The rise in the adoption of electronic payments is dragging downward individuals’ use of cheques for payment and threatening the continuing existence of the older payment channel.
Data from the Nigeria Inter-Bank Settlement Scheme (NIBSS) show that as of December 2021, the total volume of cheques processed amounted to 4.4 million with corporate cheques totaling 3.5 million and individual cheques 751,260.
In terms of value, it recorded N3.2 trillion, with corporate cheques totaling N2.4 trillion and individual N336.7 million.
The volume of cheques cleared by Nigerian banks keeps decreasing as banks and financial technology companies continue to introduce faster and easier means of making payments.
The industry data show that in the first four months of 2022, 1.37 million cheques worth N1.05 trillion were cleared.
The surge in digital payments platforms has reduced the number of visits to banking halls as indicated by the reduced number of payments made by cheques in the first four months of the year
The growth of digital payments is being driven by widespread access to mobile phones, both on the customer usage side and merchant side.
Read also: Electronic payment transactions rise by 44% in four months
Recently the Central Bank of Nigeria (CBN) reviewed upwards the transfer limits for NIBSS Instant Payment (NIP) and other electronic payment channels from N100 million to N250 million for companies and N10 million to N25 million for individuals.
By that action, the CBN practically eliminated one of the challenges that customers face with online payments. Currently, customers can easily make transfers of huge amounts of money without requesting cheques, says Gloria Fadipe, head of research, FCMB.
“The only disadvantage is the outrageous charges borne by the sender, but on the receiving end payment is made instantly,” she said.
The use of digital payments has seen transactions on the increase with the value of payments on NIP growing by 44 percent, N114.8 trillion in the first four months of this year compared to a total of N79.5 trillion in the corresponding period in 2021.
Following the same trend, PoS transactions have also increased to N2.53 trillion, a 27.14 percent increase compared to N1.99 trillion in the corresponding period.
