The New Normal – Digital Transfers and Remittance in Nigeria

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The impact of the coronavirus pandemic could mark the end of physical cash payments due to hygiene concerns.

The coronavirus pandemic has, in no small way, affected many economies and industries across the world. It has also triggered a massive behavioural change amongst people, from how we interact with colleagues, friends, and family to how we function in general. The impact is also witnessed across the financial services industry, causing a necessary and rapid adjustment in the way we send and receive money.

Many experts predict that these changes will result in a new normal that will persist beyond the end of the pandemic and specifically, could mark the end of physical cash payments due to hygiene concerns. Studies have revealed that the materials that make up most banknotes provide the perfect environment for microbes to settle. Further findings identified the presence of harmful bacteria on banknotes including two life-threatening bacteria that have been linked to superbugs resistant to antibiotics. Research conducted by the London Metropolitan University in the UK showed that pathogens would survive on banknotes for up to 17 days. The World Health Organization (WHO) has suggested that people can get infected with the coronavirus through banknotes without observing proper hygiene, therefore it is widely agreed that at this time payments via digital money transfers are safer options.

Governments across the world have implemented different measures including restriction of movement, gatherings as well as encouraging citizens to adopt alternative money transfer channels. In an interview with the News Agency of Nigeria (NAN), the Director of Corporate Communications at the Central Bank of Nigeria (CBN) advised Nigerians to adopt alternative payment channels such as electronic and digital money transfer methods while limiting the use of cash as much as possible.

To this effect, banks have begun to intensify digital operations in lieu of traditional channels, rapidly increasing their stake in FinTech while many businesses have begun to encourage customers to conduct transactions through available digital platforms. Elsewhere across the world, South Korea’s Central Bank took out of circulation all banknotes for two weeks to restrict the spread of the virus while deep cleaning banknotes at high temperatures and ultraviolet light. The British Retail Consortium announced that the contactless payment limits have increased from GBP 30 to GBP 45 and is now being implemented by its members.

Prior to the spread of the virus, governments in Africa had introduced measures and policies to increase the use of digital money transfer technology. In Nigeria, the CBN announced in September 2019 that its cashless policy will take effect on April 1 2020. This amongst other policies will only continue to encourage users to embrace digital transaction channels and increase the number of financially included adults in the country. Development partners including the Bill and Melinda Gates Foundation and the African Development Bank (AFDB) have also been supporting electronic and digital financial inclusion across Nigeria and the rest of Africa. AFDB launched its Digital Financial Inclusion Facility last year with the intention of boosting digital financial inclusion across the continent.


Digital services are having a transformative impact on low-income households, as they provide a path to greater financial security and prosperity. We have continued to see an increase in digital transfers, as social distancing measures are encouraging people to use digital transfer methods – mobile money, bank transfer, and digital airtime top-ups. This method is cost-effective, saving money that can potentially be added to what the recipient receives, convenient for both sender and receiver, and provides a safe and hygienic alternative to carrying physical cash.

The GSM Association’s (GSMA) 2019 report indicates that mobile money use in Africa already showed strong growth indices. The continent’s mobile money accounts had exceeded $1 billion, with West Africa leading the charge. Deposit Money Banks (DMBs) also recorded a rise in e-payment earnings in Nigeria during the same period, which was also estimated to increase. These are all indicative of the substantial potential for growth in the industry even as COVID-19 causes people to explore digital payment channels.

No doubt, remittances have contributed significantly to Nigeria’s Gross Domestic Product (GDP) and has served as a source of income for many to support household, education and health bills amongst others. It is therefore important that this flow is not disrupted significantly. There is no better time than now to increase the awareness of these digital channels and encourage people to utilize them. Financial services and digital remittance organizations have continued to provide support to the digital transfer advocacy movement by offering different ways for friends and family to send money to loved ones across different borders.

Whilst the coronavirus pandemic has led to the era of social distancing, it has also increased awareness about the many advantages of digital technology. As ever, we encourage Nigerians to continue to follow government advice and guidelines from the World Health Organisation (WHO) whilst observing safety measures including keeping mobile devices clean.



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