On e-banking, electronic money, eNaira and fees
It can be said that the entire globe is now an e-world and that the inhabitants are e-humans. This is because most human beings live in the electronic world and survive as electronically controlled human beings. The few who are exempt are in remote villages. As the concept of globalization gained momentum in the 1970s and the automation of workplaces advanced, many academics – including yours – labor leaders and people with a socialist bent vehemently opposed the development. The argument centered on the loss of jobs and the promotion of labor unemployment. With protests, in writing, at seminars, conferences and in the media, globalization has progressed. It was a mass movement that did not recognize the protests but was ready to leave behind those who did not want to meet. Today, the world has become a global village, involving everyone. Even a previously reluctant group of people now appreciate innovation in information and telecommunications technology.
I remember the days when landlines were the order of the day. The workers of Nigerian Telecommunications Limited were lords. You have to beg them, tip them, or bribe them to get your line busy. We used to carry ladders from their offices to our homes to repair phone lines with the aftermath of having a damaged car on the bumpy roads that remain typical of the Nigerian landscape. The alternative would be to queue for hours at NITEL phone booths or offices to make calls of less than five minutes with other people overhearing your conversation. The phone revolution has been a game-changer as cell phones have gone from the big “zero-nine-zero” or “node-nine” and not-too-affordable Nokia 3310s to affordable slim or pocket-sized Oppos, Nokia, Samsung and others. . The NITEL trauma is gone forever. I remember that I was locked out by a NITEL manager for saying “the customer is king”. I have since forgiven him because the telephone revolution taught him a lesson in humility. One can only pray that the next revolution moves sooner than expected, to the electricity sector in Nigeria.
At the start of COVID-19, there were innuendos that the whole episode was related to the installation of 5G technology which will eventually control our brains by inserting or transplanting some sort of SIM card into our skin. The discussion even took on a spiritual dimension in Nigeria where religion and evil acts go in the same direction. The 5G installation is taking place underground, unnoticed and by the time it resurfaces we could be caught off guard. But it will advance electronic life, cause electronic panic, and may consolidate electronic well-being or worsen electronic poverty. When the Central Bank of Nigeria recently launched eNaira, I was wondering what kind of money we collect at the ATM in Nigeria or what kind of currency we use for online transfers within and between banks or the currency of payment via the point of sale -machines. But that’s the nature of electronic transactions. It’s hard to figure everything out every time, because as you try to unravel the mystery of one invention another is emerging.
What is the added value of eNaira to existing online banking? The CBN has given hope to those who send money home in the form of remittances and to those whose banks are not available in their neighborhood, perhaps the rural ones. That as soon as they can transfer money into their eNaira app from anywhere or any bank in the world, they are richer by that amount which they can cash out without delay. That is, those who want to receive and those who want to send money via eNaira must have the app. But this is where the problems of continued enjoyment of innovation begin. Questions relating to infrastructures such as network or wireless transmission technologies, multimedia applications, database management, Internet service providers, the computer interface or even electricity, among others, pose a problem. in Nigeria. In which of these areas do we have expertise as a nation and in which do we hope to overcome the difficulties that arise very soon? This implies that these innovations are not without costs, with a large part of the costs being passed on to customers. Using e-banking in Nigeria seems more expensive for customers than collecting money over the counter in terms of the deductions that banks and government take from personal accounts. Banks have developed various means of “extorting” money from customers who most of the time feel miserable.
The fact that one can perform all payment transactions without the prying eyes of other customers or having to queue endlessly in a banking room is beneficial and a great appreciation for the adoption of technological advancements in the financial system. . However, Nigeria is a market of sellers or service providers rather than a market of consumers. People who have lived abroad temporarily or permanently, including in South Africa, would tell you that online banking is the best thing that has happened as a compelling innovation for the financial system. Banks, customers and even supervisors of banks like the central bank, reserve bank or county bank are all beneficiaries and not victims of e-banking technology as is the case in Nigeria.
In these climates, one can use the ATM machine at any bank machine multiple times and anywhere without penalty. Not in Nigeria. If you use your card at another bank’s ATM in Nigeria, the deduction begins after three such withdrawals within one month. Most Nigerian banks have manipulated their ATMs so that they can recognize “foreign cards” and a customer cannot withdraw more than N10,000 with such a card in a single transaction. Thus, if you withdraw 40,000 N, you start to pay a penalty from the fourth withdrawal until the end of the month. The banks themselves know that the services on their machines are spotty due to inefficient infrastructure which is not the fault of the customers. Apart from that, banks charge customers for texting to greet them on birthdays, Christmas, Ed-el-Kabir, Maulud Nabiyyi or other similar festivities. Some banks also charge transfers from one customer to another customer within the same bank! At the end of a month, the customer pays VAT, maintenance, and other miscellaneous charges outside of the federal government stamp duty of N50, charged as payments for transactions greater than a specified amount. All these costs, financial and physical, are reflected in the queues that we still see in the lobbies of many banks and at the various ATMs. This keeps Nigeria as a currency carrying economy. Workers go to banks to collect their wages immediately at the counter or at ATM sites to avoid unnecessary fees or inefficiency caused by poor infrastructure. So, many people wonder if eNaira will solve these problems or at what cost to banking users? There are other issues of concern to financial illiteracy regarding e-banking in general and eNaira in particular.
In a class on money and banking, the students asked me the following questions: “If my mother with the eNaira application already installed for her, lives in our village with a bank nearby and I send the money to its application, how does it get the money even if it goes to a bank but does not have an account in that bank?
“If I normally get dollars in my home account from my brother in the US, but now want to receive them on my eNaira app since the CBN has stated that it can facilitate remittances, will be- can I collect dollars with my eNaira account? ”
“Since I can transfer money from my account to a friend’s account in another bank without having the app from that bank, what advantage does the eNaira app have over such direct transactions? ? ”
“What are the benefits that will accrue to CBN for people who use the app or for people who use the e-Naira app?” ”
“Who pays or how much do I have to pay if I transfer money from my bank account to the eNaira account for transactions?” ”
The only question I was able to answer with any level of conviction was “Does CBN compete with the banks it is supposed to monitor and control through the introduction of the e-Naira”? My response was that eNaira was introduced to encourage banks to be competitive innovators. CBN should forgive me if I messed up. But other issues raised are set out here for CBN’s response in its advertisements going forward.
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