, Mrs Vanessa David Aladesunmi, said the policy has both advantages and disadvantages.

“This policy has been in place since the launch of cashless economy, but it has not been implemented. The benefit is to encourage people to go cashless. As a trader, you have POS and transfer options. But some people still want to pay cash, and this poses a potential risk to the business owner.

Again, if your money is in cash, government will not have a way of tracing it, but transactions that have been done electronically can be traced. So, if you want to fight the issue of insecurity, going electronic is the best method. But, definitely it’s going to affect small businesses,” she said.

But Madam Ganiyat Soloye who runs a travel agency said the policy will reduce the net worth of the SMEs.

“My take on this is that it is very bad. As it is now, if you withdraw, you get charged, if you deposit, you get charged, so, are the banks helping SMEs to grow or are they reducing your net worth? It’s like they have imposed a fine that they know is guaranteed to work, because we can’t go totally cashless.”

But the MD/CEO of Wood et al, Mrs Omololami Ajani, says banks/government should have made POS and cash transfers very effective before implementing the policy.

“The policy has good intentions but the implementation track is not ideal. In a business like mine, sometimes when payment is made through POS, it may not reflect. You have network issues and the error messages you get discourage you from using the POS.

“There are times the customer has been debited and the receipt shows declined. Now, the customers confidence is lost and it’s no fault of the supplier. And you now penalise us when we lodge cash or make withdrawals when we do not have alternative means of lodging.

“Making cash transfers has its own problems as well. So they have to work from the back-forward. You have to make sure that all the platforms that will support this policy are working well and then the policy will work.

“I don’t think there is anyone that enjoys carrying cash from point A to B for security reasons.”

However, the CEO of Amira Youghurt, Hajiya Amina Zanna Ibrahim, said the policy will help mop up liquidity in the economy.

“CBN is the one that regulates the economy, so if there is excess liquidity, it can reduce it. I believe they are doing this to reduce the amount of cash in the nation.

“They want you to do transfer, use ATM, or POS, so that the cash in the economy will reduce. They want to make the economy cashless. I am in support of it.

“In other climes, they use their credit and debit cards to make payments. As a business owner, I think it’s going to help,” she said.

Speaking on the policy, the Director, Payments Systems Management Department of the CBN, who doubles as the Chairman of the Nigeria Electronic Fraud Forum (NeFF), Mr. Sam Okojere, who spoke with Daily Trust said the wrong people are crying over the policy.

“Most of those who have raised their voices are not even impacted by the policy because records show that they do volumes far below the threshold,” he said.

He said the introduction of the processing fee is not to punish anyone but to change attitude.

Okojere said: “We are saying, there are several other means that do not involve physical cash and we have done quite a bit in strengthening these payment systems.”

The Director General Nigeria Employers Consultative Association (NECA), Timothy Olawale, who said the directive was to move the country into a cashless economy and reduce crime involving cash, added that there should have been enough notice before implementation.

He also said it would have the greatest impact on retail businesses and other medium-scale retailers in the fast moving consumer goods sector.

“Though the overall aim of reducing cash transactions is good, the policy will, however, increase the cost of doing business and force organisations and individuals to start multiple deposits and withdrawals in order to beat the charges,” Olawale said.