Analysts believe that the much-anticipated unveiling of the eNaira by the Central Bank of Nigeria is a major step in digital banking that would be beneficial to consumers because users might choose to hold money in their eNaira wallets instead of leaving it in deposits with their banks.
According to the experts, the introduction of the eNaira may also erode the profitability of some banks in Nigeria.
The eNaira which will be an electronic version of the local paper naira currency, equal in value and issued by the CBN, was earlier scheduled to take off by October 1st, and later postponed by the CBN.
A banker who craved anonymity revealed that banks are afraid that the eNaira will erode their profitability, especially in the area of commissions and charges.
Similarly, Cyril Ampka, an Abuja-based economic analyst, said, “With eNaira, there is no hiding place for banks and their hidden charges as everything about the CBC is transparent and open.
“I expect banks to start thinking of how to onboard the eNaira feature on their e-channels because the majority of Nigerians had experienced deduction of unbelievable charges.”
Another economic analyst, Mr. Tochukwu Egesi, noted that although financial institutions will be able to develop their own eNaira wallets, the initial roll-out will use the CBN’s Speed Wallet.
“Furthermore, because peer-to-peer and peer-to-merchant transactions will be free, traffic will be lured away from the payment services of banks and fintechs. This could “grossly affect” banks’ non-interest revenue models and present “uncertainty in the business model and sustainability of thriving payment fintechs in Nigeria..”
Meanwhile, the CBN had earlier informed banks that the eNaira is not a subtle scheme to take away bank customers but a plan to grant access to more financially excluded people.
In details published on the website of the nation’s digital currency which went live ahead of the planned launch on October 1, the CBN said the eNaira opens up a whole new market of digital currency users for financial institutions to increase their customer base and add value to their account owners.
Investigation has revealed that about two banks with robust e-channels have signified interest in taking part in the eNaira introduction as the majority do not know how to benefit from it.
One of the two banks, Guaranty Trust Bank, has informed its teeming customers of its readiness to integrate the eNaira feature of its app in a message to its customers.
Nigeria is one of around 80 countries across the world that has been exploring the possibility, but will be the first to launch one in Africa. South Africa is moving towards a trial, while Ghana, Morocco, Tunisia, Kenya, and Madagascar are all said to be in the research stages.
Meanwhile, the CBN has assured that the eNaira’s usability would definitely improve as Nigerians would be able to transact without having to subscribe to data or having an internet enabled phone.