Nigeria wants its citizens to get in on the digital shift. Specifically, the digital remittance shift. Digital payments have seen an uptick in the country amid the global pandemic this past year, and the central bank hopes to encourage its continued use with the “CBN Naira 4 Dollar Scheme.”
“CBN Naira 4 Dollar Scheme” is an effort by the CBN “to sustain the encouraging increase in inflows of diaspora remittances into the country,” according to a public letter sent from the CBN to money transfer banks and money transfer operator (IMTOs). With the incentive plan, diaspora remittance recipients will receive five naira for every dollar sent through an IMTO licensed by the Central Bank of Nigeria (CBN).
Nigeria already has a large and significant remittance market, with more than $4 billion being remitted yearly, and the pandemic has highlighted the need for cash alternatives. The country is also struggling with a shortage of hard currency at the moment, Bloomberg noted, something that remittances coming from the diaspora can counter.
Remittance recipients can transfer the U.S. dollar rewards directly to their bank accounts or collect them in cash at a bank counter. “In effect, a typical recipient of diaspora remittances will, at the point of collection, receive not only the USD sent from abroad, but also the additional N5 per USD received,” said the letter.
The offer took effect on March 8 and will be available until May 8.
Offering rewards incentives for digital payment use is new to Nigeria, although the government has been pushing customers to adopt digital practices. “Going cashless and touchless isn’t in broad use in Nigeria, but I think it will come,” Jay Alabraba, co-founder of Nigerian payments platform Paga, told PYMNTS recently. “But there are some things that we will need to do to educate the market a bit better.”
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