The volume of mobile inter-scheme transactions (mobile transfers) via mobile devices increased (year-on-year) by 80.8 percent to 932,355 in February 2019 from 515,692 in February 2018, and on a month-on-month basis by 28.6 percent from 724,803 in January, according to an analysis by BusinessDay.
Data from the Nigeria Interbank Settlement System (NIBSS) show that the value of mobile transfers also rose year-on-year by 34.4 percent to N30 billion in February 2019 as against N22.3 billion in the same corresponding period in 2018, while month-on-month it rose by 12.1 percent.
Johnson Chukwu, CEO, Cowry Asset Management Limited, said February of this year was an election or pre-election month and so normally economic activities were meant to increase.
“There are a lot of liquidity movements from elections related expanses like campaigns. So, one would that the level of financial transactions would certainly be higher than the proceeding periods,” Chukwu said.
Similarly, the volume of Point-of-Sales (POS) activities rose (year-on-year) by 54.5 percent to 25.8 million in February, from 16.7 million in February 2018 and month-on-month, it reduced by 8.5 percent from 28.2 million. The value of POS transactions rose by 33.5 percent to N193.4 billion in February 2019, as against N144.9 billion in the same corresponding period in 2018, while it dropped on a month-on-month basis by 13.2 percent from N222.9 billion in January.
Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers in his own opinion, said pre-election spending was not the major driver for this growth.
“One would expect that pre-election spending should be the major factor but contrary to historical trends, I don’t think we saw much of electioneering spending to lift economic activities,” Ologunro said.
“So, I think it is driven more on consumers or the banking population shifting towards the use of electronic banking channels for financial transactions. So, there is increased use of digital channels for transactions and mobile payments,” Ologunro said further.
Additionally, the value of transactions on NIBSS instant payment (NIP) platform rose by 33.9 percent to N7.5 trillion in February 2019 from N5.6 trillion in February 2018, while its volume increased by 65.4 percent to 72.6 million in 2019 from 43.9 million in 2018.
While on a month-on-month basis, its volume increased marginally by 0.4 percent from 72.3 million and its value declined by 7.4 percent from N8.1 trillion.
The increased penetration of electronic payment systems is already having an impact on the volume of cheque transactions as it fell by 18.3 percent to 640,497 in February 2019 from 784,659 in the same period of last year, while on a month-on-month basis, it also declined by 10.1 percent.
“Hardly will you see people going to banks to cash cheques these days,” Chukwu said.
The convenience and ease can also be attributed to the reduction of mobile bank transfers fees by the Central Bank of Nigeria (CBN)
Before May 2017, the average charge for inter-bank funds transfers across Nigerian banks was N100 per transaction. But the CBN reduced the average charge to N50.