POS Operators Devise New Means To Circumvent CBN’s Cash Limit Policy

The Central Bank of Nigeria’s cash limit policy kicked off on January 9, as scheduled but POS operators who are frustrated with the new rule are already devising means to bypass the withdrawal limit for individual accounts.

The CBN had on December 6, 2022 announced plans to cut withdrawal limit to N100,000 weekly and N500,000 for individuals and corporates respectively.

But the bank was pressured to adjust the limit upwards to N500,000 and N5m for individual account holders and corporate account holders as any amount withdrawn above the limit would attract 3 per cent charge.

The CBN believes the policy is a big win for its cashless economy drive.

But the policy has been greeted with mixed feelings by POS operators who are divided into two; those with corporate bank accounts and those who transact with individual accounts.

Most POS operators use individual accounts for their transactions due to the rates charged on corporate accounts, findings revealed.

An Abuja based POS operator Musa Bamaiyi told THE WHISTLER that when he went to the bank on the day the policy took effect, he could only withdraw N100,000 which is far below his daily transaction threshold.

Bamaiyi does an average transaction of N1.2m weekly but he will have to pay 3 per cent charge on the additional N700,000 if he must remain competitive, he told the website.

But more worrisome for him is that his profit will be eroded if he pays a whooping N21,000 as charge for the extra N700,000.

Averagely, POS operators charge around N2,000 for every N100,000 which implies he can only get N14,000 profit from a N700,000 worth of transaction leaving him with a deficit of N7,000.

Bamaiyi said, “I was very angry when I got to bank to withdraw N500,000 and it declined. Most of us POS operators who use MoniePoint have corporate account but you know MoniePoint Microfinance Bank have very few branches.

“I have some contractors who send huge money for me to pay their workers in cash sometimes they send N500,000 in a day. How does CBN want me to pay them- some of them don’t have accounts.

“So, I will have to pay more to meet up. Some are increasing charges but I don’t think of increasing my charges to meet up with the 3 per cent fine for withdrawing above the limit. This is because it will scare my customers. Even if I consider increasing, it will be very minimal.

“I’m also not considering a corporate account because of the charges on it. It will erode my profit. But some of us have devised a way to bypass the policy. We have to look for alternatives and I have to look for other people who don’t use their account, pay in money and they will help me withdraw. We just have to find a way out.

“Infact I do an average of N200,000 worth of cash transactions daily. So how can I meet up with the new limit?”

The proprietor of Shady Fast Cash, Sarah Moyuho, who is also based in Abuja is strategizing to get more cash from churches, eateries and stores that handle large volumes of cash.

She told said, “Another way of getting cash is if you have or know people who run big businesses like the block industry, supermarket, eateries etc.as well churches, you can get the cash from them at the close of business or Church service.

“Some of them have large cash that is meant to be deposited in the bank and you in turn deposit the money in their accounts through transfer.”

An Abia State based POS operator Chinenye is skeptical about withdrawing above the weekly limit through a third-party account.

Although she did not dismiss the viability of the strategy, she is also planning to limit the amount of cash she deposits in bank, a move she believes will help her circumvent the policy.

“Before you start using another person’s account you have to know the individual and their character. In fact, the account holder must not be someone who does a lot of cash transaction if not it won’t work. For me I will limit the amount I deposit in banks so that I will have enough cash to dispense to my customers,” she told THE WHISTLER.

A Professor of Economics and the Dean, Faculty of Economics, Kaduna State University, Aminu Yusuf Usman said using a third-party account to withdraw would defeat the essence of the policy.

Usman also revealed that it would create room for fraud in the banking system.

The analyst said, “This policy is going to hurt POS businesses significantly because their major work is to disburse cash. This will affect POS business that the CBN has for long promoted so well.

“If you ask every POS holder to use corporate account, it will be huge cost on their side because they have to register a company and pay higher charges. Making the business less profitable will make the policy counterproductive.

“The problem is that if you close the door for someone, he will find a way to circumvent the law and they will not allow their business to die without fighting back. If they will have to withdraw from accounts belonging to different people, it won’t be good for the system.

“It could lead to fraud and people being duped in the process of trying to withdraw from other accounts.”