Nigerian Inter-Bank Settlement System Instant Payment (NIP), an electronic payment channel, emerged the most preferred e-payment channel by the end of first half of 2017, as corporate and individual bank customers executed 63 percent of all the value of e-payment transactions through it.
That was higher than 59 percent of the value of e-payment activities processed through the same channel in similar period in 2016.
The value of activities through the ATM, POS, WEB, and NEFT relative to the total value of e-payment activities in the first half of 2017 remained flat, while those transacted by means of cheques fell.
The total e-payment transactions for the first half of 2017 rose by 49.62 percent to N41.79 trillion as against N27.93 trillion in corresponding period in 2016. This translates to a gain of N13.85 trillion.
In addition to being the most used platform, NIP also accounted for N10.12 trillion, or 73 percent of the total increase in value of e-payment activities in H1 2017. NIP is an on-line real-time bank account numbers based Inter-bank credit transfer. The service is majorly offered via bank’s internet banking, mobile and bank branch platforms for corporate and individuals as well as through the banks’ branch network.
When compared with the first half of 2016, the value of transactions through the POS went up by 98 percent from N308.46 billion to N610.11 billion in same period this year. Mobile payment rose by 83 percent from N303.52 billion to NN555.82 billion. WEB payment increased to N83.67 billion up from N57.96 billion.
NEFT activities rose by 42 percent to N8.22 trillion from N5.8 trillion while activities through the ATM rose by 38.2 percent to N3.05 trillion as against N2.20 trillion during the period under review. However, transactions through the chequebook declined by 4 percent to N2.78 trillion compared with N2.89 trillion during the period under review.
“NIP ensures the counterparty, i.e. recipients of the funds, get value immediately, irrespective of the time of the transaction. We at UBA built our electronic banking channels on instant payment modules, thus ensuring that payment objectives of customers are met instantaneously. With increasing adoption of the platform, there will be increased velocity of money and thus higher turnover of cash and underlying transactions,” Rasaq Abiola, head, investors’ relations, the United Bank for Africa (UBA), said.
And with regard to whether a rise in e-payment transactions implies an imminent economic recovery, analysts are however divided on this.
Muyiwa Oni, an analyst with Stanbic IBTC Group, attributed this development to movement of banking transactions from branches to alternative channels.
“Banks are intentionally moving transactions away from branches and onto alternative channels such as ATMs and POS terminals. Hence you will see banks discouraging withdrawals below a certain amount in branches given that ATMs are good alternatives for that. I will argue that the proliferation of banking apps and online banking platforms has also reduced the use of chequebook sacross banks and the explosion of e-payments is not a reflection of economic activity, but banks moving customers to less expensive banking channels to improve their efficiency,” Oni said.
“The e-payment channels are now replacing cheques and cash transactions because they are faster, secure and more convenient. They do not necessarily represent new economic activities,” Abiola added.
Meanwhile, Moody’s Analytics, while evaluating the impact of higher card usage in 70 countries, established that a rise in card usage boosted consumption and hence the gross domestic product of the countries under investigation.
According to their analysts, a “higher card usage contributed an additional $296 billion to consumption between 2011 and 2015, or a 0.1 percent cumulative increase in global GDP during the sample time period. That equals about a $74 billion contribution to GDP each year.
“Real consumption grew at an average of 2.3 percent in the same period, of which 0.01 percentage point is attributable to increased card penetration. This implies that card usage accounted for about 0.4 percent of growth in consumption, as well as an average increase of 2.6 million jobs over 2011-2015.”
Nigerians expect the country to be out of recession latest by third quarter of 2017.
