As Nigeria moves towards embracing a complete cashless policy system, Nigerians have shown a substantial turn up in adopting digital channels as a means of financial transactions, such as banking apps and websites, among others, considering their efficacious and effectiveness. The development has also been boosted by the limit withdrawal policy enforced by the CBN, as Nigerians are now compelled to operate on electronic banking channels. Recent data from the Nigeria Inter-Bank Settlement System (NIBSS) shows that the rate of e-transactions carried out across the country has risen to a peak in 2022.
An analysis of the data shows that the total volume of NIBSS Instant Payment platform transactions increased by 613.1 percent to 5.2 billion in 2022 from 729.2 million in 2018. While its value also increased by 381.5 percent from N80.4 trillion in 2018 to N387.1 trillion in the same period last year. Initially, the development began to receive rise during the lockdown period warranted by the covid-19 pandemic prior to the massive adoption in 2022.
Country ranks among top 10 most developed real-time payments markets.
Experts have attributed the surge in e-payment usage to the teledensity rate and the number of internet subscribers, claiming that it has been projected. The majority now have access to mobile devices, e-banking and online services, justifying the increase. NIP, which also received an increase, is an account-number-based, online real-time Inter-Bank payment solution developed in 2011 by NIBSS. Presently, NIP is the most prevalent platform used for funds transfers in the Nigerian financial industry, which assures instant value to the beneficiary.
NIP is adopted nationwide by commercial banks, micro-finance banks, and mobile money operators who utilize the platform in their operations such as internet banking, mobile apps, Point of Sales (PoS) and Automatic Teller Machines. According to the latest ranking report by ACI Worldwide Inc., a software company providing real-time payment solutions, Nigeria ranks among the top 10 countries in the most developed real-time payments markets. The report positioned Nigeria as one of the countries where real-time payments provide enormous economic growth opportunities, ranking sixth behind South Korea, Brazil, Thailand, China and India.
The number of real-time transactions will increase to 8.8 billion in 2026.
In 2021, businesses and consumers in Nigeria saved a total of $296 million on transaction costs, increasing the country’s GDP by 0.67 percentage points to $3.2 billion. It is anticipated that by the year 2026, the number of real-time transactions will have increased to 8.8 billion, resulting in a rise in the total net savings realized by consumers and businesses to $2.3 billion. That would contribute an extra $6 billion in economic output or 1.01 percent of the nation’s expected GDP.
Additional analysis of the NIBSS data reveals that the total number of mobile transfers increased by 151.4 percent, from 284.5 million in 2021 to 715.1 million in 2022. And its value increased by 139.5 percent to a whopping $19.4 trillion. A similar increase in volume was seen in POS systems, which saw their usage rise from 982.7 million in 2020 to 1.2 billion by 2021, a 22 percent increase. Value-wise, it increased by 31.3 percent from N6.4 trillion to N8.4 trillion over the course of the year. However, during this same period, the number of cheque transactions decreased from 4.5 billion to 4.1 billion, a decrease of 9.8 percent.
Nigerians are becoming more receptive to using mobile money.
A recent survey conducted by Mastercard found that nearly all Nigerians now prefer to perform their online transactions. When compared to other countries in the Middle East and Africa, such as Kenya (87%), Pakistan (66%), Jordan (53%), Morocco (34%), and Iraq (22%), this significant proportion makes the country the most overly dependent on the technology representing 27 percent. This bolstered the verity that Nigerians, especially buyers, are becoming more receptive to using mobile money for various purposes beyond just making purchases.
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