*This write-up has been updated, after the eNaira launch on 25 October 2021.
The eNaira is the Central Bank of Nigeria (CBN)’s digital currency which is set to be launched officially to the consuming public on 1 October 2021.
Here are the important things to know about the eNaira.
- eNaira is the same as Naira (Nigeria’s official currency) but will be in digital form, to be operated through digital wallets in a mobile app.
- eNaira will be a legal tender, and can be used for any kind of trade, purchases or savings in Naira only.
- eNaira is designed to ensure financial inclusion for all categories of users. It is available for government Ministries, Departments and Agencies (MDAs), merchants/ businesses and individuals (both banked and unbanked).
- Just like the Naira, eNaira will be issued, distributed, redeemed or destroyed, controlled, secured and monitored by the CBN.
- Licensed financial institutions will re-distribute eNaira to their customers (individuals and corporate) who have been issued specific eNaira wallet codes (within the bank) by the CBN. Every user of the eNaira wallet or app, will require a CBN code, linked to the user’s bank account. In addition, user would be required to submit his or her Bank Verification Number (BVN) and some other biodata or business information (for merchant/ business accounts). *It is not currently clear how unbanked customers can be onboarded on to the app since they do not have bank accounts to which the CBN code can be linked.
- Government ministries, departments, and agencies (MDAs) will be onboarded onto their eNaira wallets directly by the CBN. The MDAs can then pay or receive eNaira from citizens who are eNaira wallet holders.
- CBN will provide its eNaira app for first use by the public, from October 2021. Banks and other licensed financial institutions can decide to integrate the CBN eNaira wallets unto their own banking apps or other new channels for use by their own customers afterwards.
- There are four tiers of consumer/ individual eNaira wallets – tier 0 is for individuals who have phone numbers but no bank account and no verified NIN; it has a daily transaction (send/receive) limit of N20,000 and a daily cumulative balance limit of N120,000. Tier 1 is for individuals who have no bank account but have phone numbers and verified NIN, it has a daily transaction limit of N50,000 and a daily cumulative balance limit of N300,000. Tier 2 is for individuals who have bank accounts but does not require physical verification of the customer or full Know Your Customer (KYC) procedures, it has daily transaction limit of N200,000 and daily cumulative balance limit of N500,000. Tier 3 requires physical verification of the individual and full KYC procedures, it has daily transaction limit of N1,000,000 and daily cumulative balance limit of N5,000,000.
- Merchant or business accounts are not tiered. They require full KYC procedures, have no daily send/ receive limits and no limits to daily cumulative balance.
- eNaira can be exchanged for normal Naira, either by bank account (same bank or other banks) to eNaira, eNaira to bank account (same bank or other banks), cash to eNaira or eNaira to cash.
- There are 2 types of CBN eNaira wallets available for public users- the eNaira speed wallet for individuals and the eNaira speed merchant wallet for business/ corporate accounts. The eNaira speed merchant wallet will in the interim, cater to the main signatory in the business. It will not immediately cater to multi-signatories and other special requirements. Necessary integrations/ customizations are expected to be done by their banks to enable all the special requirements in corporate accounts.
- Foreign currencies sent by persons in diaspora through International Money Transfer Operators (IMTOs), can be credited to the local recipient’s eNaira wallet (in Naira denomination only). This is expected to encourage / facilitate payments across borders into Nigeria.
- Effective only for 90 days from 25 October, 2021 (the official launch date of the eNaira), there will be no bank charges whatsoever (e.g., electronic funds transfer fee, VAT on funds transfer fee, USSD service charge, electronic money transfer levy, SMS notification fee, VAT on SMS. Notification fee, etc.), for eNaira transfers from one consumer eNaira wallet to the other i.e., for all send and receive transactions. There will also be no merchant charges for eNaira paid to them by their customers (e.g., Merchant service charge, electronic money transfer levy, SMS notification fee, VAT on SMS notification fee, etc.) within this 90 days period only. There are charges however, for transfer of eNaira to bank account or exchange of eNaira for cash.
- Exchange of eNaira to cash or cash to eNaira can be done either through the banks or through authorized merchants/ agents.
- Statements or ledgers for transactions done on users’ eNaira wallets will be provided by the CBN and can be spooled by the banks, for banks and users’ reconciliation/ accounting purposes.
What Businesses Need to Do:
Businesses that plan to adopt the eNaira, for its zero transaction fees and for ease of funds transfer/ receipts would need to do the following:
- Learn about the eNaira app – Licensed financial institutions, particularly banks, are expected to provide robust customer enlightenment and support programs for their customers’ adoption of the eNaira and seamless use of it.
- Just like the Point of Sale (POS) merchant accounts, transactions or statements from the merchant or business eNaira wallets would need to be reconciled to sales, bank/ cash, invoices and bills, periodically, depending on the volume of daily eNaira transactions. Accounting staff / function would need to learn eNaira wallet statements reconciliation.
- Proper reconciliations and accounting for eNaira wallet transactions will be crucial, for financial reporting, revenue assurance and taxes.
- Accounting (and Point of Sale) systems will need to be updated with eNaira wallet accounts.
- Merchants or businesses with high volume of daily transactions may need to hire eNaira technicians to provide technical support on the use of eNaira wallet to customers, help reconcile eNaira wallet statements and generally provide trouble shooting support on the eNaira app use.
How Vi-M Can Help
As a firm which provides financial assistance to businesses and individuals through software-as-a-service initiatives/ products, our team at Vi-M is well positioned to assist businesses and individuals onboard quickly to a seamless use of the eNaira digital currency/ platform through bespoke services which include (but not limited to):
- Training of accounting / bank reconciliation personnel on the use of the eNaira wallet;
- Provision of technical assistance in setting up of eNaira wallets for businesses (including integrations with ecommerce and POS platforms) and individuals;
- Setup of eNaira wallet on the accounting systems;
- Outsourcing of eNaira technicians to merchants and businesses, to provide technical support on the use of eNaira wallet to their customers, help reconcile eNaira wallet statements and provide other trouble shooting services;
- Financial and tax advisory on use of eNaira.
For further enquiries on how Vi-M can assist you or your business in this regard, please do not hesitate to send an email to email@example.com.