Thursday, March 24, 2016 8:55AM /FBNQuest Research
Data from the CBN’s latest Annual Report (2014) reveal that the volume of electronic payments surged by 41% y/y to 456 million while the value increased by 39% y/y to N4.4trn (US$22.1bn).
The CBN commentary attributed the significant rise in e-payment transactions to improved public awareness on the back of sensitisation campaigns as well as increased consumer confidence in the utilisation of e-payment channels. A recent study conducted by Moody’s Analytics showed that e-payment usage contributed N127bn (US$638m) to Nigeria’s GDP over the 2011-2015 period.
The Moody’s study also showed that increased use of e-payment raised household consumption by an average of 0.2% per year across the countries covered.
ATM remained the leading channel for transactions, accounting for 88% of the total volume in 2014.
According to the Nigerian Communications Commission, internet subscriptions stood at 96 million in January 2016. This translates to internet penetration of 56%. That said, we suspect the low volume of transactions recorded on the web (1.2% of the total) in 2014 was partly due to concerns surrounding fraudulent activities.
This month, the Nigeria Inter-bank Settlement System (NIBSS) recognised Interswitch Limited (an Africa-focused integrated digital payments and commerce company) as the most efficient Payment Terminal Service Provider (PTSP).
The Kaduna state government announced recently that it had replaced physical collection of taxes with e-payment methods to block leakages in revenue collection. The FGN is also exploring ways to boost non-oil revenue through this platform as well.