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Nigeria’s real-time payment transactions to hit 8.9bn in 2027 – Report

Real-time payment transactions to hit 19.7 billion by 2028 — Report

The volume of real-time payment transactions in Africa’s biggest economy is projected to hit 8.9 billion in 2027 from 5.1 billion in 2022, according to a new report.

The report in its fourth edition was published by ACI Worldwide, in partnership with GlobalData, a leading data and analytics company, and the Centre for Economics and Business Research.

It tracks real-time payments volumes and growth across 53 countries, including an economic impact study which provides a comprehensive view of the economic benefits of real-time payments for consumers, businesses and the broader economy across 30 countries.

“The COVID-19 pandemic encouraged Nigerian consumers to shift from cash to electronic payment methods, which further supported real-time payments growth,” it said.

It said in March 2021, the Nigeria Interbank Settlement System (NIBSS) launched NQR, an interoperable national QR code standard to facilitate instant P2B and P2P payments by scanning QR codes.

“This will further catapult instant payments use, helping it to record an 11.7 percent CAGR from 2022 to 2027 in terms of volume,” the report added.

A real-time payment is any payment processing network that is used to send money electronically. It offers consumers and businesses cheaper, faster and more efficient ways to pay.

In Africa’s biggest economy, NIBSS Instant Payments (NIP) is the country’s real-time payments system. Launched and developed by NIBSS in 2011, NIP is an account-number based online-real-time Inter-Bank payment solution.

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“The system is supported by all commercial banks, micro-finance banks and mobile money operators, and can be used via different modalities including internet and mobile banking, bank branches, kiosks, mobile USSD, POS terminals and ATMs, which helped NIP to achieve high adoption and usage rates,” authors of the report, said.

The pandemic had changed the e-payments landscape, and hastened the adoption of instant payments as people switch to electronic channels for funds exchange, according to NIBSS.

Data from NIBSS shows that the volume of money transfers rose by 505.2 percent to 672 million in the first three months of 2023 from 111 million in the same period of last year.

In terms of value, N9.1 trillion was reported from January to March this year, compared to N3.5 trillion in 2022.

A recent report by Duplo, a business payment platform for African businesses revealed that 48.5 percent of Nigerians use electronic bank transfers as their preferred way to pay vendors.

The report titled ‘Exploring the State of B2B Payments in Africa’ surveyed opinions of more than 1,200 professionals from Kenya, Nigeria, South Africa and Ghana.

“The surveyed companies across all the four countries are increasingly using digital payments as seen from electronic bank transfers emerging as the top choice for paying vendors,” it said.

It said South Africa leads with 49.1 percent adoption of electronic bank transfers, followed by Nigeria (48.5 percent), Ghana (34 percent), and Kenya (31.9 percent).

Analysts at ACI’s Worldwide noted that Nigeria is one of the countries for which real-time payments provide the biggest economic growth opportunities. The country, traditionally being a cash-based economy with an increasingly high population, expects higher speeds, greater simplicity and modern thinking from financial service providers.

“Cash remains king, but this shift is testament to the success of government regulators in fostering rapid growth in digital openness, particularly payments. There is now an ongoing drive within the country to extend this momentum to cross-border use cases,” they added.