On 1st January, 2012, Nigeria commenced the implementation of cashless policy, with the kick-off in Lagos State. By the end of that year it was evident the implementation could not be extended to other states of the federation, as earlier scheduled. This raised a crucial question: was Nigeria prepared in the first place, in terms of availability of needed infrastructures, to commence implementation of the cashless economy? This study seeks to answer this question. In addition, it identifies potential consequences of implementation on the security of the nation's cyberspace. Both primary and secondary data were collected. Our findings reveal that when the implementation of the cashless policy kicked-off, awareness, required infrastructures, and the security of the country's cyberspace were inadequate. We suggest that the consequences of implementing cashless policy in Nigeria will have various security effects on the Nigerian cyberspace if the level of awareness and existing infrastructures are not improved. • Information systems ➝Information systems application ➝Web applications ➝Electronic commerce ➝Secured online transactions
+2347063194947 Agada D. Onoja
A cashless economy is one in which a given society is regulated to
have the least needed amount of cash in circulation, the rest of
which is transacted electronically through the use of direct debit,
mobile payments, electronic fund transfer, internet banking,
multifunctional Automated Teller Machines (ATMs), point of sale
terminals (POSs), amongst others [
An effective and modernized payment system has been found to
be positively correlated with the development of the economy [
However, implementing cashless policy poses some risks. Since
personal information and data will now reside online, it becomes
increasingly difficult to curb internet hackers and thieves. Other
demerits are potential increase in cyber crimes, increased
sophistication in operation of hackers and scammers, increase in
theft of ATM, credit and debit cards, to mention but few [
In line with the nation’s vision 20:20, which is being among the
first 20 economies by year 2020 [
This study seeks to assess the level of readiness of Nigeria, in respect of provisioning of required infrastructures, when the implementation of the policy commenced in 2012, and identify possible implications of implementation considering the current state of her cyberspace. This study is significant in many ways. First, it would expose the state of Nigeria’s cyberspace at the commencement of implementing cashless policy. It also assesses the current capacity of the cyberspace to effectively support the policy. These would provide decision makers, including the government, relevant agencies, IT managers, policy makers, and other stakeholders, responsible for the Nigerian cashless policy implementation, better insight into the security implications, which would enable them to implement necessary strategies towards more effective implementation.
Effective implementation of cashes policy is predicated on the availability of some requirements. These are divided into hardware, software, legal, personnel, and logistic requirements.
Some of the hardware requirements include computer systems;
smart (debit and credit) cards, used as alternative to cash for
making purchases, for making withdrawals or deposits at ATMs,
updating account information and for other transactions made in
the banks. Others are smart phones, which provide services such
as multimedia message service (MMS), email, short-range
wireless communications (infrared and bluetooth), text messaging,
internet access, business applications, supporting online
transactions [
These are the software components used to drive and secure the
different hardware. They include phishing detection tools, to
detect and block suspicious sites. For example, when a customer
transacts on a fake website, these tools can be used to detect the
Domain Name System (DNS) roots of the sites. Anti-phishing
software can be installed on the customer’s computer, so as to
detect addresses that are not on the database during a transaction.
