Top 5 Alternative Modes of Making Payments in Nigeria Apart from Cash

The Central Bank of Nigeria released a circular to banks yesterday detailing a new policy that revises the cash withdrawal limits allowed for customers.

According to the new policy which shall take effect from January 9th 2023, over the counter withdrawals by individuals and corporate organizations have been limited to ₦100,000 and ₦500,000 respectively, weekly. "Withdrawals above these limits will attract processing fees of 5% and 10% respectively", says the circular. 

Similarly, ATM withdrawals have been limited to only ₦100,000 weekly and ₦20,000 daily, and only ₦200 denominations or lower can now be loaded into ATM machines by banks. 

In addition, POS withdrawals have also been limited to only ₦20,000 daily. 

This means that starting on January 9th 2023 when the new policy will take effect, the average Nigerian will only be able to withdraw and hold a maximum of ₦60,000 cash daily or ₦140,000 cash weekly, if they decide to withdraw via OTC, ATM and POS modes within the same day. 

Clearly, I like this policy. It is aimed at controlling the amount of physical cash in circulation, and encouraging the use of digital modes of payment within the country. This is aimed at advancing the cashless policy of the CBN—a policy that the apex regulator has been advocating and advancing for about a decade now, since it was first introduced in 2012 by then-CBN Governor Sanusi Lamido Sanusi under the Goodluck Jonathan presidency. 

On a daily basis, people often have to pay for transportation, food, petrol and call cards. Businesses often have to pay for other utilities in addition to some of the above.

If these were the only things that Nigerians often have to pay for, then daily cash of about ₦40,000 would be more than enough, even for a lot of high-income earners. But, it is not so, because on a daily basis, a lot of commerce goes on in Nigeria that sees thousands of naira exchanging hands among people and business, as well as business-to-business too. 

Most of these transactions are best carried out via digital media like phones, smartphones and the internet. According to the Nigerian Communications Commission (NCC), there were about 195 million telephone subscribers (both simple and smart phones) in Nigeria as at December 2021. Similarly, Statista put the number of mobile internet users (smartphones only) at about 81 million in the same year. So, clearly, there is a huge population of people living in Nigeria who have and use mobile phones and the internet. 

Whether it is an e-commerce payment, utility bill payment, online course or product that you need to pay for in Nigeria, there are multiple digital payment options that are available to you as a phone user. 

So, I have compiled a short list of the top 5 digital modes of payment which are great alternatives to paying with cash in Nigeria. Full disclosure: I use all of them. 

Mobile Banking Services

Every deposit money bank in Nigeria offers mobile banking services. There are two main forms of mobile banking service: mobile apps and USSD code. Mobile apps require a smartphone and internet connection in order to use them, but USSD codes do not require internet connection, only telephone service availability. 

For those who use a smartphone, you can use both forms to transfer money to any bank account in Nigeria within seconds. Call or visit your bank's customer service section and find out the name of their mobile app. Then proceed to Google Play Store or the Apple Store on your phone to download and set it up for your use. 

Similarly, if you use a simple phone, you can make use of your bank's USSD code to make money transfers to any bank in Nigeria without an internet connection.

See a list of the mobile app names, app store links, and USSD codes for all deposit money banks and some popular microfinance banks here.

Internet Banking and Payment Services

You can use your debit or credit cards, as well as banking PINs or tokens to carryout banking transactions from the comfort of your home, office or other locations. You will only need a smart device such as a smartphone or computer with a stable internet connection.

All deposit money banks and some microfinance banks offer internet banking services. There are also payment service providers who facilitate payments from one bank to another. Some popular licensed ones include Flutterwave, Paystack, Quickteller, Interswitch, Remita, and other mobile app-based fintech products like Chipper Cash, Barter, Opay, etc (you can find them on your app store). 

You can make e-commerce payments and other online payments through any of these channels if your merchant supports any. Typically, you will need to input your debit or credit card details in order to make payment. 

Note: Please ensure that you trust the website before inputting your card details, in order to avoid the risk of fraud. 

E-Naira Wallet

In my opinion, E-naira is currently the fastest digital mode for making naira payments in Nigeria—second only to making physical cash payments. In less than 5 seconds, payments can be concluded. And all you have to do in order to make payment is to scan a QR code from your E-naira wallet, or enter the username and password of your E-naira wallet.

Here's how you can set it up:

1. Download the E-naira Speed Wallet app from Play Store or Apple Store.

2. Open the app and create an account by providing your personal information. 

3. That's all. Your wallet is set up. Now, you can send or receive E-naira to or from other E-naira wallet users, any bank, or mobile money service. 

In order to use E-naira, you will need a smartphone with stable internet connection. 

Cash-in App

Cash-in App is an instant crypto-to-naira off-ramp service. It automatically sends the naira equivalent of crypto to the recipient's bank account. It's the fastest way to spend crypto easily in naira. It's very fast, so easy to use, and does not charge any transaction fees.

Cash-in App is the perfect tool for crypto natives who do not want to hold money in Naira, but in crypto. You can convert your crypto into naira sent to your bank account, and then spend from there. Also, both buyers and sellers can use Cash-in App to make or receive payments in naira, using crypto as the vehicle.

Here's how Cash-in App works:

1. Download the app from Play Store or Apple Store.

2. Set up the app by providing your bank account number and personal information.

3. That's all. Once crypto is sent to your Cash-in address, you'll get its naira equivalent straight in your bank account instantly. 

Note: The recipient never receives crypto, but instead receives the naira equivalent of the crypto amount sent to his/her Cash-in address. 

POS Machines

Point Of Sale (POS) machines provide a very seamless way to execute cashless transactions when you go to shops, supermarkets, malls, and roadside merchants.

All you have to do is swipe or plug your debit or credit card on the machine and enter details of the amount to be paid. The money will be deducted from your bank account and credited to the seller's bank account. 

Note: This mode of payment can only be used if you have a debit or credit card.

On a final note, I'd like to warn that while digital modes of payment are great and represent the future of payments, they also come with attendant risks. Ensure that you always protect your passwords, PIN codes, tokens, debit or credit card data, and other sensitive information, in order to safeguard your funds from possible loss due to fraud. Never trust anyone but yourself with your passcodes.

Paul Anunaso is a writer, digital business enthusiast, and engineer based in Lagos, Nigeria. He is the editor of The Paul Anunaso Blog, and can be reached at thepaulanunasoblog@gmail.com