Digital Payments Sustains Surge; Affirms Growth Prospects


Thursday, February 27, 2020 11:18 AM / By CSL Research / Header Image Credit: Cellulant

According to data published by the Nigerian Inter-Bank Settlement System (NIBSS), volume and value of POS transactions grew 46.7% y/y and 40.6% y/y to 41.3m transactions and N313.4bn respectively in Jan 2020. However, on a q/q basis, volume and value of POS transactions declined 10.5% and 15.9% q/q from December 2019's figures. In addition, volume and value of mobile payments increased 914.5% and 396.6% y/y to 7.4m transactions and N133.2bn but declined 10.7% and 10.6% q/q respectively.

We note that the decline in January 2020 relative to December 2019 was expected as transactional activities usually receive a boost from spending associated with the festive period. In our view, the robust y/y growth was driven by greater adoption of digital platforms among the populace and increased investments by players within the sector.

We recall the Federal government raised VAT and introduced stamp duty charges of N50 per N1,000 transaction value carried out via POS terminals in Q4 2019. We expected this to impact on the willingness of Nigerian consumers to use POS terminals but this was later revised by the CBN to N50 on a minimum of N10,000 transaction value. We think the decision of the apex bank helped in sustaining the gains recorded in the sector.

We note that the aggressive expansion embarked upon by key players including Banks and fintech players has contributed to the growth in digital payments. Banks and regulators likewise have increased awareness of these alternate digital payments platforms particularly in rural areas as part of the financial inclusion drive. POS terminals availability has continued to improve with POS terminals deployed growing 37.3% y/y to 306,409 terminals.

Proshare Nigeria Pvt. Ltd.

As we highlighted in our FINTECH thematic report, we believe Nigeria's growth frontier for the next decade is the digital payment & lending business.

Proshare Nigeria Pvt. Ltd.

Related News

  1. Are We Ready for a Cashless Society?
  2. Nigerian Telecoms Industry - Diving into Nigeria's New SIM Card Policy
  3. Gen Z and The Coming Telecom Wars: Understanding Nigeria's New Consumer Telco Market
  4. Are Online Lending Companies Better Than Banks?
  5. MTN Nigeria Communications Plc Resolves Legal Action Against AGF and Minister of Justice
  6. Broadband Penetration Set to Improve; Internet Subscriptions Stood At 125.7m In December 2019
  7. AIRTELAFRI Signs Strategic Partnership With Western Union
  8. Broadband Penetration Set to Grow
  9. MTN Nigeria Communications Plc Notifies of Withdrawal of Demand by the AGF
  10. Africans Face Most Expensive Internet Charges In The World
  11. Uptick in GSM Internet Subscription By 15% YoY To Stand At 123.2m
  12. Active Voice Subscribers Grew By 2.96% QoQ in Q3 2019 - NBS
  13. A Comparative Look Into Money Transfer Services In India
  14. International Digital Money Transfer Transactions To Reach 2bn By 2024
  15. Banking Sector Records 800.21m Volume Of Transaction In Q3 2019 - NBS

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
Related News