More Nigerians are embracing the convenience of using smartphones for mobile money transfers as it rose by 463 percent in the full year of 2019, a BusinessDay analysis shows.
According of data obtained from the Nigeria Interbank Settlement System (NIBSS) released Tuesday, the volume of transactions (transfers) via mobile devices rose to 41.1 million in 2019 from 7.3 million in 2018.
Also, the value of mobile transfers rose by 184.1 percent from N291.6 billion in 2018 to N828.3 billion in 2019.
“It is an indication of the growth in terms of mobile subscription and the usage of smartphones, because mobile transfers are done either through USSD codes or mobile apps,” Ibrahim Tajudeem, head of research, Chapel Hill Denham, said.
“Also, it means that Nigerians are increasing embracing convenience of banking with mobile devices and I expect this to improve in the medium and long term partially given the convenience that it brings in terms of bank transactions,” Tajudeem further said.
Nigeria has the largest mobile market in Africa with over 172 million mobile subscribers in 2018, accounting to a penetration rate of 87 percent of its population and represented a 6.4 percent growth increase, compared to 162 million subscribers in 2017, according to a report released by Jumia, Africa’s online retailer.
Also from Jumia, at end of 2018, there were over 36 million smartphone users, representing a penetration of 18.37 percent year-on-year. The availability of lower-price point phones still remains the major driver of smartphone penetration.
The increased penetration or use of mobile banking had an impact on the volume of bank cheques as it reduced by 13.3 percent to 7.8 million in 2019 from 9.0 million in its previous year.
Damilola Adewale, a Lagos-based economist and independent consultant, said, “Consumers are finding it easier, faster and more convenient to do transfers than cheques. Second, it’s a sign that financial inclusion is improving and more people now access financial services at the comfort of their phones. I expect this to further increase in 2020 on reduction in bank charges for electronic transfer mandated by Central Bank of Nigeria (CBN).”
The CBN has been intensifying its efforts to ensure financial inclusion of Nigerians. Last year, the apex bank moved the financial inclusion target from 80 percent in 2020 to 95 percent in 2024.
Also, Nigerian banks are trying to catch up with their counterparts in other parts of Africa in the provision of online and mobile banking facilities as part of efforts to deepen financial inclusion in Africa’s most populous country. Banks also have cut the cost per a mobile money transaction to N52.50 per transfer, down from N100.
According to Ayodele Akinwunmi, corporate banking department, FSDH Merchant Bank Limited, this shows that there is an increased adaptation of technology to drive payments and financial transaction in Nigeria, this is more to reach the unbanked people.
“We now have technology making businesses better and easier. It is also in line with the Central Bank of Nigeria’s (CBN) plan to drive financial inclusion in the country. The use of mobile phones by people in the rural areas and urban cities to make transactions, improvement in internet services across the country and data availability has actually increase investments in those areas to ensure that we have a reliable telecommunication system to support the banks payment systems.
“And again CBN has also licensed other operators in the industry to aid this. So convenience for the consumers and the efficiency in driving down the cost price of the operators makes this possible,” Akinwunmi further said.
Banks have cut the cost per a mobile money transaction to N52.50 per transfer, down from N100.
BUNMI BAILEY
