In a bid to fast-track the transition of Nigeria's cash-based economy to an online payments system, the Central Bank of Nigeria has issued a directive which places existing withdrawal limits on Automatic Teller Machines (ATMs) and foreign transactions on all existing debit cards.
This is coming nine months after the country's apex bank was notified of a possible eviction from the J.P Morgan Government Bond Index – Emerging Markets indices. The order, according to the host financial institution will be effected at the end of September on the grounds of 'lack of liquidity and transparency in the nation's foreign exchange market'.
Based on the new arrangement, all cash transactions will be restructured to stay within a daily maximum of N150,000 while ATM collections are capped at N60,000 per day.
Speaking on the new directive, Ibrahim Muazu, the CBN Director of Corporate Communications explained to correspondents from leading national dailies saying that "the basic thrust of the policy on withdrawal limits in foreign transactions was to curb abuse of the exchange system while preventing people from trading with their ATMs abroad which eats into the country's foreign reserve."
While financial ecosystem adjusts to the new model, stakeholders within the e-commerce sector are of the opinion that this move will drive the modernization of payment system in line with Nigeria's vision 2020 goal of being amongst the top 20 economies by the year 2020.
Marek Zmyslowski, Managing Director of Jovago Nigeria, while highlighting the benefit of the new rule says, "In all leading economies, an efficient and contemporary payment system is positively correlated with development, and is a key enabler for commercial growth.
"So if we have more people engaging in transactions via the internet, it will expand customer's ability to make easier purchases on quality products and services online and then drive companies who function within this space to deploy state-of-the-art technology and security measures to support the increase in patronage. As oil struggles to make a comeback, this is something our economy needs right now," he said.
On the backdrop of CBN's measures in combating abstract demands for foreign currencies, domestic banks have responded with a line of submissions which also restrict the volume of fiscal trade permissible on electronic payment cards.
With the adoption of the limits on withdrawals still in its early stage, venture capitalists are hopeful on the impact of the new structure on the economy.