• Friday, July 12, 2024
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Nigeria’s mobile transfers surge 122% in seven months

Nigeria’s mobile transfers surge 122% in seven months

The volume and value of financial transactions through mobile devices has more than doubled in the first seven months (January-July) of 2022, a BusinessDay analysis from the Nigeria Interbank Settlement System (NIBSS) shows.

According to the NIBSS data, its volume rose by 122.4 percent to 300.7 million in the first seven months of 2022 from 135.2 million in the same period of last year.

Its value also increased by 161.1 percent from N3.6 trillion as at July 2021 to N9.4 trillion in the same period of this year.

“Consumers are finding it easier, faster and more convenient to do transfers than going physically to the banks,” said Damilola Adewale, a Lagos-based economic analyst.

He added that the surge is a sign that the country’s financial inclusion is improving as more people access financial services at the comfort of their phones.

Similarly, Johnson Chukwu, the chief executive officer at Cowry Asset Management Limited noted that people are now recognising the safety, convenience and speed of using electronic payment systems compared to the past.

Data from the Nigerian Communications Commission shows that mobile network operators, comprising MTN, Airtel, Globacom, and 9mobile recorded a 10.3 percent increase in active subscriptions for the first six months of 2022 from 187.6 million in the same period of last year.

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“Nigerians are now shifting from cash activities to electronic payment systems and if you look at the telecommunications subscription, data subscription and usage, you will see that there is an increased usage of mobile phones,” Chukwu said.

A recent report by the 2021 Global Findex report by the World Bank stated that higher adoption of mobile money is driving the growth of account ownership in financial institutions particularly in Sub-Saharan Africa (SSA) countries like Nigeria.

The report showed that the country’s banked population increased by 15.6 percentage points to 45.3 percent in 2021, the highest in 10 years from 29.7 percent in 2011.

“Mobile money has become an important enabler of financial inclusion in Sub-Saharan Africa especially for women as a driver of account ownership and of account usage through mobile payments, saving, and borrowing,” the report added.

Apart from mobile transfers, Point of Sales (POS) also followed the same trend as its volume in the first seven months of 2022 amounted to 679.8 million, a 24.8 percent increase from what was recorded in the same period of 2021 at 544.7 million.

In terms of value, it recorded an increase rate of 26 percent year-on-year from N21.5 trillion to N27.1 trillion.

Also, the volume of Nigeria Instant Payment (NIP) platform transactions rose to 2.7 billion in the seven months, showing a 42.1 percent increase from over 1.9 billion recorded in the same period of last year.

Correspondingly, from the NIBSS data, the volume of cheque transactions fell by 7.7 percent to 2.4 billion from 2.6 billion over the same period.

“More consumers are shifting towards the use of electronic banking channels for financial transactions. So, there is an increased use of digital channels for transactions and mobile payments,” said Gbolahan Ologunro, Gbolahan Ologunro, a senior research analyst at Cordros Securities.

A report titled ‘Instant Payments- 2020 Annual Statistics’ by NIBSS also stated that COVID-19 had changed the e-payments landscape, and hastened the adoption of instant payments as people switch to electronic channels for funds exchange.

In 2012, the Central Bank of Nigeria (CBN) introduced the cashless policy which was meant to curb excessive handling of cash and to curtail the volume of cash in circulation.

More importantly, the policy was introduced to drive development and modernisation of payment systems capable of placing Nigeria among the top 20 economies in the world.

Over the years, NIBSS says Nigerian banks have exposed NIP through their various channels, including internet banking, bank branch, kiosks, mobile apps, USSD, POS, and ATM, to their customers.