Nigerians move transactions online as use of cheques declines

The latest figures from the National Bureau of Statistics (NBS) indicates that Nigerians are increasingly leveraging online payments platforms for their daily transaction as total volume of e-payment transactions grew to 238.8 million worth N18.2 trillion in the third quarter from 202 million in Q2 2016.

NIBSS Instant Payment (NIP) accounted for the largest share of e-payment transactions in the quarter with 52.82 percent. It was followed closely by NEFT at 30.07 percent while checks and ATM also grew at 7.79 percent and 6.89 percent respectively.

“This is what we have been expecting and I hope we continue to see more of this,” Niyi Yusuf, Country managing director of Accenture told BusinessDay.

According to Yusuf the growth is happening because e-payment is effectively being integrated into retail business.

“This is more of payment to make retail transaction and that is what is driving this growth that we have seen. I think the second thing that is driving it is the collaboration in the industry especially between telecos and the banks. You have banks now coming up with products that use USSD 737 to do transfer – there is the MTN and the Diamond account.

“So that convergence between telecom and banking is making it easier for the 142 million phone subscribers,” Yusuf said.

Details of the report further showed that volume of ATM transactions in Nigeria rose to 157.1 million in Q3 2016 from 136.3 million in Q2 2016 while value rose to N1.2 trillion in Q3 from N1.1 trillion in Q2 2016.

The volume of POS transactions in Nigeria rose to 16.0 million in Q3 2016 from 13.5 million in Q2 while value rose to N0.18 trillion in Q3 from N0.16 trillion in Q2. Mobile payments also rose to 10.8 million in Q3 2016 from 8.6 million in Q2 while value rose to N0.22 trillion in Q3 from N0.16 in Q2.

Volume of internet transactions rose to 3.5 million in Q3 2016 from 2.6 million in Q2 while value rose to N0.30 trillion in Q3 from N0.26 trillion.

The use of checks for transactions rose to 3.0 million in Q3 2016 from 2.8 million in Q2 but value declined to N1.41 trillion in Q3 2016 from N1.44 trillion in Q2.

The growth also throws up the concern over cyber security and possible breaches. Olabode Olaoke, Senior Manager, Risk Assurance Services, PricewaterhouseCoopers (PwC) told BusinessDay “the more numbers you have the more you have to protect.

“If you look at the information I think there is a trend you can see and it is around the growth of transaction across the different channels. Basically the primary users focused electronic channels – POS, Internet and mobile payments. If you look at internet payments in September 2016 it is about 10 billion and compare that to the same period in 2015 it is about 9 bllion. This shows you that we are having significant steady increase in use of these channels. The question is how secured are these channels.

“What it also means is that it will be a more interesting source for cyber hacking because they want to follow the numbers to see what is happening on the internet and go exactly where the money is. It does not mean people are more trusting of those channels and if people are not more trusting of those channels it means they are likely to be less conscious of the channels. It could also mean the ease of use could also be considerably more or that electronic channels have increased their number over the years or their reliability or in their ability to actually deliver service so what we would increasingly see is how people will target those payment channels.

Platforms like Konga, Jumia etc will typically be targeted. Payment processors like interswitch, NIP, NEFT and more that are providing services the cyber criminals are trying to see how they can intercept them because what you find is that hard data is passing through those channels. There needs to be some more concern around security and it has to be sustained and the only way to sustain it is to make sure that it continues to be secure,” Olaoke said.