The Central Bank of Nigeria (CBN) in a recent report revealed that Point-of-Sale (PoS) transactions in Nigeria plummeted by N225.73 billion in the first quarter (Q1) of 2024, compared to the same period last year.
The decline in February and March culminated in a %19 drop. This is coming after January 2024 saw an initial surge in transaction volumes which rose 112.78 million, an increase from 96.35 million in January 2023.
In February 2024, the volume of POS transactions decreased to 97.57 million from the 113.53 million recorded in the same month of the previous year. March continued this decline, with volumes falling to 103.65 million, down from the high of 177.93 million seen in March 2023.
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The total volume for the first quarter of 2024 amounted to 314 million transactions, marking a substantial decrease of 73.81 million compared to the same period in 2023.
The scarcity of cash during that period prompted a surge in cashless transactions, notably through the use of POS systems, as people sought alternatives to carry out their daily transactions due to insufficient cash circulation.
The recent decrease in POS usage suggests a potential shift away from the cashless trend, indicating that the effects of the previous year’s cash shortage may be stabilizing, or that new patterns in consumer transaction behavior are beginning to emerge.
However, despite the decline in PoS transaction values and volumes, the registration of terminals saw an uptrend, increasing by 289,154 from January to March 2014. This growth represented a 47.02% increase compared to the previous year, which suggested expansion despite a decline in usage.
In Q1 2023, the number of registered POS terminals increased by 218, 475, from
2,318,947 in January 2023 to 2,537,422 by March 2023. By the same quarter in 2024, the number of registered POS terminals had increased by 289, 154, from 3,441,287 in January 2024 to 3,730,441 by March 2024.
Overall, between the end of Q1 2023 and that of Q1 2024, Nigeria has witnessed an additional 1,193,019 POS terminals, marking a 47.02% increase.
Notably, amid the decline in PoS transactions for Q1 2024, the CBN reported that cash outside the bank surged significantly. In January 2024, cash outside banks escalated to N3.28 trillion, which is an increase of 314% from N792.18 billion in the same month of 2023. For February, the amount skyrocketed further to N3.411 trillion, marking a 305% increase from the N843.31 billion recorded in February 2023.
With the significant decline of PoS transactions recorded in Q1 2024, it highlights a growing trend of Nigerians embracing cashless transactions. Cashless transactions in the country were partly boosted by the Central Bank of Nigeria’s naira redesign policy and withdrawal limits.