April 23, 2020 / 10:24 AM / By FBNQuest Research / Header Image Credit: Technext
The latest data from a NBS series, produced in collaboration with the CBN, reveal that 894 million transactions valued at N49trn were recorded on electronic payment channels in Q4 2019. NIBSS instant payments (NIP) dominated with a volume of 343 million. The NIP payment platform is available across Nigerian banks via the mobile USSD channel. Internet subscriptions which are directly correlated with electronic transactions stood at 126 million at end-December, according to the Nigerian Communications Commission (NCC). This translates into a penetration rate of 64% of the population.
In Q4 2019 the volume of PoS transactions stood at 121 million, representing an increase of 7% q/q. Usage of PoS terminals is one way to track the progress of the CBN's cashless policy. We understand that due to the current lockdown in Nigeria PoS transactions have experienced hiccups.
For Lagos and Abuja, there is now a limited timeframe each day for residents to embark on their grocery shopping. Local newswires report that there were 176,000 failed transactions via PoS on 07 April. This data was ultimately derived from the Nigeria Inter-Bank Settlement System (NIBSS).
As for mobile payments, in Q4 the volume of transactions through this platform stood at 159 million. There were 185 million active mobile lines recorded in the same quarter by the NCC.
Volume of electronic payment transactions (%), Q4 2019
Sources: National Bureau of Statistics (NBS); FBNQuest Research
We expect the next release of data in this series to show a considerable pickup in electronic transactions. The restrictions on movement due to the Covid-19 pandemic will surely trigger e-payment growth, with increasing transactions via mobile apps, mobile USSD or internet banking.
One clear upside of this pandemic has been the heavy reliance on technology, especially in developing countries. For instance, the local media has reported that a Brazilian central bank app is making transfers to the poorest in the country. Apart from the efficiency this provides, it also creates transparency. The FGN may wish to consider exploring this approach.