Another requirement is antivirus software. They are used in
detecting, preventing and removing malware such as virus,
worms, hijacker, key loggers, root kits, Trojan horses, spyware,
and backdoors. Antivirus software enhances computer security,
protecting it from social engineering attacks. Real time protection
and access scanning are provided by most antivirus, anti-spyware
and anti-malware software. It prevents attackers from having
access to banking information [
The legal requirement consists of relevant laws, standards,
policies, and regulations to clearly define the roles and regulate
the activities of the different stakeholders in the system. An
important component is the development of relevant policies on
cyber security. These based on national leadership, sharing of
responsibilities, partnership with all concerned agencies, active
international engagement, risk management control. They enhance
both collective and individual security. According to [
Also pertinent for effective implementation of cashless policy are
cyber laws. The availability, confidentiality, and integrity of
information being stored, processed, and communicated
electronically is ultimate. Therefore, relative measures have to be
taken to this regard. As there might be an ill effect from an
increase in cybercrime on the economy, country and society at
large, there is need for activities of law enforcement, regulatory
detection, and strong legal frameworks to enhance the operations
of a cashless economy. Strong legislative Acts are required for
comprehensive, effective and unified legal framework catering for
the prevention, detection, banning, prosecution, and punishment
for cyber crimes in the nation [
A third component is the monetary policy. Cashless policy
enhances the payment system of a country. It regulates the cash
collection and lodgment in the country and stipulates that there
exists a monitor and feedback mechanism that allows the full
adoption and smooth implementation of cashless economy in a
country. A monetary policy ensures that there is a limit to cash
withdrawal and lodgment fees for corporate and individual
customers [
These comprise Payment Terminal Services Provider (PSTP),
Computer Emergency Response Team (CERT), Communications
and Media Authority (CMA), and the Attorney-General’s
Department (AGD). PTSPs, amongst other things, are engaged in
proper maintenance/support of infrastructure to ensure
effectiveness of POS operations. Their services include all aspects
relating to both terminal management and support, and not limited
to purchase and replacement of spare parts, provision of training,
repairs, connectivity, and development of value-added services
[
The Communications and Media Authority (CMA) is responsible
for broadcasting regulations on the internet, radio and
telecommunications. It contributes to the objectives of cyber
security by gathering evidence, assisting in preventing identity
theft, computer fraud and regulatory obligations in regard to
criminal misuse and illegal act, and makes sure standards are met
by the telecommunications providers and Internet Service
Providers (ISPs). The last component of this requirement, the
Attorney-General’s Department (AGD), consists of security
policy protection departments, criminal law and the law
enforcement that collectively provide harmonization of cyber
security policies, which includes international collaboration and
crisis management as well as protection of security policies for
government agencies. They oversee such government business
partnerships as CERT, and provide guidance on cyber security to
owners and critical infrastructure operators [
The logistic requirement includes standards on application and
system software; standards for computer network and internet;
and high speed/broadband internet technologies, which describes
a broad range of technologies that provides higher rate of data
access to the internet, supporting faster World Wide Web
(WWW) browsing, file download, virtual private networks and
remote system administration [
Prior to the commencement of the implementation of the cashless
policy in Nigeria, the banking sector was rife with investment
environments characterized by high risk, corruption, payment
fraud, poor credit administration, lack of credit facility, and
system unreliability [
Part of the efforts by the CBN towards modernizing the payments
system was initiating the National Payments System (NPS) in
2005 [
After wide consultations with relevant stakeholders, the
implementation of the policy, termed ‘Cashless Lagos,’ kicked off
in Lagos on 1st January, 2012 [
A critical appraisal reveals that the introduction of the cashless
policy has recorded little success [
To achieve our objectives of assessing the level of readiness of Nigeria, in respect of provisioning of required infrastructures, when the implementation of the policy was commenced in 2012, and identifying possible implications of implementation considering the current state of her cyberspace, the study used both primary and secondary data. We believe effective implementation is anchored on adequate awareness and availability of necessary infrastructures. Consequently, we collected self-report data to collate views on the state of these factors. Also, relevant documents are investigated to ascertain the available quantity and/or quality, as the case may be, of selected basic requirements, during the period when the implementation of the cashless policy was commenced in Nigeria. The variables are then compared with international standards and/or world average. The indices are used to determine the adequacy or otherwise of the requirements. Specifically, in respect of infrastructures, the study focused on the e-index of the country; number of available ATMs, POSs; availability of broadband technology, enabling laws, CERT; and the authentication methods commonly in use.
To collate primary data, a survey was conducted in 2013 in Lagos, Ekiti, and Niger States. The choice of Lagos was natural being the state where the cashless policy implementation was kicked off. The research instrument used was questionnaire. A total of 250 questionnaires were distributed. Out of these, 219 were returned. 37 were found to be invalid. Consequently, 182 were used for analysis. There were slightly more male respondents, 51.6% v. 48.4%. Most were within the ages of 21 – 30 (46.7%), students (56.0%), and aware of the term cashless society and government’s plan to implement it (87.9%). The demographic compositions of the respondents are presented in Table 1.
