Safety measures to check coronavirus (COVID-19) spread did not spare electronic transactions as the volume of e-bills dropped to its lowest in five months, but the value is held up.
Although the number of mobile phone connections in Nigeria has increased, the volume of e-payments for bills dropped between January and May 2020, according to data from Nigerian Inter-Bank Settlement System (NIBSS). The volume, which began the year at 122,685 in January dropped to 44,465 in May, representing over 100 percent decline. It is the first time in four years the volume has repeatedly failed to match or surpass the figures from the same period in the previous year.
January 2019 was the last month the volume of e-bill payment recorded a high of 134,656, and since then growth has declined.
Several reasons are responsible for the decline. Apart from the drop in income due to layoffs, pay cuts and furloughs, the closure of schools due to Covid-19 lockdown, affected the volume of payments. Payment of school fees often accounts for the most volume and value of e-transactions.
It should also be noted that electricity distribution companies like Ikeja Electric plc suspended disconnection for two weeks in April for customers it said cannot afford to pay because of the lockdown. The short-term palliative meant that customers did not pay for electricity during the period, which also affected volume.
The first month of the lockdown – April – was the most affected as transactions dropped almost half (40,992) from what they were in March 2020 (80,418), and more than double compared to April 2019 (95,784).
While volume dropped, value, however, is relatively holding up, posting an all-time high of N107 billion in March. Although the lockdown was declared in March, total compliance began in April. Hence, experts say it is possible that many Nigerians had anticipated a long-term shutdown, and this would likely explain the drop in volume and value in April. While the month of April saw the worst decline in volume, the value for the same month dropped to N85 billion from N107 billion the previous month. The value dropped further in May to N80.2 billion.
E-payments conducted online are a secure and convenient service that allows customers pay bills without the hassle of leaving their homes. Online bill payment is offered by many banks and bill-pay services firms.
Through these electronic services, customers can pay school fees, utility bills like electricity, water, cable TVs, video streaming services like Netflix, IrokoTv, and other subscriptions.
The different channels such as mobile transfers, PoS terminals, and USSD also recorded many downtimes, which affected the quality of their services and ultimately eroded customers’ trust.
NIBSS is the aggregator of all the electronic bill payments for banks and many other financial institutions. However, there are other aggregators like Quickteller. Interswitch, owner of Quickteller, was unable to respond to questions until the publication of this article.
However, Babatunde Ogundeyi, co-founder of Kuda Bank, a digital banking service that works with different aggregators, says volume on its platform has seen growth rather than decline.
April was particularly a good month for the digital bank as it saw almost double-digit growth. Carbon, another digital banking service that provides bill payment to users, tells BusinessDay that it is close to doubling its 2019 record between January and April, until the lockdown.
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