Buzz from Hera

The CBN recently introduced a new policy for cash withdrawals to aid the acceleration of cashless transactions in the coming year. The new policy, which came on the heels of its recent currency redesign project, caps weekly withdrawals at N100,000 and N500,000 for individuals and corporates, respectively. The cash withdrawal limit is set to take effect from January 2023 and aims to check excess liquidity while deepening financial inclusion in the country.
As with any new policy, there will be ripple effects on the socioeconomic landscape. By limiting cash withdrawals, individuals and businesses will have to speedily adjust toward alternative payment methods such as internet banking, USSD, ATMs, POS and QR payments for daily transactions.

*Here are FIVE predictions about the effect of this cash-less policy on small businesses in the coming year:*
1. A rocky start:
2. Innovative digital payment options to become more accessible:
3. A rise in more profitable SMEs
4. Expansion to new markets
5. Taxes and remittances:
The benefits of a cashless economy cannot be over emphasized and outweigh its shortcomings. Such a policy impedes excess liquidity and reduces crimes associated with cash. It exposes people to the simplicity and speed of digital payments versus the cost and risk of handling cash. However, for a cashless economy to work seamlessly in Nigeria, a simple payment infrastructure tailored to Nigeria’s largely uneducated society will be required to aid steady adoption.