A few months ago I wrote how we have made Naira a commodity where you need Naira to deposit and withdraw Naira:
“Simply, like the POS business which has turned Naira into a “commodity”, enabling the buying and selling of Naira, BDC and POS share the same genes. Yes, I want N10,000 and you can take N100 if you can give me this money as a POS agent. I want to deposit N20,000, please this N500 is my fee. Magically, Naira is now a commodity where to withdraw or deposit, someone has to pay a fee. When you model that the central bank noted that more than 90% of cash in circulation is outside the banking sector, and a big chunk goes through this POS system, you will agree that it is indeed a great sector. Under that system, how do you convince a young man to start a poultry business when he can insert himself with a POS merchant in the village market to tax the citizens?”
Put this financialization of Nigeria as you process the new policy: “The Central Bank of Nigeria (CBN) has introduced new cash-out limits for Point of Sale (PoS) transactions, restricting agents to a maximum daily transaction limit of N1.2 million. Additionally, customers are now limited to withdrawing N100,000 per day from PoS agents.”
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These measures, outlined in the CBN’s circular titled “Circular on Cash-Out Limits for Agent Banking Transactions,” aim to promote a cashless economy and strengthen the integrity of agent banking operations. The circular, signed by Oladimeji Yisa Taiwo of the Payments System Management Department, underscores the need for enhanced electronic payment adoption and fraud prevention.
Key highlights include a weekly withdrawal cap of N500,000 for customers and the exclusive use of float accounts by agents. The CBN also mandates that agent banking activities be distinctly separated from merchant operations and must apply the approved Agent Code 6010 for transactions.
The directive is addressed to Deposit Money Banks, Microfinance Banks, Mobile Money Operators, and Superagents, emphasizing the need for standardized practices across the agent banking ecosystem. – Source (X)
Good People, many things are happening here. The villager functions on top of POS agents since there is no banking institution available. For the apex bank, its desire to punish electronic transactions with stamp duty and other fees scare the poorest in the march to cashless society. Hope we can reconcile the anomaly where you want the poor to go electronic even as you are charging them fees to do that.
Financialization of Nigeria – The Species of Bureaux de Change and POS Agents
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We are too chaotic to function as a well ordered society. Our extractive mindset and penchant to steal from one another do not help either. Now that we know that we have a problem, next is to come up with viable solutions. What can we do?
We have to redominate the currency, with the highest currency being N100. You cannot have a single note of N1000 in a hyperinflation environment and expect currency circulation to go through the formal banking system. We always make unforced errors and then start struggling to come up with meaningful solution. You are never going to get the large chunk of the cash outside the banking sector without redesigning/redenominating the currency. You cannot preach your way to success, you must ruthlessly drive your way to success.
Again, why are we so mentally poor to the point that we believe that stealing N50 from people’s money in the name of stamp duty is how we intend to make government purse richer? It’s an indictment of low quality thinking people we have been condemned with. These are what thieves and petty criminals think and do, because there’s nothing bold or ambitious about increasing your revenue base by such pitiful means.
To make digital translations attractive, they must be cheaper.
While this new policy maybe marinating, we can assume the resilient spirit of these POS operators will find a way around it albeit temporarily.
We know mismanagement and impunity in pilfering our common wealth is partly responsible for this so called ‘stamp duty’, the Struggling masses bears the brunt once again.
It will be interesting to see the effects of this on financial inclusivity.