This morning, my attention was drawn to some very shocking figures regarding PoS usage in Africa. While Nigeria has the highest number of telecoms subscribers, its citizens are not doing so far when it comes to paying via PoS. And I can’t help but ask why.
According to a new report by Indexmundi, Nigeria ranks seventh in Africa in the use of point of sale (PoS) channels. According to Indexmundi, only 21 percent of total transactions in the country are done through the PoS device.
Guess which country is number one in Africa – South Africa with impressive 91 percent followed by Ghana (can you imagine) at 80 percent while Tunisia is third with 79 percent. Other countries that are ahead of Nigeria are Egypt, Morocco and Kenya in that order.
Deciphering why Nigerians still prefer cash to PoS isn’t a very hard one, all I had to do was to replay my personal experiences.
I remember visiting the Shoprite outlet in Ibadan few weeks ago. On this particular Sunday afternoon, my attention was drawn to a notice asking shoppers to consider using their cards instead of cash as a result of the plans of the Central Bank of Nigeria (CBN) to impose additional charges on cash payment. I almost said it would work until it got to my turn and the lady attending to me had to start going from one payment point to another to borrow a PoS machine.
I’ve observed that the experience is similar at several other retail outlets in the country as the PoS machines are not as ubiquitous as expected. While standing and watching as the lady went from one point to another, I began to blame myself for not paying with cash since I had sufficient cash on me.
“Your movie would have started by now,” the cynical me told the rational me.
I know this is a very familiar feeling many Nigerians would have had at one point or the other. Probably the strongest reason why many Nigerians are still reluctant to use the PoS is the attribution of liability when payments fail to go through. And I’ve also had my fair share of that – the one I remember most happened at Coldstone Creamery – also in Ibadan.
I went to the Palm’s Mall at Ring Road with a couple of friends and they decided to eat some ice cream totalling N8,000 and as a good Nigerian in support of the cashless policy, I gave the staff my ATM card only to be told that the transaction did not go through but I was debited. Yet I had to use the cash I had on me to settle the bill. It took two weeks for the billing issue to be resolved.
Perhaps what made this network issue to be a strong factor for me was not my personal experience, it was someone else’s. I went to another store to do some shopping and a back-and-forth argument caught my attention – it was between a shopper and a rep of the store over debit alert despite claiming the payment did not go through. The crux of the matter was that the man did not have cash on him and the sum that got hanged in the process was what he banked on to get essential items for his wife that just delivered in the hospital. The store said they could not be held liable for the failed transaction and they asked him to complain at his bank on Monday since it happened on a Friday evening which meant he had to borrow to sort out the bill.
For someone that the cashless economy could not safeguard his ‘last card’, it would extremely hard to convince him to embrace the cashless economy.
Until the customer can be rest assured that he will not suffer if something goes wrong with the PoS transaction, the rate of PoS adoption will continue to be abysmally low. The sorry part of this tale is that the stakeholders are not doing much in this regard; they are aiming to trend on Twitter instead.
