Nigeria is actively moving towards a cashless economy, promoting digital payments and expanding the network of terminals. However, significant costs for small traders are hidden behind this progress.
Growth of Cashless Payments in Nigeria
The shift towards cashless transactions in Nigeria is being strengthened by government policies that support digital payments and introduce the digital currency eNaira. The increase in the number of cashless transaction terminals simplifies the buying process in markets and services. Nevertheless, cash still plays an important role.
Hidden Costs for Small Traders
Small traders face high transaction fees when using cashless systems, complicating their financial situation. For instance, a transfer fee can account for up to 10% of their profit, significantly affecting their income. Some customers, refusing to pay the additional charges, force traders to accept cash.
Future Prospects of Digital Payments in Nigeria
Despite the clear advantages of cashless transactions, such as speed and convenience, high fees and unreliable services compel small traders to resort to cash. Policy changes are needed to make digital payments more accessible and profitable for small businesses and increase trust in these systems.
For a successful transition to a cashless economy, policy must focus on reducing transaction costs and ensuring the availability of digital financial tools for small traders. Only then can we speak of genuine financial inclusion.
