The number of POS transactions in the country rose to an all-year high of 68.4 million in October, according to the NIBSS Report. This shows a record-breaking monthly addition of over 10 million transactions in the last month alone.
An investigation by Technext revealed that the increase in volume and value of POS was driven by a new wave of adoption of neighbourhood POS Kiosks for daily cash withdrawal by Nigerians.
Mrs Obiaguna, a POS Kiosk owner revealed that the number of people that have patronised her for cash withdrawal has tripled in the last few weeks. She added that she has to go to the bank every few days now to restore her cash bank.
She isn’t alone as several other POS kiosk attendants expressed a similar trend of increasing number of customers.
Drop in number of dispensing ATM
The Nigerian economy is still cash-dependent as most transactions are done with fiat currency. The number of ATMs in the country has, however, not been able to meet with the high demand for cash.
Sandra, a student told TechNext that she had to visit at least 5 different banks before she found a working ATM to withdraw from. She is also not alone as several Nigerians have complained about the difficulty of finding dispensing ATMs.
This demand gap has pushed more Nigerians to turn to POS kiosks for their cash needs. The NIBSS report showed strong cash movement on POS as the value of transactions on POS spiked to reach N460.9 billion in October. This shows that over N55 billion was moved in October alone.
A 2019 study put the total number of ATMs in Nigeria at 17,518
Francis, a Banker confirmed that there was a drop in the number of active ATMs in the country. He explained that several issues like mutilated notes which jam machines, irregular supply of cash, power issues especially offsites can cause an ATM to stop working.
He added that the ATM business is sparsely profitable compared to other channels, as cost of maintenance is high and profit is usually shared by 3 parties – Terminal owner, Card issuer, and Switch companies like Interswitch.
This means that banks will probably not be in a hurry to provide regular maintenance or repair of an ATM machine if it is damaged.
Increasing Number of POS Kiosks
Unsurprisingly, a considerable number of new POS Kiosks have sprouted in the last few months. The NIBSS report shows that in October alone, over 32,000 new POS devices were registered with over 23,000 deployed across the country. The total number of deployed POS devices now stands at 420,850.
In 2020 alone, over 117 thousand POS machines have been deployed in Nigeria
Dre, an upcoming musician, in chat pointed out that he has seen at least four new POS Kiosks in his area in the last month. Although he said he doesn’t patronise them, he revealed that a lot of people patronise the kiosks.
Nigerians turning to POS Kiosks for cash withdrawal shows an unusual albeit positive effect of Nigeria’s dependence on cash.
The all-round increase in POS usage in the country not only means that Nigerians are accepting digital forms of payment, but also that the popularity of POS is growing.
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