POS usage rises 91% in three years as Nigerians embrace agent banking

Nigeria’s volume of Point of Sale (POS) transactions has increased by 91 percent in three months, according to data from the Nigeria Inter-Bank Settlement System (NIBSS).

The country’s POS transactions jumped from 7.94 million in 2017 to 91.38 million in October 2021 as March, June, September, and October 2021 saw the most volume growth.

Experts say this is due to the prevalence of mobile banking agents and increasing adoption.

The value also recorded growth in the period under review, from N91.29 billion to N552.262 billion. Similarly, the months where the most records in terms of value are reflected include March, July, and September.

Although there was a decline in the first two months of Q1, 2021, the value of PoS transactions increased by over 62 percent in the third month. While Q2 and Q3 had slight rises and dips here and there, Q4 shows a bounce-back start at N552.262 billion.

Experts attributed the decline in PoS transactions to fraud, and as other alternatives to receiving money are springing up, users are seen drifting to these options including transfers via quick response (QR) code, hard cash, wallets, among others.

Read also: Here’s what it cost to start a PoS business in Nigeria

“There have been several publications on issues of PoS fraud in agent banking. This has made people withdraw from the use of PoS for transactions because perpetrators of the crime are forcing customers to withdraw from using PoS services,” President, Association of Mobile Money and Bank Agent in Nigeria (AMMBAN), Olojo Tobi said.

In terms of total PoS terminals registered, the numbers have continually increased from the month of February to July, having the highest number at 986.252 in the same month. While the numbers of total PoS terminals deployed have greatly increased over the years, it has also seen continuous growth since the beginning of 2021 till date.

Agents in the PoS business also attributed the decline to the harsh economic reality faced by many Nigerians amid rising inflation rates. The effect of this inflation is that it has essentially reduced the purchasing power of Nigerians as they cut spending to cope with the harsh economic realities, bringing PoS users to pay less more frequently.

While the number of registered PoS terminals has significantly increased over the years under review, it equally saw an increase in the first four months without a record for May and an increase of 95 percent between July and August.