More Nigerians are going cashless as the volume of financial transactions through mobile devices more than doubled in the last 11 months (January-November), according to data from Nigeria Interbank Settlement System (NIBSS).
BusinessDay analysis of the NIBSS data show that its volume rose by 144.9 percent to 609.9 million as of November from 249.0 million in the same period of last year.
Its value also increased by 156.5 percent from N6.9 trillion as at November 2021 to N17.1 trillion in the same period of this year.
Apart from mobile transfers, Point of Sales (PoS) also followed the same trend as its volume increased by 25.3 percent to 1.1 billion from 877.9 million in the same period last year.
In terms of value, it recorded an increase rate of 33.3 percent year-on-year from N5.7 trillion to N7.6 trillion.
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 African countries like Nigeria.
“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,” it said.
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The report also said 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.
“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, senior research analyst at Cordros Securities.
The volume of Nigeria Instant Payment (NIP) platform transactions also rose to 4.6 billion in the 11 months, showing a 53.3 percent increase from 3.0 billion recorded in the same period of last year.
The volume of cheque transactions fell by 9.5 percent to 3.8 billion from 4.2 billion over the same period, according to the NIBSS data.
The transition from the old naira notes to the new ones, which have started entering circulation, are expected to spur the use of electronic banking channels ahead of the expiration of the old notes by January 31, 2023.
Damilola Adewale, a Lagos-based economic analyst, said people would be limiting the amount of cash they carry along now, which may boost electronic transactions.
“People will most likely limit the amount of cash at hand by adopting e-channels for their transactions because the expiry date for the existing notes is January 2023,” he said.
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 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.
