DDMS;KM;EM

The purpose of this paper is to examine the impact of cashless policy on micro and small scale businesses in Nigeria. The objective of the study is to determine the possible implication of a cashless economy on micro and small scale businesses in Nigeria. It will also proffer solution to the impending challenges that micro and small scale businesses will face in a cashless society. Finally it will re-echo the role of policy makers on the survival of micro and small scale businesses.

The researcher therefore, reviewed existing literature on the concept of cashless society and its effect on micro and small scale businesses. Recommendations on how to effectively implement the cashless policy in other to encourage micro and small scale business owners to be part of it were highlighted. It was concluded that if necessary measures are not put in place and the necessary stakeholders to the policy carried along with considerations on how the policy may affect them, the cashless policy will adversely affect micro and small scale businesses and may engineer their failure.

Introduction

Monetary system as we know it today started with the barter system or simply- trade by barter, which led to the creation of markets. It was basically characterized by the exchange of commodities for commodities with relatively same value. Since this value cannot be quantified, it made it easy for the  system to  fizzle out. However, other monetary forms like the gold standard, commodity money, fractionally reserve backed money and legal tender which were the product of the trial and error process of finding an adequate monetary form that will encapsulate most of the benefits on exchange (Boughton and Wicker, 1975).

With the advent of Information Technology and the internet, the monetary system is taking a new swing into using electronic money as a legal tender for exchange. Several literatures have pointed out the emergence of a cashless economy where the present legal tender (which is paper money and coins) is replaced with electronic money. This initiative has become a global trend. Bonugli (2006) noted that bank notes and coins are gradually phasing out as mode of payment for transactions as more systems present themselves to be viable and better alternatives across the world.