The gains of Nigeria’s financial inclusion drive are becoming more evident with the latest electronic payment statistics obtained from the NIBSS website showing that Nigeria’s E-payment landscape is experiencing a steadfast surge, as businesses and individuals enthusiastically embrace digital channels.
The data reveals a striking 89.3 percent year-on-year upswing in the total value of transactions processed through the NIBSS Instant Payment System (NIP).
This figure soared to N234.50 trillion in Q1 ’24 from N123.9 trillion in the comparable period of 2023, further soaring by 20.5 percent quarter on quarter from N194.6 trillion in Q4’23.
Financial experts at Cowry Asset said this remarkable growth can be attributed to the robust expansion of Nigeria’s electronic transaction platforms, and the improved transition to electronic payment and the adoption of electronic channels of payment.
They noted that the electronic payment ecosystem within Nigeria has witnessed a remarkable expansion in recent years, propelled by several drivers, with the apex bank playing a pivotal role and evidenced by a substantial 72 percent surge in the total monthly average value and volume of payment transactions, which reached N83.33 trillion by the end of March 2024, marking a significant ascent from the N48.3 trillion in March 2023.
“This metric also exhibited a 97% surge from N42.03 trillion in December 2022 when the cash crunch experienced in early 2023 started. Central to this narrative is the 2020 inception of the National e-Payments Strategy (NEPS) by the Central Bank of Nigeria (CBN), an ambitious endeavour aimed at transforming Nigeria into a cashless society by 2025,” Cowry said.
Key initiatives under NEPS include the introduction of a national instant payment (NIP) platform and the establishment of a mobile money ecosystem.
This strategic impetus has yielded tangible benefits, including enhanced security and efficiency in cash payment processes, thus facilitating substantial cost savings for both businesses and individuals in turn.
“The surge can be attributed to the adoption of fintech by Nigeria’s growing population.”
Notably, point-of-sale (PoS) transactions demonstrated a downturn of 7.92 percent year on year, reaching N2.62 trillion by three months ended 2024, compared to N2.84 billion during the same period last year.
The total mobile money transactions exhibited a substantial acceleration, particularly in 2024, surging to N17.13 trillion.
This marks an 88.2 percent year-on-year increase from N9.10 trillion in the first quarter of the previous year and a 159 percent remarkable surge from N6.60 trillion as of the quarter ended, December 2023.
The surge can be attributed to the adoption of fintech by Nigeria’s growing population. Additionally, as the need for financial services maintains its growth across the country individuals and businesses get captured into the banking system database.
Consequently, data on Bank Verification Number (BVN) enrolment revealed that as of April 2024, the total count was 61,605,261 individuals.
This marked a noteworthy uptick of 1,449,901 registrations over the span of four months, compared to the figure of 60,115,360 people recorded at the close of 2023.
Meanwhile, a total of 219.65 million bank accounts remain active across banks while 19.80 million accounts have remained inactive as of March 2024 while 22.94 million accounts have been closed.
Cowry Research opines that the surge in e-payment volume and value holds promising implications for Nigeria’s economy, and remains poised to foster reduced cash usage, help improve the financial inclusion drive, and augment economic growth.
However, efforts by the regulatory authority to ensure data privacy and integrity across banks as well as payment channels will further enhance confidence in the adoption of electronic payment gateway for all financial transactions.
