The cashless banking sector is one of the biggest contributors to the Nigerian economy but it comes with growing problems that need solutions.
Since the sweeping regulations by the Central Bank of Nigeria in the 2000s that made it compulsory for commercial banks to have a certain amount of capitalization in order to operate, the industry became more streamlined and very recognizable.

Not only recognizable but profitable as well. Even if a bank struggles another bank will take over. The days of a bank folding and collapsing with people's funds and jobs going up in smoke are practically a thing of the past.

The banking sector has remained one of the most lucrative in the Nigerian economy and one of the reasons it has remained so is the offering of digital products. With more products that can keep one out of the bank yet keep transactions going, banks are growing stronger and stronger.

One product that revolutionized the banking industry is the mobile banking system or what is popularly known as POS (Point of Sale). With this, banks are in every street corner with different types of transactions carried out. It was a masterstroke to the Cashless Policy drive adopted by the CBN in 2012.

Not only has the POS business made banking easier but it has also enriched the lives of the operators who make a good living on a daily, earning well from charges per transactions and commission from banks. The amount of income earned from this has led to the establishment of many POS outlets.

Indeed, every street or corner one turns to is a POS stall or kiosk. It is sometimes difficult to count as the number of stalls are simply too many. Not to talk of when one enters major markets where different commodities are sold.

It is good to earn a living off a life-changing product like the POS but for every good thing in Nigeria, comes a serious concern especially when it has to do with money.

For everything that makes it easier to exchange money, comes a bigger element of financial fraud. With POS stalls increasing day by day, it is no surprise that financial fraud is being reported.
Cases of ATM card holders details being exposed after making a POS transactions, to the fraudsters devising dubious means in how to get very sensitive details and then proceed to withdraw as much cash as they can from a bank account without the suspect's consent among other fraudulent practices.

As fraud grows so do Nigerians become sceptical about using that system so as not to get caught in the web.

In the wake of this concern, Jimoh Olajide, a member of the House of Representatives from Lagos Mainland Federal Constituency, called for the CBN to put stringent measures in place in regulating POS operations.

“While many Nigerians are making legal money from this lucrative business, some are using it for fraudulent acts to create fake credit alerts to defraud innocent customers hence the need for government intervention to rescue the rising business sector in the country," Olajide said at the lower chamber of National Assembly in Abuja.

While this is a good push from the lawmaker, it is rather surprising that the POS system was never regulated properly by banks or the CBN, making it possible just about anyone to go into the business.

This should not be. There should be strict criteria in being able to own a POS machine. Not just anyone should own it. There should also be scrutiny on the number of stalls and kiosks that can be licensed to operate. It is reported that the CBN does not have a count of POS operators in the country and that is already a problem on its own. Even more ironic from the body that aggressively pushed for a cashless policy.

There is no need to have excessive number of operators on the same street or corner. It makes fraudulent activity very easy to carry out. Bank users should be able to have peace of mind when using POS services and not fear being defrauded. It puts a big stain on what is already a successful and thriving model.

All that is needed is tight security and monitoring around the system. Hopefully, the motion by Rep. Olajide will be the beginning of legislation and change that is critically needed in an ever-increasing yet porous sector of the banking industry.