By Sami Zaptia.
London, 2 May 2021:
Total transactions made using e-payments in Libya were LD 1.180 billion in the first quarter of 2021, a top Central Bank of Libya source confirmed to Libya Herald today.
Asked to explain the low take up of e-payments and transactions by Libyans, Musbah Akkari. former chairman of Jumhuriya bank, head of CBL Reserves Department and currently member of the Libyan Dinar Exchange Rate Adjustment Committee, said it is partly cultural.
Cash is king
Libyans prefer the use of cash. They are more comfortable with cash partly through a legacy of mistrust in central government. Qaddafi had at one stage frozen all Libyan’s accounts and set them a reduced monthly withdrawal limit as part of his redistribution of wealth ideology.
Equally, since 2011 the Libyan cash crisis meant Libyans were unable to withdraw their money from their accounts. They often had to queue overnight just to withdraw a few hundred dinars.
The weakness of Libya’s e-payments as well as the country’s infrastructure has not helped. Electricity, the internet and the computer systems of the various branches and transactions centres have often been down, which interrupts e-services – reinforcing the utility of cash.
Libyans returning to cash?
At the end of April, Akkari, had warned that the use of e-payments has recently dropped reflecting the increased availability of cash at banks. It seems that by making more cash available the authorities were inadvertently discouraging the use of e-payments by making more cash available.
Akkari had noted that while the number of activated cards increased by 89,000 cards to 864,752 cards, but the value of purchases using cards decreased by 69 million dinars at the end of the first quarter of this year.
He hoped that Libyans will continue to use cards for their purchases, especially in light of the disappearance of most of the prohibitive cost premium that are charged by merchants. At the peak of Libya’s cash crisis this had peaked to around 20 percent for card payments. This naturally had an inflationary effect and discouraged the use of e-payments.
Akkari says today there are still a few e-payment companies that charge up to 16 percent e-payments premiums, but that most banks and their e-payments processing companies are not charging.
He conceded that the authorities and banks could do much more to enshrine and increase the take up of e-services.
Here are the e-payments stats for Q1 2021:
- Local activated cards: 865,000.
- Active points of sales (POS) machines: 15.800.
- Active ATM’s: 144.
- MobiCash card service subscribers: 100,000.
- Purchases through POS: LD 700 million.
- Purchases through the ‘‘Pay me’’ (Idfa’ly) e-service: LD 136 million.
- Purchases through MobiCash card: LD 272 million.
- Card purchases through Al-Bayana, Al-Madar and other e-payments companies LD 71 million.
- Total purchases through e-payment services in Q1 of 2021 LD 1.180 billion.
- Electronic messages received by the banking sector during Q1 2021: 20 million messages – most of these enquiring to find out if their state-sector salaries had been paid into their accounts by the state.
The latest CBL statistical bulletin revealed that for Q4 2020 LD 40 billion of cash were outside the banking system. Most Libyans prefer to stay outside the tax and banking system!