The questionnaire used for the survey had three sections. The first section sought information on respondent demographics. The second section bordered on perception about government’s effort in terms of awareness, the country’s readiness in respect of availability of necessary facilities, and the security of the nation’s cyberspace to support implementation of the cashless policy. In the last section, respondents were asked if they were willing to subscribe to the cashless policy, considering the state of infrastructures. Those who expressed unwillingness were then requested to select reason(s). Respondents were also asked to indicate potential consequences of implementation, considering the state of infrastructures. Lastly, they were asked if they would be willing to subscribe if necessary requirements are put in place.
As can be seen from Table 2, most respondents believed the government did not do enough, in terms of creating awareness of the cashless policy (84.6%), and necessary infrastructures were not adequately put in place (89.6%) before the implementation of the policy was commenced in 2012. Equally, most felt the country’s cyberspace was not secure enough to support the kickoff of the implementation (87.9%).
Respondents who were unemployed, compared with those who were students and employed, were most critical of the government in their failure to adequately create awareness of the policy. Specifically, 94.7% of unemployed, 90.2% of students, and 72.1% of employed respondents reported government effort was insufficient. The study was found to be significant ( ).
In terms of adequacy of infrastructures provided for the kick-off
of the cashless policy, more of the females, compared to the male,
96.6% v. 83.0%, felt the available infrastructures were inadequate
( ). In the same vein, more females,
97.7% v. 78.7%, rated the country’s cyberspace not secure enough
to support implementation of the policy
( ).
4.1.1 E-Index
The ICT Development Index (IDI) is a composite index which is
used to combine 11 indicators into one benchmark measure
(presented on a scale from 0 to 10) that compares and monitors
the developments in information and communication technology
(ICT) across countries. A country with Low level of ICT
development, indicated by an IDI value below or equal to 2.33, is
not making enough effort into catching up in terms of ICT
developmental progress. This group of countries, referred to as
least connected countries (LCCs), has very low levels of ICT
uptake and use. Between 2011 and 2012, these countries recorded
the smallest increase in the average IDI value. In majority of
LCCs, internet access are very limited, low-speed, very expensive
and used by small percentage of the population. LCCs also tend to
have very low fixed and mobile broadband penetration levels, and
most only launched and commercialized 3G mobile-broadband
networks relatively. The LCCs include many of the world’s least
developed countries (LDCs), with majority in Africa. They also
include some highly populated countries that are not LDCs, such
as Nigeria, India and Pakistan. Considering the ICT Development
Index (IDI) for 2011 and 2012, Nigeria was ranked 123 in 2011
and 122 in 2012 out of 157 countries in the world [
As at March, 2012 the PoS density per 100,000 people in Nigeria
was 13. Countries such as India had 67 PoS per 100,000 adults,
Kenya had 88, Namibia 338, Uganda 453, , Malaysia and South
Africa 1,063, Singapore 1,889, United State 2156, Brazil 2193,
New Zealand 3,916, and Australia 3,939 [
In the area of broadband, while 2G mobile enjoyed significant
coverage, which was at 98%, 3G technology coverage was less
than 35%. And this was found to be mostly focused in the urban
areas. Though, internet penetration had attained 33%, broadband
penetration was only at a mere 6% [
By 2012, necessary bills such as Cyber Security Bill and
Cybercrime Bill were yet to be passed by the Nigerian National
Assembly. Even the likes of Information Protection Agency Bill,
Computer Security and Critical Information Infrastructure
Protection Bill, the Cyber Security and Data Protection Agency
bill, the Electronic Fraud Prohibition Bill, Computer Misuse Bill
were all pending in the National House of Assembly, yet to
become law [
The authentication mechanism used by banks for transactions in
Nigeria was mainly log-in passwords. However, in addition to the
password, some of the banks also adopted the use of hardware
token and PINs [
As at 2012, when the implementation of cashless policy was commenced, Nigeria had no CERT to share information, identify, analyze sophisticated cyber attacks and respond to cyber security threat.
