The volume of mobile money transfer through mobile devices in Nigeria grew significantly in the first half (HI) of 2019 (January – June), buoyed by digitisation of bank products, increased mobile penetration, cost, convenience, efficiency and speed, economic experts say.
Analysis of data sourced from the Nigeria Interbank Settlement System (NIBSS) shows that volume of mobile transfers spiked 125.7 percent to N7.9 million in H1 2019 from N3.5 million in the same period of 2018. Value of transactions jumped 62.9 percent from N140.4 billion in H1 2018 to N228.8 billion in H1 2019.
Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers, says the increase in the volume of mobile transactions shows how consumers are beginning to see the value of using electronic channels in carrying out their transactions, and the advancement in technology as against traditional banking services.
“Financial players in the banking industry have been able to invest a sizable amount in technology infrastructure in electronic channels, which has made it less expensive, convenient, efficient and fast over the traditional method of going to the bank to carryout transactions,” Ologunro also states.
In 2012, the Federal Government, through the Central Bank of Nigeria (CBN), introduced the cashless policy meant to curb excesses in the handling of cash and to reduce the volume of cash in circulation. Most importantly, the policy was introduced to drive development and moderniSation of payment systems capable of placing Nigeria among the top 20 economies by the year 2020.
“I think convenience is a huge driver, while the rest are mobile telecommunications improvement and the ability of the banks to digitalise their products and services. So, if it is digitalise but not convenient, people may not use it,” Ibrahim Tajudeen, head of research at Chapel Hill Denham, notes.
Before May 2017, the average charge for inter-bank funds transfers across Nigerian banks was N100 per transaction. But the CBN reduced the average charge to N50.
Other electronic transactions like Point of Sales (POS) activities via mobile devices also increased. Its volume rose by 55.5 percent to N187.7 million in H1 2019 from N120.7 million in same period of its previous year. Also, its value rose by 18.2 percent.
NIP transactions volume and value increased by 63.6 percent and 40.5 percent, respectively. The increased use of electronic payment systems is already having an impact on the use of cheques as its volumes reduced by 17 percent to N3.9 million in H1 2019 from N4.7 million in 2018.
