Beyond Nigeria's Cashless Policy: Implications for Commercial Transport Operators
Recent events by the
Central Bank of Nigeria (CBN) have created uncertainty for businesses
especially those that are yet to digitalise their operations. The issuance of
new currency and most recently the cashless policy issued by the CBN that
restricts cash withdrawals and transactions has caught a lot of businesses
At Bus54, we have put
together this guide to help you understand how the cashless policy impacts on
the transportation industry and the opportunities for transport operators in
Nigeria to make a shift to digitally manage their end-to-end operations.
As a reminder, here
is a summary of the directive by the Central Bank to all Deposit Money Banks
(DMBS), Payment Service Banks (PSBs), Primary Mortgage Banks (PMBs), and
Microfinance Banks (MFBs):
The maximum cash withdrawal over the counter
(OTC) by individuals and corporate organizations per week shall henceforth be
N100,000 and N500,000 respectively. Withdrawals above these limits shall
attract processing fees of 5% and 10%, respectively.
Third-party cheques above N50,000
shall not be eligible for payment over the counter, while extant limits of
N10,000,000 on clearing cheques still subsist.
The maximum cash withdrawal per
week via Automated Teller Machine (ATM) shall be N100,000 subject to a maximum
of N20,000 cash withdrawal per day.
Only denominations of N200 and below shall be
loaded into the ATMs. The maximum cash withdrawal via point of sale (PoS)
terminal shall be N20,000 daily.
In compelling circumstances, not exceeding once
a month, where cash withdrawals above the prescribed limits are required for
legitimate purposes, such cash withdrawals shall not exceed N5,000,000.00 and
N10,000,000.00 for individuals and corporate organisations, respectively.
The CBN encouraged
customers to use alternative channels (internet banking, mobile banking apps,
USSD, cards/PoS, eNaira, etc.) to conduct their banking transactions.
Businesses now need to fast-track their
transition to cashless payments, which could completely transform a business,
especially those of commercial transport operators. With a cashless system,
transport operators can more easily and securely accept electronic payments
from customers, which gives them more insight into their business that can be
used to drive sales and grow their business. Additionally, the cashless policy will reduce the amount
of time and money that transport operators spend on managing and safeguarding
cash, allowing them to focus on delighting their passengers and improving
Some of the benefits of the cashless policy for
transport operators are:
transaction efficiency: The cashless policy will enable transport operators
to process transactions more efficiently, reducing the need for handling cash
and reducing the risk of fraud, loss, or theft.
Operational efficiency: Going cashless improves service efficiency by reducing queues at bus terminals.
Passengers only need to book online and show their e-tickets at their departure
point, meaning reduced waiting time to find out the fare, wait for their
change, or get their luggage loaded
up. By reducing these queues at bus terminals, services can run much smoother
with minimal delay.
Increased adoption of financial services: The cashless policy
will drive transport operators to seek value-adding financial
services which will enable them to operate seamlessly whilst also reducing
risks to operation. This could spur improvements in offerings to transport
operators, with additional benefits of competitive offerings from
Increased competition among operators: The cashless policy
will increase competition among transport
operators. With passengers increasingly seeking a great booking experience, operators that have already made the shift to digital will
have a competitive advantage over those that do not.
Risks of the Cashless policy to
cashless policy may increase costs for transport operators, as they will need
to invest in new technology and infrastructure to support digital transactions.
There is a risk to operators around disruptions in accepting cash bookings
while they transition to a digital platform. This coupled with the inability of
passengers to access enough cash for payment may lead to loss of customers and
poor booking experience.
reliance on technology: The cashless policy will also increase
reliance on technology for transport operators, which may be a challenge for
those that are not familiar with technology or have limited access to it.
How Bus54 Is Supporting Transport
Operators to make the transition to Digital Services
Bus54 has developed a platform that provides payment integration and an interface that
enables transport operators to manage their operations from a secure portal.
Here is what you get when you are a Bus54
Cost-free, quick integration which means you can start selling your tickets online on our
platform in as little as 48 hours.
Multiple payment options are
already integrated so your customers can choose a payment method they are
entire operations from a secure portal with no need for
additional investment in IT software or hardware.
A new channel to increase your
ticket sales. This applies even if you have an existing website.
A further benefit of
transport operators moving to Bus54 is that they can accept bookings days in
advance which is good for cash flow and allows them to plan ahead e.g., fueling
their buses a day before the journey which will result in on-time departure.
Go to https://partner.bus-54.com/ to
find out how Bus54 can support you to implement seamless cashless operations
for your transportation business.