ATM transactions dominate e-Payment channels in 4 consecutive years

New data released by the Central Bank of Nigeria showed that transactions made through automated teller machines (ATM) were the largest in terms of volume of all seven existing e-payment channels from 2012 to 2016.

For four years consecutively, over 1 billion transactions were made by consumers using ATMs. Other channels were significant transaction volumes were recorded include NIBSS Instant Payment (NIP) with 244, 766,595; NIBSS Electronic Fund Transfer (NEFT) 141, 900,513; Mobile Money (MMO) 127, 245,538; Point of Sale (POS) 114, 288,297; cheques 64, 887,712; and web 29, 225, 645.

A breakdown of the transactions within the four year period revealed that while customers made the most transactions with their ATMs in 2016 amounting to over 470 million, 2013 saw a sharp decline with over 295 million payments made from over 375 million the previous year.

Web transactions recorded the least volume of the e-payment channels. However there was a steady rise in volume from 2012 to 2016. Cheque transactions on the other hand saw a significant drop in 2016 with 9, 764,546 from 13, 466,461 in 2015 and 15, 283,933 in 2014.

The data also showed that more people were adopting mobile money channel. In 2015 mobile money was the third most preferred channel after ATM and NIP. There was a slight drop in 2016 however.

On the value side, NIP topped e-payment channels within the period surveyed. From 2012 to 2016, the channel saw a steady growth in value rising from over N3 trillion to N29 trillion. NEFT followed behind NIP with a steady growth margin.

There are about 16,600 ATMs currently working across the country according to NIBSS. Some experts suggest that the majority of these ATMs are located in Lagos in view of the large concentration of major businesses which may also account for the dominance of the channel in terms of volume of transactions. ATMs provide convenience for the 61 million active bank customers who possess the over 65 million active bank accounts.

Other benefits of the ATMs to customers include not having to carry cash around which often pose a security risk; it is pin secured meaning mere stealing it does not mean a customer’s money will disappear; ease of payment at retail shops; and some banks allow customers to withdraw money at ATMs in foreign countries.

The ATM dominance of the e-payment channels may also be a disadvantage. Some experts believe it is evidence that Nigeria is still a cash-driven society. This could further mean that investible funds are being depleted.