By Adedotun Ajayi.

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The aftermath of the cash crunch in Nigeria recorded a huge losses by businesses and a significant impact on the PoS (Point of Sale) business. It is possible that the affected industries remain the same?

Nigeria experienced cash crunch from the last quarter of 2022 to the first quarter of 2023. During this time, there was a surge in demand for electronic payment systems, such as PoS terminals, as people looked for alternative ways to make transactions. This increased demand led to a temporary boost in the PoS business, as more merchants and businesses sought to adopt this technology.

However, the long-term impact on the PoS industry in Nigeria will depend on several factors. One crucial factor is whether the cash crunch leads to a permanent shift in consumer behavior towards electronic payments or not.

Central Bank of Nigeria (CBN) had last year October announced it would be redesigning the N200, N500 and N1,000 notes. The new notes were introduced into the system on December 15, 2022, with the CBN initially setting January 31, 2023 as legal tender deadline for the old notes being rested.

Meanwhile, about six weeks after the CBN first announced that it would be redesigning some of the naira notes, the apex bank directed that deposit money banks and other financial institutions should ensure that over-the-counter (OTC) cash withdrawals by individuals and corporate organisations did not exceed N100,000 and N500,000 respectively. The bank also pegged maximum cash withdrawal per week through the Automated Teller Machines (ATM) at N100,000, subject to a maximum of N20,000 cash withdrawal per day.

Unfortunately, when the new notes were released, members of the public could not access them. The January 31 deadline for the old notes to cease to be legal tender was approaching, yet there were more old notes in circulation than the new ones. Even in the last week of January, commercial banks were still giving out more of old notes than new notes to customers.

One of the reasons the CBN gave for its naira redesign decision was its resolve to strengthen Nigeria’s cashless economy.

But the policy brought so much agony to individuals, families and businesses. No wonder, there were agitations from various quarters against the policy.

No doubt, the redesign of the naira notes, coupled with the restriction on cash withdrawal made life difficult for Nigerians – civil servants, business people and others. People were no longer able to access cash, due to the aftermath of the novel CBN policies. Point of sale (POS) operators were charging customers 20 to 25 percent for every withdrawal made; ATMs were not dispensing up to what people needed. Even the bank officials were also not dispensing much money over-the-counter.

Banks and ATM stands were filled to the brim with people who needed money but could not get their own money from the bank. The media were full of stories of people who died during this unpleasant period because they were unable to get the money they needed at the time they needed it.

Unfortunately, the unholy practices of PoS operators compounded the problem. People could not withdraw up to the amount they needed. Sometimes PoS would not give more than N2,000 to customers, irrespective of how much they needed. The charges were also exorbitant – 20 to 25 percent for every withdrawal made.

The Nigeria Inter-Bank Settlement System (NIBBS) data states that POS transactions increased to N807.16 billion in January 2023 because of the naira redesign policy and cash crisis. POS transactions rose to 40.68 percent year-on-year from N573.72 billion in January 2023. Total cashless transactions in Nigeria increased by 45.41 percent year-on-year to N39,58 trillion in January 2023.

Consequently, the grievance of the people was not against the government alone, but also against POS operators who seemed to be part of the conspiracy to make life difficult for them.

Already, some people had vowed not to patronize pos again, because of their experience back then. Such people have vowed that they would explore other options, to avenge the supposed exploitation they suffered in the hands of the operators.

With the experiences people had during cash crunch, what’s the possibility of the POS industry retaining its strong hold in the society.

According to Joseph Obarise, a publisher, in his submission.

“My experience then was very terrible. Sometimes they would say that there was no cash. At times, the POS operators would peg the amount they could give at N2,000 or N5,000, irrespective of how much one needed. To make matters worse, they charged 20 to 25 percent for withdrawals. So, one would withdraw N5,000 with N1,000 and so on.

Unfortunately, I am still patronizing them because I don’t want to subject myself to the stress of bank or ATM queue” he reacted

On the contrary, Mr Olumide Azeez said he can never forgive POS operators in this life or the next. According to him;

“I remember vividly then, I withdrew N7000 and paid N9,100 at a POS stand near a filling Station in Akure here. I was very sure it was the filling station that gave them cash for business. They charged N300 per N1,000. That was inhuman. After the whole cash crush palaver, I have decided not to ever patronize any POS operator again.

And for this present administration’s incompetence, it should be studied in universities by generations yet unborn, a dark era when Nigerians suffered beyond imaginable reasons and used their naira to buy naira. History will never forget” he lamented

Kemisola Adesida, a POS operator around FUTA South Gate said customers are yet to start patronizing them as it was during and before the cash crunch.

According to her; “During the cash crunch, some POS operators must have offended a lot of people, because business has not been the same after the cash crunch. There’s low patronage. We apologize to all Nigerians if we have offended anybody during those trying times. Anything that was done back then was never intentional. This is the only business my family and I feed on,” she begged.