Many banks’ applications have not lived up to their reputation, with only a few fintechs coming to the rescue of Nigerians. The cash crunch which had besieged the country for weeks had been made worse with the inability to consummate electronic transactions with ease as well as a complicated conflict resolution for failed transactions. This is as players in the fintech ecosystem blamed the lack of preparedness as well as infrastructure in the banking system for the lapse.
With the cash scarcity, Mrs Olajire, a wholesale trader said she has no choice to but to sell to her customers on credit as those who wanted to pay are having difficulties with transfers. Also, a petty trader, Mrs Adekunle said she is still struggling to recover a N20,000 failed transaction from her bank since January. “I dont want to do any transfer again until the bank refunds my money, but what do I do when there is no cash and I i have to buy my drugs,” she lamented.
With increased usage of electronic transactions, transfers had become cumbersome as well as Point of Sale transactions. Many transactions have failed with no resolution as banking halls are difficult to get into. Henry a business man said he has over N200,000 in failed transactions with two banks.
“It is difficult to enter the banking halls so I have not been able to complain. There is no cash so I have no option but to continue to try. The banking applications are epileptic as one transaction would say failed and the cash would already be deducted. If I do transfer, it would go on my side and would not get to the destination,” he lamented.
Last year, the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, had mentioned plans of making the country 100 per cent cashless. According to him, there are enough infrastructure in place to make it possible.
“I can say from what I have read from online banking to PoS to ATM, mobile banking , I want to say we have provided all the needed infrastructure that will enable us make cashless a nationwide journey,” he noted saying that all infrastructure that is needed to ensure this such as the CBDC, online banking, Payment System Banks (PSBs), Point of Sale terminals (PoS) agent banking, mobile banking and ATMs have since been deployed to ensure the smooth operations of a cashless economy.
However, Nigerians continue to face hardship in accessing their funds as cash scarcity persists while alternative channels remain problematic. This is as experts said the downtime experienced by many of the banking applications and alternative channels has shown the lack of adequate investment in technology by the players in the Nigerian financial industry.
According the co-founder and project manager of VPD Money, a digital fintech, Mohammed Adeleke, the reason for the poor internet banking services experienced particularly in the period of cash crunch is because the Nigerian banks do not have solid technology or infrastructure to manage the rush.
Adeleke disclosed that most incumbent banks are running on old technology, hence the reason they were not able to manage the rush. “Imagine all of people trying to pass through a tiny door. It is either they break the door or they slowly pass through it. That was what happened. The infrastructure in most banks could not manage the rush. That was why transaction was not going. You want to send money, but the internet banking platform is not opening. Even if you successfully send money, it takes days for it to reflect in the receivers’ account or bounce bank to your account. The simple explanation for this, is that, the bank’s are still operating on poor technology,” he explained.
The CEO, Precise Financial System, Mr Yemi Okeremi, who said the banking technology in Nigeria is fairly sophisticated, with respect to the country’s level of development, notes that “the naira redesign, leading to little fund in circulation and surge in the use of internet banking system has caused more harm than good, as the fragile infrastructure put in place by the banks have further depleted as a result of traffic.
“For me, we are not ready for the cashless policy. Before this time, we had enjoyed fairly good internet and mobile banking and that is because the banks had scaled up based on what was on ground. They know the number of Nigerians who have signed up for their internet banking services and they also have idea of the Nigerians that are banked and have put infrastructure in place to service them.
“All of a sudden, the CBN then came up with the idea that all Nigerians must go cashless. This is like double of the figures that were using their internet services. There are many Nigerians who have accounts with banks, but not using their internet banking services. These set of people were forced to start using internet banking overnight, which has slowed down servers, thereby delaying transactions or even declining them,” the CEO averred.
Asides this, he said many tech experts have left the country for greener pasture, leaving the less experienced personnel to manage the infrastructure in the bank, adding that, “Most of these freshly graduands do not know the nitty-gritty on how to manage some of the software and hard ware used in the banking sector. Also, poor internet connectivity has marred the seamless transition to cashless, in the sense that, for cashless policy to work, people must transact and receive alert immediately. But the reality is not so, as some transaction takes up to a day or two, before the other party would receive alert.
“In essence, infrastructure deficit, brain drain, and social problem, whereby every Nigerians now want to use internet banking at the same time are the reasons why Nigerians are having issue with internet banking,” the CEO explained.
He, however, urged CBN to reconsider its decision. “We know cashless process is great for any economy to grow, however, CBN would have been gradual in the process of turning the Nigerian economy into cashless economy. The banking sector is doing the best they can do, because nobody envisaged the traffic of internet banking. I must commend them, however, I would appeal to them to scale up, to meet this present challenge.
“On broadband connectivity, the telecoms sector is doing its best in that the industry is planning to scale up broadband connectivity level to like 70 per cent by 2024. If that happened, people will be able to receive alert of transaction on time,” he stated.
On his part, the head, Operations, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbolahan Awonuga, has urged the banking sector to upgrade their capacity.
Awonuga revealed that, “What the government is doing now, is that they want a total cashless environment. We are taking about digital economy, but there must be some level of preparation. The bank should be able to accommodate the traffic flow of their customers.
“If everybody should go into cashless, the internet platforms of the banks should be able to manage the traffic. The reason we are experiencing delay in transaction or declined transaction, is because there are lots of traffic at the backend. People want to do internet banking at the same time, however, because of the capacity, they cannot enter at the same time.”
He advocated for more partnership with fintech companies. “There are some few fintech companies who are working with banks to ensure seamless online internet banking,” Awonuga disclosed.
