Plenty ATMs but no POS terminals

More observations from Nigeria….

The CBN has been pushing the idea of cashless banking and transactions recently. The idea is that using cash for everything is costly for everybody involved. Carrying cash from point A to point B, having to print new money to replace worn out money and so on. All together a good idea.

Nigerians seem to be on board too. Everyone seems to have bought into using ATM’s as opposed to walking into a bank. It was actually common to see lines at the ATM. This was true not just in Lagos but everywhere I visited. Now I know it probably has a lot do with trying to avoid the extra charges incurred by going to the counter. Still, Nigerians respond to incentives just like everyone else.

POS terminals on the other were non-existent. ATM’s are important but the terminals are what make cashless living logical. The whole point is to be able to do business completely without having to use cash. Walking to the ATM to withdraw cash to pay someone seems cumbersome if you could just pay them electronically. POS terminals however don’t seem to be that popular. I had to wait until my third day to see the first business actually accepting debit card payments. And just as I expected, it did not work. The network was down that day.

POS terminals probably haven’t taken off in Nigeria because of reliability. There is just no guarantee that they will work when you need them to. If people don’t trust them to work then carrying cash is the smart thing to do. Unless you like awkward situations. I guess the challenge to truly going cashless in Nigeria is solving the “network is down” problem. Hopefully a smart entrepreneur somewhere is thinking really hard about that.

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