The Country Manager of Visa Nigeria, Mr. Emezino Afiegbe has decried the huge loss trailing use of cash in transacting businesses in Nigeria and called on business operators to dump high cash culture and embrace digital payment platforms.
In an interview, he said “Cash is costly to businesses, too. According to the report, businesses, on average, spend an equivalent of two per cent of their monthly revenue accepting non-digital payments. Businesses spend an average of 68 hours per week managing cash, and lose about an equivalent of four per cent (around nine per cent in Lagos) of their revenue per month to theft, counterfeit money, and cash register shortages”.
Continuing, Afiegbe averred that “Labour cost savings and a strengthened bottom line are just two of the ways in which firms may stand to benefit from increased digital payments usage. Roubini ThoughtLab’s research found revenues can increase an average of 17 per cent when businesses begin accepting digital payments”.
“For governments, tax evasion and crime are often the biggest costs of cash. The widespread adoption of digital payments may reduce crime and cut costs related to the handling of administrative tasks, running public transit and toll roads, and administering criminal justice. Equally important, moving away from cash increases tax revenue thanks to a reduction in the informal economy.
The Visa Nigeria boss noted further that “On average, governments of the cities the report studied could expect to save close to $710m a year in administrative costs by making greater use of digital payments. A reduction in crime can potentially save the cities studied an additional $53m per year on average”.
Giving more insights on benefits of digital payments in businesses, Afiegbe agreed that “As cities increase their use of digital payments, the positive impacts extend beyond financial benefits to consumers, businesses, and government. The shift to digital payments also may have a catalytic effect on the city’s overall economic performance, including GDP, employment, wage, and productivity growth”.
“Available data suggests that combination of greater economic activity, lower crime and greater ease of living could make cities with increasing rates of digital payments more attractive to businesses, talent, and tourists.
He submitted that “There is the need to undertake targeted financial literacy programmes to help bring the unbanked into the banking system and offer secure digital payment solutions for government benefits to those that do not have bank cards; support innovative approaches to risk management; ensure that digital payments are a key component to all “smart city” plans and strategies; implement secure open-loop payment systems across all transportation networks; and have a technology and innovation strategy and make secure digital payments an integral component of it”.
“From mobile payments using scanned codes to credit card transactions using biometric authentication, digital payments are now everywhere around us. With billions of connected devices such as watches, cars and fitness trackers now a part of our everyday lives, connectivity is only going to become more ubiquitous.
VISA Nigeria country manager made it clear that as communities and cities become less reliant on cash and better equipped to offer fully digital payment experiences, outdoor markets like the one in Lagos, and the shoppers who frequent them may not only become safer and more efficient, they could also strengthen their contribution to the global economy. This is the true power of digital payments.