When asked to indicate their intention to subscribe to the cashless policy, considering the state of infrastructures which they had agreed were inadequate, slightly more respondents (52.7%) indicated they were willing. Compared to the employed and unemployed, the students were most willing in subscribing to the policy, regardless of the state of the infrastructures. The percentage among students, employed, and unemployed respondents were 63.7%, 42.6%, and 26.3% respectively. The finding was significant ( ). Having understanding about the concept of cashless economy and knowledge of government’s decision to implement it was found to increase the likelihood of subscribing to the policy. While 55.6% of those aware of what cashless economy was were willing to subscribe, only 31.8% of those who reported they had no understanding indicated willingness. This finding was equally significant ( ).
Among those who were unwilling to subscribe, low awareness level ranked as the most common reason (77.9%). Other reasons indicated by most in this category were potential increase in card theft (61.6%), fear of leakage of sensitive personal information (55.8%), and unavailability/insufficiency infrastructures (53.5%). of required For potential consequences of commencing the implementation of the cashless policy, considering the state of infrastructure, most of the respondents believed it would lead to increase in card theft (77.5%), number of hackers (72.0%), internet or cybercrimes (68.1%), and sophistication of hackers’ operations (60.4%). When requested again to indicate their willingness to subscribe to the policy, with necessary infrastructures in place, 94.5% of the respondents reported they would subscribe.
The objective of this study was evaluating how ready Nigeria was,
in the provisioning of necessary requirements, when the
implementation of the policy commenced in 2012, and identifying
potential implications of implementation considering the current
state of her cyberspace. From the findings, most respondents
were aware of concept of cashless economy and government’s
plan to implement it. Confirming the results of [
A critical look at the current level of implementation makes
evident the fact that most of the challenges, which were
cyberrelated, are still being faced. For instance, the CBN set a target for
the deployment of over 400,000 PoS terminals in 2015, with the
hope of accelerating PoS density in the country to 2,247 per
100,000 people by the end of the same year [
Respondents who were willing to subscribe to the cashless policy
despite inadequate infrastructures were slightly more than those
not interested. However, with necessary infrastructures in place,
almost all were willing. The study revealed that the willingness to
subscribe was influenced by some demographic characteristics.
Though almost all the students agreed that the government did not
do enough in terms of creating awareness, they were most willing
to subscribe to the policy when it was commenced. One possible
explanation of this finding is the perceived performance
expectancy on subscribing to the policy. This entails the extent to
which a subscriber believes the policy would help achieve some
gains in job performance. Age has been found to moderate this
variable, with the effect stronger for younger subscribers [
Those who knew what cashless economy was about, and also knew about government’s plan to implement it were also found to be more willing to subscribe. This underscores the necessity of adequate awareness. Not surprisingly, inadequate awareness was found to be the biggest factor that influenced apathy towards the cashless policy. Other factors cited by those unwilling to subscribe centered on online security risks and inadequate infrastructures.
It is evident, from our study, that Nigeria was not well prepared,
considering the level of awareness and available infrastructures,
when the implementation of the cashless policy commenced in
2012. This submission corroborates part of the findings of [
Our study is not without some limitations. Using self-report data always poses the problem of generalization. For instance, the findings might have been different if the entire data were collected in Lagos alone. Additionally, the number of alternatives available for those who were unwilling to subscribe to and as potential consequences of implementation of the policy was not exhaustive. Future studies could explore a more exhaustive list of options. No doubt, new challenges must have been identified since the commencement of the policy.
From our study, it was evident that Nigeria was ill-prepared when the implementation of cashless policy was kicked-off in Lagos in 2012. Unfortunately, much has not changed in terms of available infrastructures. This poses potential risks to the cyberspace, and much more the economy, of the country. These findings highlight the necessity of continuous and more intense awareness, increasing and improving existing infrastructures, and strengthening the security of the cyberspace. Center