PoS operators not conniving with banks to create cash scarcity – AMMBAN presiden

The Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) has refuted claims suggesting that Point-of-Sale (PoS) operators are in collusion with banks to exacerbate cash scarcity in the country. This assertion came from the association's president, Victor Olojo, who strongly emphasized that such allegations are baseless and fail to recognize the role PoS operators play in the financial ecosystem.

Olojo's statement is in response to public criticisms and speculations that arose during recent periods of cash shortages. These speculations have painted PoS operators as culprits in a supposed scheme to profit from cash scarcity by hoarding currency and driving up transaction fees. However, the AMMBAN president dismissed these allegations as unfounded, clarifying the genuine challenges faced by agents in accessing physical cash to meet customer demands.

The growing dependence on PoS operators across Nigeria has led to increased scrutiny of their operations. With millions of Nigerians relying on these operators for quick and convenient financial transactions, accusations of cash hoarding can undermine the trust they've built within communities. Olojo noted that such criticisms fail to take into account the challenges PoS agents encounter, including difficulties in sourcing cash from banks and the high costs associated with obtaining cash in bulk.

Olojo argued that PoS operators are often victims of systemic inefficiencies within the financial sector. Banks, according to him, have not been consistent in providing cash to agents, especially during periods of economic strain. This inconsistency forces many agents to seek cash from alternative sources at a premium, leading to increased transaction costs for end-users. These rising costs are frequently misinterpreted as deliberate exploitation by PoS operators, rather than as a consequence of the economic realities faced by these agents.

The AMMBAN president further explained that the role of PoS operators is to bridge the gap between banks and underserved communities. They have become indispensable in Nigeria's efforts to deepen financial inclusion, particularly in rural areas where traditional banking infrastructure is often lacking. By facilitating cash withdrawals, deposits, and other financial transactions, PoS agents provide vital services to individuals and businesses alike. Olojo emphasized that accusing these operators of connivance undermines their contributions to Nigeria's economy and the central bank's cashless policy initiatives.

Olojo also highlighted the effects of the cash scarcity earlier this year, which coincided with the Central Bank of Nigeria's (CBN) currency redesign policy. During this period, both banks and PoS operators struggled to meet the surging demand for cash withdrawals. While banks faced logistical challenges in distributing the new notes, PoS agents bore the brunt of public frustration due to their visibility at the grassroots level. He argued that it is unfair to scapegoat agents for issues beyond their control, especially when they are striving to meet customer needs in the face of systemic shortcomings.

The president acknowledged that transaction fees charged by PoS operators have been a point of contention for many Nigerians. However, he explained that these fees are often dictated by the costs incurred by agents in sourcing cash. For example, agents who pay a premium to access cash from third-party sources must reflect these costs in their pricing to sustain their operations. Olojo called for a better understanding of the economic pressures faced by PoS agents and urged the public to direct their frustrations toward resolving systemic issues within the financial sector.

AMMBAN is committed to engaging with stakeholders, including banks and the CBN, to address these challenges and ensure smoother cash distribution across the country. Olojo revealed that the association has been in constant dialogue with banks to improve the supply of cash to PoS agents. He also stressed the importance of collaboration between all stakeholders to enhance transparency, reduce transaction costs, and restore public confidence in the financial system.

The association's efforts go beyond addressing cash scarcity. AMMBAN has been advocating for policies that support the growth of the PoS industry and protect agents from undue regulatory pressures. The president noted that PoS operators face a myriad of challenges, from infrastructural deficits to regulatory bottlenecks, which hinder their ability to operate efficiently. He called on policymakers to create an enabling environment for PoS operators to thrive, as this would ultimately benefit the millions of Nigerians who rely on their services.

Olojo's comments underscore the importance of understanding the broader context in which PoS operators function. He urged Nigerians to recognize the critical role these agents play in driving financial inclusion and economic growth. By facilitating access to financial services, PoS operators are helping to bridge the gap between urban and rural communities, promoting economic activities, and fostering social cohesion.

The AMMBAN president also dismissed claims that PoS operators are deliberately inflating transaction fees to exploit customers. He explained that the fees reflect market dynamics and are not arbitrarily set by agents. According to him, accusations of profiteering ignore the realities of the operational costs incurred by agents, including transportation, security, and cash sourcing. He argued that addressing these systemic challenges would lead to a reduction in transaction fees and improve the overall efficiency of the financial system.

Olojo called for a concerted effort to tackle the root causes of cash scarcity, rather than focusing on scapegoating PoS operators. He urged the CBN to enhance cash distribution mechanisms and ensure that banks prioritize the needs of PoS agents in their allocation strategies. Additionally, he emphasized the need for greater accountability within the banking sector to ensure that cash is readily available to meet the demands of Nigerians.

The AMMBAN president concluded by reaffirming the association's commitment to serving the public and supporting Nigeria's financial inclusion agenda. He expressed optimism that ongoing engagements with stakeholders would yield positive results and pave the way for a more efficient and inclusive financial system. He called on Nigerians to support PoS operators and appreciate their efforts in providing essential services under challenging circumstances.

This public defense by AMMBAN underscores the complex interplay of factors contributing to cash scarcity in Nigeria. It also highlights the critical role of PoS operators in addressing these challenges and underscores the need for a collective approach to resolving systemic inefficiencies within the financial sector.