The Cashless Payment System as a Panacea to the National Security Challenges in Nigeria

Abstract

The aim of this paper was to ascertain the extent to which electronic payment in all its ramifications and intensities could impact on the systemic cashless economy in Nigeria, on the one hand, and the great potential of recovery of National Security from its current state of implicit and reckless collapse, on the other hand. Before the advent of modern banking system, banking operation was manually done which led to a slowdown in settlement of transactions. This manual system involves posting transactions from one ledger to another with human hands into designated folio in appropriate accounting record book. This study examines electronic management of funds movement in both local and international payments; transfers for both legal and illegal purposes. All sorts of illegality in financial and economic activities are carried out by the use of physical cash. Terrorists, money launderers, Fraudsters, Armed robbers, Drug peddlers Revenue generation fraudsters, corrupt politicians and civil servants, cyber criminals,and Bank thieves are all economic saboteurs and constituents of the dynamics of national insecurity. All these are pilferers of government resources and prefer executing their dastardly acts using cash transactions.

The new policy by Central Bank of Nigeria (CBN) of cashless system of payment has raised a lot of concern on the growth of the Nigerian economy, with the objective of reducing high cost of cash processing and improving financial intermediation, facilitating an efficient payment system, while at the same time solving the critical challenges of National Security enabled by the use cash by economic saboteurs.

Both descriptive and quantitative research techniques was employed to carry out this study. The study indicates that the electronic system of payment has a great implication for the success of the cashless economy and a facilitation of the recovery of the fragile dimensions of National Security in Nigeria. The successes so imagined from the impact of electronic modes of payment of the systemic cashless policy and the recovery of National Security from its current state of decadence will only be realizable if the implementation of the Central Bank of Nigeria’s Cashless Policy can also recover from its present state of failure and lack of focus.

Consequently, the authors concluded that the cashless system of payment will enhance the development of the e-payment system and therefore recommend amongst other things the need for proper implementation of a risked based information security strategy for both financial and non-financial institutions in the Nigerian economy.

Keywords: Cashless Payment System, Security, Challenges, Economy, E-Payment