Technology is making mincemeat of the traditional ways and allowing people to imagine what before now could seem impossible. Many years ago, not carrying physical cash and walking into a shopping mall to buy something was unthinkable but fast-forward to 2016, the cashier thinks you are not ‘cool’ for not swiping a debit or credit card.
Visa, Mastercard, Interswitch, Paypal, Apple Pay, among others are some of the innovative ways of using money that are threatening the existence of physical cash.
Twinpine Network’s Nigeria Mobile Trends Report for 2016 shows the growing attractiveness of the mobile payment platforms. According to the report, 34.1 percent Nigerians send money via Shortcode (*737# et al), while 34.6 percent send money via their Bank apps. Only 6.2 percent are using a money solution like Paga, Etranzact’s Pocketmoni, and 35.1 percent have not transferred money before. Interestingly, 4 percent of mobile transactions in Nigeria go towards paying tithes and offerings in Church.
The growth of ecommerce in Nigeria has also been lauded by experts as phenomenal with some projecting the industry will reach a valuation of USD10 billion in the years ahead.
Such projections have somehow found their way into predictions of the demise of cash – physical money. John Cryan, CEO of Deutsche Bank AG, had predicted in January 2016 that cash will not exist in the next ten years. Cash, he said, is inefficient and expensive. Cryan believed that fintech was a possible substitute to replace fiat money. Cryptocurrencies like Bitcoin, is also believed, will sound the eventual death knells.
From every indication, ATM machines are going to increase and cities, which are yet to be covered in the country, will be covered. Easier, faster and cheaper ways of sending money to your loved ones are going to be rampant in the near future. But should you get to the point where you have to go a museum to see a naira note?
David Stearns, professor of money and technology at the University of Washington does not think the demise of money is likely in the near future. Assuming credit card penetration increases and is sustained in the near future, there are still businesses and individuals that will be reluctant to fully adopt the model.
For one, the use of credit cards to facilitate payments may be easy and faster, however it is not cheaper. Accepting credit cards can cost a business up to 4 percent in one transaction. Mobile payments like Apple, an expert noted, can be just as expensive for a business.
Another reason is cash is essentially untraceable, it is easy to carry, it is widely accepted and reliable. The latter part is something many people in Nigeria can well relate to. If the power goes out, or there is a blip in the electronic systems that make online commerce world go round, cash becomes your best friend. People store up cash as a safety net and for emergencies.
Experts also note that cash is more than just a way to pay for stuff; it is how people project themselves to the rest of the world. There are sentiments attached to physical carrying of money.
Remarkably, Ben Dyson and Graham Hodgson authors of “Digital Cash: Why central banks should start issuing electronic money”, who also popularised the notion of an impending “death of cash” noted additionally that “Notes and coins are going to be around for at least another 30 years or so – as long as people keep using them.”
FRANK ELEANYA
