BY CHARLES ABUEDE
The introduction of the cashless policy by the Central Bank of Nigeria (CBN), the continuing impact of technology and adoption of mobile banking in Nigeria, are contributing significantly to the shift by Nigerians to the use of electronic transfer as one of the preferred methods or channels of payments in the country since the emergence of the coronavirus pandemic.
As a result, the efficacy of the policy has brought improvement in the use of financial services with the adoption of cashless transactions in the first four months of 2022 rising by 44 percent year on year to N117.33 trillion, according to data from the Nigeria Inter-Bank Settlement System (NIBSS).
An analysis of the data from the NIBSS shows that the N117.33 trillion processed through electronic channels between January and April translates to N35.79 trillion more than the N81.54 trillion processed in the corresponding period of 2021. These transactions are monitored by the apex bank, NIBSS through the Nigerian Instant Payment System (NIP) and Point of Sales (PoS) terminals.
The NIBSS data also appears to point to some positives from the coronavirus pandemic as it seems to have led to an increased adoption of the internet which has then aided the switch by Nigerians to the use of virtual banking channels and platforms for their day to day transactions. Consequently, the ease, convenience and fast way of payments through internet-enabled smartphones have brought about the growth in the channel of payments.
However, even though there has been a glaring shift, the increase in the numbers as shown in the data only indicates a gradual yet inevitable shift towards an electronic-based economy, from a cash-driven economy.
According to the NIBSS data, the month of January this year saw the sum of N27.22 trillion processed electronically across the country, which increased through to February, which recorded N27.76 trillion. March and April recorded N32.5 trillion and N29.84 trillion, respectively. These numbers edged above the amounts reported in the same period of 2021 where in January last year, N18.99 trillion was processed electronically, N18.79 trillion was processed in February, N22.55 trillion was processed in March, and N21.19 trillion was processed in April.
The NIBSS data also showed that with the sustained growth from the adoption of electronic banking across the country since the emergence of the pandemic, the data recorded 1.88 trillion times as the number of times transactions through electronic channels were used in the first four months of 2022, representing an increase of 44.26 percent year on year, from 1.3 trillion times reported during the year 2021.
As the NIBSS noted in a 2020 annual statistical report, “COVID had changed the e-payments landscape, and hastened the adoption of instant payments as people switch to electronic channels for funds exchange.”
Also, Lilian Phido, head, corporate communications, NIBBS, commenting on the rise in transactions via electronic channels, said, “It is very clear that more and more people are accepting the channels of payment that are available and the platforms are stable. With stability, these components have grown. With stability more and more people are moving.”