Nigeria’s cash payment to fall by 4% in 3 years on increased digitisation

Cash payments in Nigeria are projected to fall by 4 percent by 2027 as the country experiences a significant shift towards digital payment methods.

According to the Global Payment Report 2024 (GPR) published by Worldpay, cash is the predominant payment method in Nigeria, particularly in e-commerce. The GPR 2024 report highlighted that Nigeria led Middle Eastern and African countries in cash dominance for e-commerce payments, with cash on delivery accounting for 15 percent and account-to-account payments representing 32 percent of transactions in 2023.

Read also: More Nigerians embracing digital payment – PalmPay MD

“Cash remains the undisputed consumer choice for Nigerian consumers, accounting for 55 percent of PoS transaction value in 2023, the highest share across the region,” the report stated.

According to the Informal Economy Report 2024, published by Moniepoint in collaboration with the Small and Medium Enterprise Development Agency (SMEDAN) and the Ministry of Trade and Investment, Nigerian consumers are increasingly preferring digital payments. The report found that 24 percent of customers prefer to pay with cards, while 18 percent opt for bank transfers. Cash, once the king of payments, was the third preferred method at 15.2 percent.

A further breakdown of the GPR report revealed that digital wallets are projected to grow to 37 percent in 2027 from 18 percent in 2023, while debit cards and prepaid cards will decline. Credit cards and PoS financing will remain static.

The report stated that cash payments in South Africa will fall by 3 percent by 2027, with the share in PoS transactions falling to 26 percent from 33 percent as of 2023.

Read also: Noones deepens digital payment in Africa, exceeds 200,000 apps download

“Cash use continues to drop, down to one-third (33 percent) of transaction value in 2023 from over half (53 percent) pre-pandemic in 2019. Cash use is forecast to drop slightly by -2 percent CAGR from 2023-2027 and is on pace to account for over one-quarter (26 percent) of POS spend by 2027,” it said.

However, the digital wallet in South Africa continues to grow, accounting for 20 percent of e-commerce and 7 percent of POS spending in 2023.

“Digital wallet use in South Africa is fragmented across domestic bank providers such as FNB’s Cell Pay Point, stored value wallets like MTN MoMo, super app VodaPay, and international brands Apple Pay and PayPal,” the global report added.