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Nigeria’s e-payment industry records steady growth as Q1’23 figure soars to N124trn


Nigeria’s e-payment landscape is experiencing a steadfast surge, as businesses and individuals enthusiastically embrace digital channels.

Latest data from the Nigerian Interbank Settlement System revealed a striking 44.7 percent year-on-year upswing in the total value of transactions processed through the NIBSS Instant Payment System.

This figure soared to N123.9 trillion in Q1 ’23 from N85.63 trillion in the comparable period of 2022, further escalating by 7.3 percent Q-o-Q from N115.52 trillion in Q4’22.

This remarkable growth, according to the NIBSS, could be attributed to the robust expansion of Nigeria’s electronic transaction platforms, coupled with the burgeoning trend of online shopping adoption.

Cowry Asset Research disclosed 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 52 percent surge in the total value and volume of payment transactions, which reached N48.33 trillion by the end of March 2023, marking a significant ascent from the N31.8 trillion in March 2022.

This metric also exhibited a 15 percent surge from N42.03 trillion in December 2022.

Central to this narrative is the 2020 inception of the National e-Payments Strategy by the Central Bank of Nigeria, an ambitious endeavour aimed at transforming Nigeria into a cashless society by 2025.

Key initiatives under NEPS include the introduction of a national instant payment 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 enterprises and individuals. Presently, the CBN has introduced several proactive measures to foster e-payment adoption. The Quick Response (QR) Code payment system enables seamless payment for goods and services through smartphone-based QR code scanning,” Cowry Asset Research noted.

Additionally, the National Switch, an innovative payment platform connecting banks and financial institutions, streamlines cross-bank transactions.

“Notably, point-of-sale transactions demonstrated a noteworthy 60.3 percent YoY upswing, reaching N1.15 trillion by March 2023, compared to N718.6 billion during the same period last year”

The surge in e-payment volume and value holds promising implications for Nigeria’s economy, poised to foster reduced cash usage, improved financial inclusion, and augmented economic growth.

Notably, point-of-sale transactions demonstrated a noteworthy 60.3 percent YoY upswing, reaching N1.15 trillion by March 2023, compared to N718.6 billion during the same period last year.

The total mobile channel transactions exhibited a substantial acceleration, particularly in 2023, surging to N4.14 trillion.

This marks an impressive 209 percent YoY increase from N1.34 trillion in March the previous year and a 66 percent surge from N2.49 trillion in December 2022.

The overall value of mobile transactions witnessed a remarkable 160 percent YoY leap to N9.1 trillion in Q1 ’23.

Although the e-bills pay platform, a facilitator of bill payments, experienced a 55% YoY decline in March 2023, amounting to N116.52 billion from N260.87 billion in the previous year, the YoY total value of transactions in this channel dwindled by -46 percent to N372.3 billion in Q1 ’2023.

In contrast, payments through cheques registered a 19 percent MoM increase to N283.4 billion, yet declined by -3 percent YoY, signifying a discernible shift towards electronic payment alternatives.

“In our view, the confluence of technological evolution, a thriving e-commerce sector, expanding population, escalating internet penetration, smartphone ubiquity, and the CBN’s steadfast commitment to achieving 70 percent financial inclusivity among underserved individuals in Nigeria has paved the way for remarkable growth in electronic payment mechanisms.

“This trajectory, coupled with the ongoing e-commerce expansion, positions Nigeria on the cusp of an era dominated by sophisticated digital payment methods,” analysts at Cowry Asset Research disclosed.

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