What Nigerians should know about the eNaira
Unlike Bitcoin and other cryptocurrencies which are encrypted transactions conducted individually and not a sanctioned operation of the Central Bank of Nigeria (CBN), the eNaira is backed by law and insured by the Nigeria Insurance Deposit Corporation (NDIC).
eNaira is simply a digital representative of the paper naira currency already in circulation that is issued by the CBN. This naturally makes the eNaira a “complementary” legal tender in Nigeria, that has the same exchange value as the existing naira, and maintaining a “parity of value” with it.
The CBN has urged Nigerians not to expect their eNaira to serve as a hedge against inflation because the value will be similar to the physical naira.
Another major attribute of the eNaira is that transactions are only free for an initial 90-day post-launch window, unlike what many think.
The CBN in a framework titled, ‘eNaira Circular and Guidelines’ released on the launch date stated that it will revert to its guide on applicable charges by banks and other financial and non-financial institutions at the end of the stated period. It said:
“The charges for transactions that originate from the eNaira platform shall be free for the first 90 days commencing from October 25, 2021, and then revert to applicable charges as outlined in the Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions.”
Going by the aforesaid, Electronic Funds Transfer below N5,000 is charged N10; N5,001 – N50,000 is charged N25 and for above N50,000, a N50 charge is associated.
It is also important to note that the eNaira will not earn any interest to holders. Creating the eNaira on the blockchain means you cannot have a duplicate or fake eNaira. Each eNaira note will be unique.
To ensure security of funds, the eNaira is expected to have two-factor authentication and other measures. The CBN, in a note published on its website, stated that eNaira wallet offers a great way of making purchases with retailers on-site, transferring or sending money while tracking rewards programmes.
So, Nigerians can link the e-wallet to their bank account or pay as you go with a prepay option and a promise of an embedded security token system that makes information unreadable to fraudsters.
In a nutshell, the eNaira is a critical national infrastructure fortified with comprehensive security and intelligence systems.
Payment is just a phone to phone transfer that is safe and secure. The initial zero charges also apply when users send money from their wallets to bank accounts and make withdrawals at agent or merchant locations. You can transfer your cash to eNaira and vice versa.
You can transfer funds from your regular accounts to your eNaira. For instance, if you had N100,000 in your bank account, you can transfer N30,000 to your eNaira and be left with N70,000.
If you owned no bank account hitherto, you can walk into a bank and use your cash to open an eNaira account and transact your business, rather than moving about with cash with all the concomitant risks.
The first thing is to visit your bank to register. Those in the rural areas can visit their nearest banks to register. Once you register, you will receive an invitation code after which you need to download the eNaira app and then enter the invitation code received from the bank.
After this step, you will need to enter minimum identification details (i.e., NIN, BVN, or know your customer (KYC)/anti-money laundering (AML) information, depending on the customer tier you are.
You would also need to enter other identification details such as name, place, date of birth, phone number, passport photograph, email and password. Once your identification is validated, you will receive a notification from your bank after which you can log in to your account.
Individuals can fund their eNaira wallet by transferring physical money from their regular bank (e-banking app); and then the cash holder (bank) hands over cash to an eNaira verification agent/bank branch/CBN shared agent network expansion facilities (SANEF). Thereafter, the agent transfers the cash equivalent to the customer’s eNaira wallet. (inreporters.ng)