By Zainab Iwayemi
A total of 2.8 billion transactions with a monetary value of N320 trillion were carried out using electronic payment channels in Nigeria in the third quarter of this year, data released by the Nigerian Bureau of Statistics (NBS) produced in collaboration with the Central Bank of Nigeria (CBN) has shown.
The number pushed online transfer transactions to dominate the volume of transactions, with 1.5 billion or 54 per cent of the total, valued at N100.8 trillion, recorded in the quarter.
This growth is attributable to the growing Internet subscription in the country, with the Nigerian Communications Commission (NCC) stating that Internet subscriptions, which are directly correlated with electronic transactions, stood at 152.93 million at end of October 2020. It translates to an internet penetration rate of about 76 per cent of the population.
The data also revealed that the volume of Nigerian Inter-Bank Settlement System (NIBSS) Instant Payments (NIP) stood at 133 million, or 4.8 per cent of the total volume of transactions.
Lockdowns of the country between March and August, occasioned by the global Covid-19 pandemic forced Nigerians used to cash transactions to use the NIP payment platform as available across Nigerian banks via the mobile USSD channel for transaction mode for specific payments and money transfers.
While the magnitude and duration of the economic impact of COVID-19 are still largely uncertain; consumers, businesses, banks, payment operators and government agencies are being pushed towards a digital focus that will likely endure beyond the immediate crisis.
In developing countries, financial services are often expensive, leaving the poorest citizens without access to bank accounts. However, mobile payments’ growth has been embraced as a way to increase access by allowing individuals to send and receive payments through their phones.
Nigeria’s mobile payments, in the third quarter, saw the volume of transactions at 112 million, compared with 86 million transactions in the second quarter, the NBS data further disclosed.
A quick examination of the data revealed that the volume of point of sale (PoS) transactions stood at 112.1 million at the close of Q3, representing an increase of 30 per cent quarter-on-quarter. The gradual resumption of business activity probably contributed to the increase, after restrictions were lifted. However, some providers of home delivery services introduced to their customers, the option of a PoS terminal or an online transfer.
Also, the demand for digital tools and technologies that enable businesses and consumers to connect is also likely to continue to grow. The current crisis has revealed that not everyone has the same level of access to new technologies and digital tools.
Following the easing of movement restrictions, it is expected that the NIP transactions will remain relatively high, given that the newly converted users of the platform are likely to prefer the ease associated with this transaction mode.