I was on my way to the office the
other day when I noticed that my car was running very low on fuel. I then
decided to buy some Premium Motor Spirit (PMS aka Petrol) at the nearest petrol
station along the way.
I sighted the station of one of
the major fuel distributors and branched off to buy some fuel. When my turn
came, I informed the petrol attendant how much fuel I wanted to buy and that I
wanted to use my ATM card to pay. I then proceeded to open my fuel tank.
The attendant then made one of the most profound statements I have heard in recent
times. Hear him:
‘Oga, we go charge you N50extra if na *PoS you wan use pay o!’
Whaaaatttttttt!!! I exclaimed!
I instantly got a flashback of a
scenario that played out in one of the eateries I went to get some lunch. A
male customer was having an argument with a female cashier at the eatery saying
that he wasn’t going to pay anything extra asides the cost of the food he had bought.
Apparently, the cashier had informed him that he would be charged N50 extra for
using the POS machine. But the customer was having none of her explanations. He
was arguing and shouting at the top of his voice, blatantly refusing to pay the N50 charge.
I came to and asked the fuel
attendant when did ordinary Nigerians start paying to use the POS machine? With
an air of confidence and a sheepish smile on his face, he pointed to a sign displayed in the station (reproduced below), whilst replying me saying:
‘Oga, na since last week o. And na new **CBN policy!’
As I wasn’t with much cash on
that fateful day, I opted to use the POS machine and pay the extra N50 charge.
I drove off from that petrol station questioning the way our Policy and
decision-makers in Nigeria think!
Nigeria is predominantly a cash-based
economy though the Government has been making efforts to drive the economy to a
cashless one. Many policies have been put forth to actualise this drive, the
most recent being the imposition of bank charges on cash deposits and withdrawals
above a certain threshold. This policy which was contained a circular titled “Re:Implementation of Cashless Policy” summarised the applicable charges as:
The economy was still trying to
come to terms with this policy when the CBN released another circular titled
“Review of Process for Merchants Collections on Electronic Transactions” and
dated 17th September 2019. The circular directed all banks to effect the
following changes:
- v unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulators.
- v To review Merchant Service Charge (MSC) downward from 0.75 per cent (capped at N1, 200) to 0.50 per cent (capped at N1, 000).
This Service charge also referred to as the Stamp Duty Charge is being implemented by the banks via the Nigeria Interbank Settlement System (NIBBS).
What a policy somersault!
I'm not an Economist, but simple
reasoning and logic tells me that if as a Government, your goal is to move towards
a cashless society, then your policies and activities should be geared towards
encouraging more people to embrace alternative electronic payment methods whilst
discouraging and maybe penalizing the use of cash.
So whilst the imposition of
charges on cash deposits and withdrawals seem to be in order, I cannot
understand for the life of me, the introduction of charges on electronic and
alternatives to cash payments!!!
What are the implications of all
these big Grammar to the ordinary Nigerian who works hard and manages to earn
N500,000 and wants to keep it in the bank?
If he opts to deposit it cash, he
would be charged
- v N10,000 (or 2%) for cash lodgements
- v N15,000 (or 3%) for cash withdrawal
If he opts for electronic means,
he would be charged
- v N50 for each electronic withdrawal
Imagine he chooses to withdraw in
tranches of N5000 for his daily needs, it implies that he would have to forfeit
N5000 in charges to withdraw or use his own money!
The Government wins either way
while the ordinary Nigerian is at the receiving end of these policies. The long
term impact though would be a loss of faith in government policies and complete apathy to electronic payments systems. The people would return to the ancient method of keeping their cash under their beds.
These are my thoughts on the
imposition of N50 charge on the use of POS and electronic payment platforms in
Nigeria. I would love to hear yours.
Footnotes
* PoS - Point of Sale
*CBN - Central Bank of Nigeria
***Updates***
On Friday 22nd November 2019, in an interview on Channels' TV program Hard Copy hosted by Maupe Ogun-Yusuf, the CBN Governor debunked claims that N50 stamp duty charge was their directive.
While agreeing to the reduction of the Merchant Service Charge from 0.75% to 0.5%, the Governor emphatically said on the program that it did not direct the merchants to pass the charge to their customers.
Read more about it here
The narrative continues to unfold.
***Updates***
On Friday 22nd November 2019, in an interview on Channels' TV program Hard Copy hosted by Maupe Ogun-Yusuf, the CBN Governor debunked claims that N50 stamp duty charge was their directive.
While agreeing to the reduction of the Merchant Service Charge from 0.75% to 0.5%, the Governor emphatically said on the program that it did not direct the merchants to pass the charge to their customers.
Read more about it here
The narrative continues to unfold.
Posts
sebi me i will soon move to Canada. lol. nice write up.
ReplyDeleteLaughing.. There are no charges for using the PoS in Canada, right?
Delete