In April 2020, Nigeria recorded an increase in online activities, but this did not translate into a corresponding rise in financial transactions online. However, recent data from Nigeria Inter-Bank Settlement System, NIBSS has revealed that the third quarter of 2020 witnessed a surge in the volume (up to 2.5 million in Q3 2020) as well as the value (up to 44.3 trillion in Q3 2020) of online transactions in Nigeria which points to an improvement in economic activities after it recorded a massive drop during the COVID-19-induced lockdown.
During the lockdown Instagram live was embraced as the new television, thus, it led to a drastic push in the number of Internet users which increased by 2.5 million. Despite the increment, online transactions fell by $10 billion.
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As economic activities resumed in May, the figure began to improve with the gradual return of economic activities cutting across all NIBSS Instant Payments (NIP) channels such as the point of sale (POS), USSD, Internet banking, mobile apps, etc.
Online transactions hit 569 million by the end of Q3 2020, up 41 percent from 403 million in Q2 2020 rising from 29.6 trillion to ₦44.3 trillion, a 50 percent improvement. Data obtained from the NIBSS also shows that Nigerians saw major high-value transactions as the average transaction value for this period was ₦78 billion compared to ₦73 billion in Q2 2020.
The volume and value of POS transactions further increased as more merchants embraced contactless payments driving POS usage up from 138 million in Q2 2020 to 162 million. The value of these transactions was ₦1.2 trillion compared to ₦995 billion in the preceding quarter.
Similarly, in comparison with the Q3 2019, the NIP transaction numbers rose significantly as 299 million online real-time transactions were recorded, compared with the numbers for the same quarter in 2020 at 569 million which shows a 90 percent increase in transaction volume in just one year. The value however, significantly soared by 70 percent from ₦26.18 trillion.
In addition, the average transaction value stood at ₦87.5 billion in Q2 2019, but it dropped to ₦78 billion in Q3 2020. This translates into the fact that Nigerians are gradually embracing more high-volume and low-value transactions across major NIP channels.
NIBSS reports also shows that Lagos, Rivers, Ogun, and Oyo states and FCT, which happen to be among the six state that the CBN chose to kick-start another version of its cashless policy in 2019, recorded the highest number of transactions in 2018 and 2019.
Mobile phones and tablets are the major channels used for NIP transactions. Mobile phones and tablets were responsible for 77 percent of instant payments between January and June 2018. By 2019, this figure increased to 80 percent. In the first half of 2018 mobile banking recorded the highest usage with 132 million transactions; USSD followed closely with 109 million transactions. NIPSS report shows.
Also, the volume for mobile banking surged to 220.8 million and USSD to 188.9 million in 2019. The Nigerian Communications Commission (NCC) places the number of Internet users at 149 million as of August 2020. This depicts a 26.5 million increase from August 2019.
Finance February 4, 2021