As many businesses in Nigeria continue to adopt the E-payment system, where customers can pay for goods and services without the use of physical cash, this has resulted in a 40% increase in E-payments in the country, when compared to N145.8 trillion recorded in the same period of last year.
Just recently, the Nigeria Inter-bank Settlement System (NIBSS) disclosed that transactions worth N204.5 trillion were performed electronically in Nigeria between January and July this year, through the NIBSS instant payment platform (NIP).
Last year, Nigeria was among the African countries that recorded high online payment methods. 35 percent of E-commerce payments occurred by card, and 21 percent by bank transfer. The NIBSS disclosed that the value of E-payment recorded was a reflection of the increase in the volume of deals within the period.
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The NIP volume rose to 2.7 billion in seven months, showing a 42% increase over 1.9 billion recorded in the same period last year. Over the years, Nigerian banks have exposed NIP through their various channels, such as Mobile Apps, Bank Branch, Internet Banking, Supplementary Service Data (USSD), POS, and ATMs to their customers.
The NIBSS instant payments (NIP) has become the Nigerian financial industry’s preferred funds transfer platform that guarantees instant value to the beneficiary. Recall that the Central Bank of Nigeria, CBN in December 2011, introduced the cashless policy, which was kick-started in Lagos in January 2012 to reduce the amount of physical cash in circulation.
Its adoption of the cashless economy was to increase the operational efficiency of the monetary policy, provide alternatives that aid easy transactionless and greater reach, improve financial inclusion, etc. This policy has no doubt encouraged the use of electronic platforms for settlement or payment for goods and services.
There is no disputing the fact that the high rate of electronic transactions in Nigeria, reveals that a large percentage of Nigerians are embracing the cashless policy of the Central Bank of Nigeria.
The covid-19 pandemic allowed for the blossoming of digital payments, which has paved the way for the continued growth in e-payments transaction volume and value in Nigeria, reflecting the enduring shift away from cash.
According to the International Monetary Fund (IMF), the value of mobile money transactions in Nigeria increased to 9.72 percent of the Gross Domestic Product in 2020 because of the Covid-19 pandemic. The IMF also disclosed that the pandemic pushed a lot of people to explore internet banking and other digital transactions, as it has also led to the growth in agency banking like the POS Service.
Of the 986,252 registered POS in the nation, an all-time high of 955,234 was deployed in January 2022, which is 100.89 percent of the 475,494 that was recorded in January 2021.
The Nigerian E-payments industry is still poised for further growth, as alternative payment channels continue to evolve. Also, its favorable demographics and regulatory support, have continued to inform expectations of accelerated growth of the Fintech industry in Nigeria.
The surge of electronic transactions has also caused the loss of transactions with Cheques, which has continued to maintain its downward trend. On the other hand, aside from the fact that there is a surge in E-payment in Nigeria, in Africa, its rapidly expanding population has made Africa’s digital payments system one of the quickest in the world.