Cashless Policy: CBN sets transaction limits, highlights benefits of contactless payments

*The Central Bank of Nigeria has directed banks and other financial institutions to set N15,000 as the transaction limit and N50,000 as daily transaction limit for contactless payments, noting any transactions above the limits will require additional Know Your Customer documentations and authorisations

Alexander Davis | ConsumerConnect

As part of the banking sector regulator’s ongoing effort at providing easy, convenient and efficient cashless options, the Central Bank of Nigeria (CBN) has set N15,000 transaction limit and N50,000 daily transaction limit for contactless payments to consumers of financial products and services.

ConsumerConnect reports contactless payment system is a technology that enables an alternative payment method whereby payment instruments are used without physical contact with the payment channels.

Some Contactless Payments options

The CBN, in a fresh guideline issued to Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs) Tuesday, June 28, 2023, said daily cumulative limit should not exceed N50,000.

However, the Bank noted that transactions above the limit would require additional Know Your Customer (KYC) documentations and authorisations.

Musa I. Jimoh, Director of Payment Systems Management Department at CBN, in a circular dated Tuesday, June 27, 2023, and addressed to banks and OFIs, stated that limits above this target should be transacted using contact-based technology.

How contactless technology payments work

Earlier, Adefuye Adéyemí, Deputy Director, Payment Systems Management Department at CBN, had at a meeting with financial reporters in Calabar, the  Cross River State capital, said the introduction of contactless payment is another tool the Bankers’  Bank would introduce before December 31 this year to mitigate any inconvenience that may arise when the old Naira notes would cease as legal tender in the country.

As regards the benefits of the digital payments initiative, the Bank said: “Contactless technology payments will provide easy, convenient and efficient cashless options for users and create shorter queues at checkout points.

“The instruments that will be used for contactless payment include pre-paid debit and credit cards, stickers, fobs, wearable devices, tokens and mobile electronics devices.”

The Deputy Director of Payment Systems Management Department stated: “An interesting feature of contactless payment is the introduction of Free on Board (FOB).

“In this case the risk of loss shifts from the buyer to seller.

“The contactless payment system is more secure than traditional payment methods, thus giving customers peace of mind.”

The CBN further noted: “It will reduce printing of currency, thus saving the regulator cost of printing and managing currency in circulation; and it reduces spread of contagious diseases during payment due to the lack of contact.”

Kindly Share This Story