Tuesday Column By VICTORIA NGOZI IKEANO
email@example.com | 08033077519
Nigeria’s digital banking a.k.a. cashless policy is expected to come full circle by end of 2020. By that time it is expected to cover virtually all aspects of transactions and fully embraced by all 36 states of the federation and the federal capital territory(Abuja). So far states nationwide are in various stages of its implementation with the commercially enterprising states like, Abia, Anambra, Lagos, Ogun, Rivers and Kano in advanced stage of its implementation. The allure of digital banking is noticeable for everywhere you look in the internet you are being wooed to open an account from the comfort of your home at no cost or deposit but with full benefit of telephone/internet banking. This include being able to send/receive money from anybody in any part of the country, indeed world, in a jiffy as well as purchase items, pay for bills online. This has made it somehow attractive for virtually everybody to get an automated teller machine (ATM) card better known as a debit card. With it, even students, the unemployed and semi-literate can easily get people to ‘dash’ them money by simply paying it into their bank accounts and then going to withdraw it at anytime with their ATM.
Alas, the convenience and comfort of modern day digital banking comes with a cost that is making many people, especially the average Nigerian, long for the good old days of cash transactions when they can get their salary or gift money intact. The cost comes with the plethora of bank charges associated with internet/telephone banking and compulsory use of your ATM. Bankers should not tell me that these charges are relatively small for, as a saying goes, little drops of water make an ocean.
Consider that for every text message notification sent to you, for each of your transaction, whether debit or credit, the bank charges you N10 instead of the N4 recommended by the Central Bank of Nigeria (CBN). And for each transaction, they send you two text messages consecutively – one notifying you of the successful transfer (debit) and another notifying you of a N52 tax on it.
Surprisingly, even for buying recharge cards you are charged for the message! For example I used to have a Diamond Yello Account (DYA) and although I used to pay some money into this account, all I did with it is for buying of MTN cards for my phone. However, once in a while I receive messages from erstwhile Diamond Bank intimating me that X amount has been deducted from my DYA for text messages. Once when I phoned the Nigeria Communications Commission to complain of being charged money for buying recharge cards through the bank, I was advised to take up the issue with the bank itself.
And when I called the bank asking why money should be deducted from an account on which the only transaction I do is purchase of recharge credit, they could not give me any reasonable explanation except to say that money has to be charged for text messages sent me in respect of that.I can now understand why some people still prefer to buy paper recharge cards notwithstanding the convenience, ease and fastness associated with electronic recharge via the banks – at the end of it all, you get short-changed actually.
Now when you transfer money to someone, the banks charge you for doing so. When that person goes to withdraw the money, the bank charges him/her for that action. At the end of it, you find that the money sent is actually reduced. In order for the recipient to receive the actual cash equivalent, you have to add something to the real cash amount, taking into consideration, the anticipated bank charges which you now pay in advance with the addition to the actual cash amount you wish to give the person. Thus while the person withdraws the actual amount for him/her, the extra you topped on it will be deducted subsequently by the bank by way of text and other bank charges.
Whereas our financial institutions are quick to deduct customers’ money for their plethora of bank charges including text messages, they are reluctant to provide toll free telephone lines to customers for queries. Why? Are they so profit-minded?
Consider these multiplicity of charges by our banks, namely, N10 for every debit/credit alert they send to us,
N1000 every year for the ATM card they issue to us, 65 kobo each time we use our ATM card in other banks, N100 for every transfer to other bank accounts we make with the card, N3,000 for security tokens they give us for internet banking; N50 stamp duty charge for every transaction of N1000 and above made via electronic transfer or cash/cheque book; then there is the “transaction maintenance fee of N1 per N1000 on all debit transactions carried out on current accounts”. They also charge monthly ATM fee of N52.50, whether you use it during the period or not. These are in addition to value added tax (VAT) and withholding tax. Are our banks so profit minded? Now value added tax on both online purchases and bank charges are being increased from five percent to 7.5 percent.
All 36 states and the federal capital territory are looking to expand their tax net, to increase the number of people and items on which tax is paid. More indirect taxes for especially the self-employed and under-employed are being contemplated as states and the federal government itself scramble to increase their revenue, especially internally generated revenue.These and other utility bills are to be paid through the banks, which tantamount to double taxation. The average Nigerian would be willing to pay whatever taxes are imposed on him/her if what he/she is paying is commensurate with the services being rendered.
With these multiple bank charges are our banks really encouraging modern-day banking?