A STUDY INTO THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLESSÂ POLICY IN PORT HARCOURT, NIGERIA
CHAPTER ONE
INTRODUCTION
BACKGROUND TO THE STUDY
One of the prerequisites for the development of national economy according to Ajayi et al, 2006 is by encouraging a payment system that is secured, convenient, and affordable. The world today is moving away from paper payment system to electronic means, especially payment cards (Humphrey, 2004). In most countries, for instance, it is possible to pay for a snack through vending machine by simply dialing a number on one’s phone bill. In Nigeria, like most developing countries, cash is the main mode of payment and a large percentage of the populations are unbanked (Ajayi et al., 2006) thus making the Nigerian economy to be heavily cash-based.
Recently, the Central Bank of Nigeria (CBN, 2011) revealed that the direct cost of cash management is estimated to reach a staggering sum of one hundred and ninety two billion naira (N192bn) in 2012. Other challenges resulting from high-cash usage among others include: armed robberies and cash-related crime, revenue leakage arising from too much of cash handling, inefficient treasury management due to nature of cash processing, high subsidy, high inflation etc (Akpan, 2009). Against these backdrops, the CBN introduced the cashless policy in April 2011 with the objective of promoting the use of electronic payment channels instead of cash. This no doubt led the CBN into conducting a pilot scheme of the cashless policy in Lagos in January 1st 2012. So far, implementation of the policy in Lagos has not gained expected reaction. Hence a rollout across the country has been substituted with phase implementation in Port Harcourt, Kano, Abia and the Federal Capital Territory (CBN, 2012). A cashless economy is one where purchases and transactions are done mainly by electronic means and seldom by cash. The policy, introduced by the CBN in April 2011, states that individual and corporate customers are restricted to a daily cash withdrawal and lodgment of N500000 and N3m respectively.
