In many countries around the world, it appears as though cash is on the way out. Indeed, in New Zealand, the use of paper and coins is declining rapidly, with 40 percent of people now using this form of money regularly. That’s down from 96 percent in 2019. Nigeria appears to be way behind the west in terms of advanced payment systems, and most people in the country value cash above all else.
In fact, Nigeria was ranked 124th in a list of 137 countries ranked for credit card penetration. Only around three percent of the population owns a credit card. If Nigeria is to keep pace with the rest of the world, the people here will need to start moving away from cash soon. There are various catalysts that could help them to do so.
The Current State of Cash Usage in Nigeria
Plenty of research has gone into the use of cash in Nigeria, with some interesting findings. According to a survey conducted by the Central Bank of Nigeria in 2020, 96.8 percent of adult Nigerians use cash as their primary payment method. Only 39.7 percent of people in the country have a bank account, while 6.4 percent of the total population uses mobile money. It’s fair to say that cash is king, and it may be hard to get people here to change the way they think about traditional money.
There are various risks associated with an overreliance on cash, and countries around the world are waking up to the idea that more modern solutions are required. Cash transactions can be easily lost or stolen, and they are harder to trace as well. In addition to that, cash-based transactions can be inefficient and time-consuming, particularly for businesses. Cash can also lead to financial exclusion for people who don’t have access to banking services or digital payment methods. It’s clear that Nigeria needs to start looking toward the future.
The Role of the Internet
There’s a high chance that the increase in internet availability in Nigeria will have an impact on the rise of digital payment methods. The country has been at the forefront of internet adoption in Africa, and now more than 50 percent of people in the country have access to the online world. Nigeria is the leading nation in the continent in the number of people it has online, and this progression is set to continue over the next decade.
As more people find themselves able to access the internet, there will be a boom in the e-commerce and entertainment industries in the country. When users interact with these services, they will quickly realize that digital payment methods are superior, just as people did in the western world. It’s clear from looking at countries like New Zealand that people now value ease of transaction highly when choosing a site to use. For example, there are now sites that recommend the fastest payout online casino in the country, and these are listed based on the payment and withdrawal methods they accept. Players can also choose them based on other factors such as the bonuses available.
Nigerians who use the internet should soon grow accustomed to the advantages that mobile payments bring. It could spark a digital revolution in the more rural areas of the country as well, as it will be easier to use online payment methods in these places than it would be to travel to a bank. Mobile money services have become increasingly popular in Nigeria in recent years, with providers like Paga and Opay expanding their offerings.
The Potential of Cryptocurrency
The internet will introduce Nigerians to several digital payment options, including companies like PayPal and Skrill. There’s also a chance that cryptocurrencies could have a major impact on the economy here in the future. While still in its infancy in Nigeria, cryptocurrency has the potential to revolutionize the way people make payments and conduct financial transactions.
The fact that many Nigerians refuse to get credit cards suggests that they may not trust traditional banking systems. This is where cryptocurrency could find a lot of uptakes, as it is decentralized and exists outside of banks. This makes it a particularly attractive option for people who lack access to banks or who distrust traditional financial institutions.
In recent years, Nigeria has seen a surge in cryptocurrency adoption, with a growing number of Nigerians using platforms like Binance, Luno, and Quidax to buy and sell cryptocurrencies. Some experts believe that cryptocurrency could help to promote financial inclusion in Nigeria, as it allows people to conduct transactions without needing a bank account.
It’s clear that there are numerous risks associated with Nigeria’s reliance on cash, and the country needs to start moving towards more modern payment methods. The spread of the internet will be key to achieving this, as it will introduce people to a vast range of technological solutions.
