The transformation of the financial sector of the Nigerian economy has always occupied a cardinal position in the economic policies of all political administrations in Nigeria. Using electronic banking as a platform, the cashless policy was introduced to further deepen the financial market microstructure. This study examined the impact of cashless policy on the profitability of Nigerian banks, against the backdrop that these banks in a cash based economy are known for their huge profits even in the face of associated high cost of operations. Basically, will banks in the cashless regime still make as much profits as they use to make? To address this, secondary data were collected and analyzed using content analysis comparing profits under cash based policy with a cashless regime. The results revealed that cashless economic policy positively impact on banks’ profit through reduction in cost of operations and banking the unbanked populace.
This article examined development and challenges of cashless policy in Nigerian economy and determined its effect on business transactions and financial reporting. Sample size was drawn from the population in South East of Nigeria. Questionnaire and oral interview were main research instruments; analysis of data and test of hypotheses were carried out using Z – test statistics and Chi-square. Main findings in the study include; Stakeholders in the financial statements of corporate entities place more credence on financial statements emanating from cashless-based economies because of its effect on reduced tax evasion, inflation and revenue leakages, easier to comply with auditing standards and effective performance of business transactions. Challenges on adequate and standard infrastructure, low level of literacy and poor banking habits were revealed. There was also this perceived increased cost on the part of vendors while disposing of their wares which would have been avoided if the transaction was by cash.