Electronic payment transactions hit N123.8 trillion in the first three months of 2023, as a result of the naira redesign policy by the Central Bank of Nigeria (CBN).
NIBSS-instant payment (NIP) set a record as a transaction value of N123.8 trillion was reported in the first quarter of 2023, a 44.6 percent increase from N85.6 trillion reported in 2022, data From the Nigeria Inter-Bank settlement scheme shows (NIBSS).
The industry data reported a surge in the volume of 2.5 billion, this is by far the highest three-month volume of NIP transactions reported in the last 11 years when the CBN implemented its cashless policy.
In 2012, the Central Bank of Nigeria introduced the cashless policy, which was meant to curb the excessive handling of cash and curtail the volume of cash in circulation.
More importantly, the policy was introduced to drive the development and modernisation of payment systems capable of placing Nigeria among the top 20 economies in the world.
However, before the ease of the cash scarcity by the CBN, in line with the Supreme Court ruling on March 3, 2023, many Nigeria faced a cash crunch as the currency in circulation in the country dropped from N3.29 trillion as of October 2022 to N1.38 trillion as of January 2023 as a result of the naira redesign policy.
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The redesigned policy which was made to drive cashless policy in Nigeria faced several hurdles as bank infrastructure witnessed intense pressure in the volume of transactions carried out by banking customers and exposed them to various loopholes as a result of failed transactions.
Despite this, the cashless policy has a positive effect on online businesses and gives more trust to Nigerian-based customers to engage, said Daniel Audu, CEO of Driverng, in a tweet.
“The increase in transactions is going to continue as time goes by, as Nigerians are getting used to it,” he said.
Gloria Fadipe, head of research, FCMB, said the first three months of this year is no different from every previous year as the only thing changing is the acceptability of Nigerians embracing cashless.
“E-payment will always continue to increase, banks will continue to invest in their electronic channels, fintech is springing up, cash is still widely used and Nigeria demographics favour this shift.”
BusinessDay analysis of the industry data shows that mobile transfer also rose during the period under review as the volume of money transfers performed using the channel increased to 505.2 percent to 672 million from 111 million. In terms of value, N9.1 trillion was reported from January to March this year, compared to N3.5 trillion in 2022.
Mobile payment schemes and mobile phones as channels to which banking services will continue to gain traction, particularly in Sub-Saharan Africa.
According to the global body of mobile operators, there will be 100 million additional subscribers to mobile money in Sub-Saharan Africa between now and 2025.
Following the trend in surge in transactions, Point of Sale (PoS) wasn’t left out, experts say, the volume of transactions increased as Nigeria had to rely on it, during the transfer glitches from banking infrastructure.
The PoS data reported a 37.5 percent rise to 387 million in the first three months of the year, from 281 million in the corresponding period.
In terms of value, transactions performed using the PoS channel increased to N2.8 trillion from N1.8 trillion, accounting for a 52.2 percent increase in the period under review.
The surge of electronic transactions has caused the loss of transactions with Cheques, which has continued to maintain its downward trend in value to N7.6 billion in the first three months of 2023 from N7.9 billion in the same period of 2022.
In terms of volume, 1.1 million was reported in the first three months of the year, from 1 million in the same period of 2022.
Nigerian banks have exposed NIP through their various channels i.e. internet banking, bank branch, Kiosks, mobile apps, Unstructured Supplementary Service Data, Point of Sales (PoS), Automatic Teller Machines, etc. to their customers.
