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POS terminals increase despite challenges

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By Abiodun Okunloye

Despite barriers, the number of POS terminals has increased by 568,488.

With the data provided by the Nigeria Inter-Bank Settlement System (NIBSS), the total value of transactions conducted across all of Nigeria’s Point of Sales (POS) terminals increased to N735.6 billion in September 2022, despite the fact that POS businesses in the country have been facing a number of challenges as of late. Some of these challenges include the high costs of acquiring terminals, delays in the reversal of money, issues with the network, problems with banks and customers, insufficient levels of Security and inadequate levels of Power Supply.

Recently, many young people, including women, have turned to Point-of-Sale (POS) commerce as a solution to Nigeria’s Unemployment problems. The NIBSS reports that in the past 9 months, Nigerians had spent N6.05 trillion more than they had at the beginning of the year through these channels. This is almost as much as they spent in the entire year of 2021 (N6.4 trillion). NIBSS reported that the number of POS transactions rose to 100.4 million in September 2022, an increase of 14% year over year.

Transactions were carried out on over 1.484 million active terminals.

Based on the statistics provided on usage, it revealed that these transactions were carried out on more than 1.4 million active terminals that were deployed by merchants across the country. Because of this, the number of point-of-sale terminals has increased by a combined total of 568,488 over the course of the last nine months, bringing the total number of operational machines up to 915,519 as of the end of the year 2021.

Despite all this, there is still a disparity between the number of POS machines that are registered and the number of machines that are actually currently in use. According to the NIBSS, as of September of this year, a total of 2.164 million point-of-sale machines had been registered across the country. All this indicated that a total of 680,991 terminals have either not been put into use yet or have become inactive.

POS is widely adopted because of the shortage of ATMs deployed by banks.

The rapid spread of POS transactions in Nigeria can be attributed, in part, to the widespread adoption of payment processing by business owners. Many Nigerians now make their withdrawals through point-of-sale agents, which means that POS is helping to make up for the severe shortage of Automated Teller Machines (ATMs) that have been deployed by banks. The increasing deployment of point-of-sale systems has been enhanced by the profitability of these transactions for both banks and vendors. Customers frequently pay the bill for the transaction, which results in a profit for both the POS operator and the bank.

Furthermore, the report also revealed that electronic transactions with a total value of N32.8 trillion were carried out in September through the NIBSS Instant Payment platform (NIP). This brought the total value of E-Payment deals carried out over the course of the previous nine months to N271.5 trillion. In 2011, NIBSS created the NIP, an online real-time Inter-Bank payment solution based on account numbers. It is the go-to platform for transferring money in the Nigerian financial sector because it ensures the recipient receives their money immediately.

The value of e-payments increased by 39.5% as of September 2022.

Moreover, the value of e-payments increased by 39.5% year on year compared to the N23.5 trillion recorded in September 2021. The total value of electronic payment transactions recorded in the country in August stood at N33.2 trillion, which is a figure lower than the figure reported for September 2022. When compared to the number that was reported for the month before, this demonstrates a drop that is equivalent to 1.2% of the total.


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