Nigeria's central bank has upgraded the eNaira to support NFC payments

By: Dickson Arinze

Nigeria's central bank has upgraded the eNaira to support NFC payments

July 24, 2023 8:24 AM

According to reports, the central bank underlined that the incorporation of NFC chip technology will be critical in increasing CBDC acceptance rates.


Despite the ousting of the previous governor about two months back, the Central Bank of Nigeria (CBN) appears firmly behind the Central Bank of Nigeria's digital currency (CBDC) program, with no indication of abandonment.


According to The Sun→, the central bank has improved the CBDC mobile application by using Near Field Communication, or NFC, technology. This improvement allows mobile devices and payment machines to communicate while they are in close proximity, allowing for easy and contactless eNaira transactions.


Despite the inclusion of QR codes in previous versions, the CBN reportedly emphasized that the latest addition of NFC technology will play a critical role in increasing CBDC usage rates. According to reports, CBN Deputy Director of Risk Management Joseph Angaye has stated the organization's intention to implement cutting-edge technology to improve the banking industry's service to the public.



Building of the Central Bank of Nigeria. Source: The Daily Post.


Angaye reportedly indicated that the CBDC would be outfitted with programmability characteristics, embracing the idea of harnessing cutting-edge technology. He added that these programmability capabilities might restrict CBDC payments to specific government projects, lowering the risk of fraud.

 

Related: CBN urges Nigerian universities to adopt the eNaira

 

In addition, Angaye is said to have underlined that the CBDC's programmability allows for focused fund allocation to farmers, allowing for specified reasons such as tool purchasing. By using this method, the monies placed into their eNaira wallet become non-transferable for any other purpose, guaranteeing that the specified usage is rigorously followed.


According to reports, Angaye emphasized various benefits of CBDCs for retail users in the country, such as reducing settlement risks and facilitating faster transaction processing. He noted that the eNaira is intended to solve the issue of financial inclusion and that Nigeria's pioneering role in the adoption of CBDCs provides valuable insights for other economic players and organizations to learn from the country's experience.


Nigeria debuted its eNaira in 2021, joining a small number of nations with a CBDC product. However, acceptance rates have fallen short→ of projections, prompting the central bank to consider various strategies to boost usage.


The central bank launched use cases in the transportation industry while also incorporating USSD capability in the offering. With poor adoption rates→, former CBN Governor Godwin Emefiele accused commercial banks of limiting eNaira growth in order to increase their profits.