June 29, 2021 / 10:29 AM / By CSL Research / Header Image Credit: Business Times
The latest data from the Nigeria Inter-Bank Settlement System (NIBSS) shows growth remains remarkably strong across the various e-payments channels in the first five months of 2021 (January - May 2021). NIBSS Instant Payment (NIP) transactions recorded an impressive 106.0% y/y and 107.8% y/y growth in transaction value and volume to N100.3tn and 1.3bn, respectively. For POS transactions, total transaction value and volume grew 52.7% y/y and 66.1% y/y respectively to N2.5tn and 380.1m. The strongest growth was recorded in the mobile transactions category where transaction value and volume grew 170.5% y/y and 111.2% y/y to N2.3tn and 86.7m, respectively.
The sustained growth in e-payments transaction volume and value in Nigeria shows increased adoption of technology in payments and cash transfers by the Nigerian populace. This is driven by increasing internet & mobile penetration as well as investment by banks and other payment-based fintechs investment in payment technology infrastructure. In addition, with the onset of the pandemic, the use of physical cash in settling payments and bills has been discouraged, resulting in significant growth in e-payments transactions.
We expect the e-payments industry to continue to record significant growth. As we highlighted in our FINTECH thematic report (The Nigerian Fintech Industry; the growth frontier of the new decade_ 9 Jan 2020), we believe Nigeria's growth frontier for the next decade is the digital payment & lending business. The growing use of electronic channels in transacting further spurred by the pandemic is poised to serve as the growth frontier of the new decade in Nigeria. The recent plan by the CBN to introduce digital currency will also spur growth in the digital payment space.