Point of sale (POS) transactions in Nigeria skyrocketed in 2018. A recently released data by the Nigeria Inter-Bank Settlement System (NIBSS) shows that POS transactions in Nigeria was valued at N2.3 trillion in 2018. That’s a whooping 65% growth over the previous year. In 2017 total POS transactions was valued at N1.4 trillion.
More interestingly, it’s not just the value of transactions that has reached new ebbs. NIBSS shows that the volume of POS transactions has nearly doubled over the last 12 months. In 2017, the volume of POS transactions was 146.3 million, but in 2018, total volume of transactions reached 285.9 million. This signifies a humongous 95% growth over the previous year.
Another interesting aspect about the NIBSS report is that POS transaction points have been growing quickly over the last two years. Statistics show that in 2016, there were less than 80,000 active POS terminals in all of Nigeria. However, that number has nearly doubled because at the end of 2018, total active POS terminals were nearly 150,000.
But as stunning as this particular revelations are, there’s actually a negative side. While total active terminals is around 150,000, the total number of inactive terminals has risen even faster. There are now more than 100,000 inactive POS terminals across the country. And this figure actually widened between 2017 and 2018.
Moving on though, the retail sector once again continues to lead in terms of POS usage. According to the data, POS was used 73.9m times in the retail sector in 2018. That represents an 86% growth from figures recorded in 2017. But it’s not clear how much of these retail sales are e-commerce.
By location, unsurprisingly, Lagos represents the biggest POS market in the country as it accounted for 53% of all POS transactions in Nigeria in 2018. Abuja, Ogun, Rivers and Delta are also other top POS locations, although collectively, they account for just 25% of the total pool.
As POS usage grew in 2018, so also did the failed transaction rates. 2018 recorded 27 million failed transactions. But the biggest transaction problems were actually caused by customers. For instance, 19.9 million failed transactions were caused by insufficient funds. Nevertheless, an annoying 8.6 million failed transactions were caused by card issuers and network problems.
Thus, POS in Nigeria shows boundless potentials and is seriously on the rise. However, its use is still not as widespread as it should be. For instance, too much transaction is concentrated in Lagos.
Nevertheless NIBSS says it will increase its customer outreach program to increase appeal for POS usage even further.
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