Monday, December 14, 2020 / 10:05
AM /by FBNquest Research / Header Image Credit: Dignitied
The latest data from a NBS series, produced in collaboration with the CBN, reveal that 2.8 billion transactions valued at NGN320trn were recorded on electronic payment channels in Q3 '20. Online transfer transactions dominated the volume of transactions, with 1.5 billion (54% of the total) valued at NGN100.8trn recorded in the quarter.
Internet subscriptions, which are directly correlated with electronic transactions, stood at 151.1 million at end-Q3, according to the Nigerian Communications Commission (NCC). This figure translates into a penetration rate of 76% of the population.
The volume of NIBSS instant payments (NIP) stood at 133 million, or 4.8% of the total volume of transactions. The NIP payment platform is available across Nigerian banks via the mobile USSD channel. The lockdowns forced Nigerians accustomed to cash transactions to use this transaction mode for specific payments and money transfers.
Although movement restrictions have eased, we expect NIP transactions to remain relatively high, given that the newly converted users of this platform are likely to prefer the ease associated with this transaction mode.
In Q3 '20, the volume of PoS transactions stood at 112.1 million, an increase of 30% q/q. The gradual resumption of business activity probably contributed to the increase, after restrictions were lifted. Some providers of home delivery services gave their customers the choice of a PoS terminal or an online transfer.
As for mobile payments, in Q3 the volume of transactions stood at 112 million, compared with 86 million transactions in Q2.
Financial services in developing countries are often expensive, leaving the poorest citizens without access to bank accounts. However, mobile payments' growth has been seen as a way to increase access by allowing individuals to send and receive payments through their phones.
The extent and duration of the economic impact of COVID-19 are still largely uncertain. However, consumers, businesses, banks, payment operators and government agencies are being pushed towards a digital focus that will likely endure beyond the immediate crisis.
Demand for digital tools and technology 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.
Volume of electronic payment transactions (%), Q3 '20
Source: NBS; FBNQuest Capital Research