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Value of POS transactions declines by N30 billion in August

Value of POS transactions declines by N30 billion in August

The value of total Point of Sale (POS) transactions in Nigeria declined by nearly N30 billion or seven percent to settle at N386.4 billion in the month of August, from N416.7 billion recorded in July.

The new data released by the Nigeria Inter-Bank Settlement System (NIBSS) showed that while there was a decline from the previous month, the value represented growth on a year-on-year basis. The value in August 2019 was N294.036 billion.

The volume of transaction failed to keep up as the month of August saw a drop of over 3 million or nearly 6 percent at 50.7 million from 53.9 million recorded in the month of July. In March, the month before the COVID-19 pandemic lockdown, volume of transactions surged to 52.249 million.

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The drop may not be unconnected to the impact of the COVID-19 pandemic on the income of many individuals and businesses. August also saw a surge in the number of POS terminals registered across the country. There are 570,601 terminals now registered up from 548,592 recorded in July. The number of terminals deployed stands at 372,330.

Niyi Toluwalope, managing director and CEO of E-Tranzact told BusinessDay in an interview that the payment trend is gradually evolving and cards are yielding the ground to mobile applications and Unstructured Supplementary Service Data (USSD) channels. The NIBSS report found that mobile transaction volume dropped in August by 2.0 percent to 11.09 million from 12.22 million in July while the value shrank by 8 percent to N253.1 billion from N275.12 billion in July.

The attraction of the USSD channel is the ease of use, adaptability, and the fact that customers with any type of phone can easily make a payment without the internet.

A major challenge for POS terminals is unreliable internet which affects the chains of transaction settlement. The NIBSS real-time monitoring platform shows that daily transaction failures continue to be above 15 percent. As at press time, over 170,000 transactions out of 1 million were failed transactions.