The world of banking and finance has been one of the greatest beneficiaries of technological innovations and advancement in global payment systems. Technology has changed so much in our lives; the greatest impact has been felt in the actual way transactions take place, that is, the use of physical money itself.
In some developed countries one can do almost entirely without the use of hard cash and electronic means of payments far outstrip cash transactions in much of the industrialized world today; indeed one is regarded with consternation should you wish to make a purchase with large amounts of cash. Financial institutions are implementing electronic payments via internet-banking and plastic cards; credit cards, debit cards and automatic teller machine (“ATM”) cards, instead of hard cash.
How would you feel if you were told that you would no longer be able to use paper money and would have to rely on electronic technology for all your transactions? We all like the speed and convenience of electronic commerce, but we also like the look and feel of our hard cash; You take out N10,000 at the ATM and have a rough idea of how long it will last, you can see what you are spending it on even though it might disappear faster than you intended. It is tangible and feels real and it gives one a sense of really possessing something.
All over the world, the trend has been for governments and financial institutions to pursue policies to reduce the volume of cash in the system. Nigeria is no different and indeed cannot afford to be left behind in this initiative. There are many benefits from doing away with “old fashioned cash.” It is a means of curbing money laundering and other financial crimes, security challenges and the exorbitant cost of cash management to the banking industry. Businesses will embrace it as a means of receiving instant payments, cutting their expenses and thereby increasing their revenues. The rest of us should embrace electronic and internet banking for the speed, convenience, security, and the efficiency that it provides.
The internet has revolutionised banking and personal finance in many ways. If you have not yet embraced your banks internet banking service, there are some compelling reasons to do so.
Nowadays, we are all so busy in our work lives, that there often isn’t the time to visit the bank. With internet banking, you can carry out most of your routine banking transactions at your convenience. If you have internet access, you have unlimited access to your bank accounts; you can check your account balances, pay bills, make transfers, and manage your various accounts with a few simple clicks from your laptop or computer, your I-pad, or your cell phone.
Many people today are opting for electronic banking, using automated processes and electronic devices for their financial transactions for convenience, and efficiency. The most common forms of electronic payments are telephone banking, internet-banking and plastic cards; credit cards, debit cards and automatic teller machine (“ATM”) cards, instead of currency.
Not that long ago, even a withdrawal of N1,000 had to be processed through a bank; one had to walk into a branch, queue up for long periods and place a request by writing a cheque which had to be processed over the counter by the banker. This process can sometimes be tedious and time consuming. Debit and cards, have transformed our financial lives; one can effect a host of transactions without ever having to visit a bank. Whether it is from an online portal or your nearest grocery shop, an increasing number of merchants, including shops, restaurants, clubs, hotels etc will accept your card; even if they don’t, you can always walk into your nearest ATM and withdraw cash.
Debit cards electronically draw money out of your account almost instantly and pay the store you are making a purchase from, which is much faster and more convenient in that you don’t have to carry cash and risk losing it. The fact that the money is withdrawn immediately means that spending is limited to the amount of money that you have in the account that the card is tied to.
Credit cards have their advantages as purchases can typically be paid back over time. Interest rates are usually extremely high so one must be disciplined with credit card spending and should monitor carefully to stay within limits and avoid exorbitant charges.