Commuters shift to digital payments as naira scarcity bites


Commuters are now paying transportation fares through bank transfers and other digital payment options due to the lingering scarcity of the naira notes.

The digital payment system allows individuals to transfer money or pay bills from their bank account to the recipient’s bank account, through the online banking platform or using an Unstructured Supplementary Service Data (USSD) code.

This development comes amid the scarcity of cash in the country occasioned by the redesign of N200, N500, and N1,000 notes.

Yetunde Adetola, a commuter from Lekki Phase 1 in Lagos, said some commercial drivers had started accepting transfers.

“I recently paid bike fare through transfer, and the bike man accepted it,” Ayomide Olaniyi, a student, said.

According to a video posted on Twitter recently, a commercial bus driver was seen calling on passengers heading to Ketu, Ojota, and Mile 12, while holding a PoS device in his hand, to let passengers know that they could make payments for transport fares using debit cards.

Another video also trended on social media last week where the conductor of a commercial bus pasted a flier at the back of his bus urging would-be commuters to pay with their Lagos’ Cowry Card.

BusinessDay also discovered that since the price of the Cowry Card-enabled Bus Rapid Transit (BRT) in Lagos was reduced by 50 percent, many Lagos residents switched from using cash to the Cowry Card to pay for transport fare.

Enitan Azeez, a worker who lives in Ikorodu and commutes to Apapa via BRT, told BusinessDay that has started using BRT because he does not have the money to pay commercial bus drivers.

“With the card, I only need to top up using an app, and this has made transporting within Lagos much easier,” he added.

According to data released by the Nigeria Interbank Settlement System (NIBSS), the volume of transactions performed electronically by Nigerians surged 55 percent in January 2023.

BusinessDay findings show that the number of the NIBSS instant payment system increased to 541 million in January 2023 from 348 million in January 2022, indicating a growing trend towards a cashless society.

Read also: Digital wallets: Things to note on bank transfer hiccups

NIBSS also revealed that registered mobile users in Nigeria did transactions worth N2.37 trillion in January 2023, a 125 percent increase from the previous year.

Godwin Emefiele, governor of the Central Bank of Nigeria, had in October 2022 announced plans to redesign the N200, 500, and N1,000 notes, which he said was necessary to help reduce the amount of cash in circulation and aid the cashless policy.

The naira redesign policy, according to Emefiele, will help to reduce occurrences of terrorism and kidnapping and deepen the country’s push towards a cashless economy

CBN limited daily cash withdrawal over the counter to N500,000 for individuals while corporate organisations are allowed N5 million.

Withdrawals from the ATM were also limited to N20,000 per day; however, following the deadline for the return of the old cash, Nigerians have lamented the unavailability of the new naira notes.