Despite the pandemic, 2020 was a record-breaking year for Point of Sale (POS) use in the country. According to Nigeria Interbank Settlement System (NIBSS), Nigerians transacted about N4.72 trillion using POS machines in 2020.
This is a significant 47.5% increase from the N3.2 trillion recorded during the previous year. That’s not all, the growth in terms of monthly transactions was also huge. The record shows that the highest POS value in a month is 54.1% higher than that of 2019.
This incredible growth could be attributed to many factors but the most obvious is the adoption of contactless payment by government agencies while encouraging businesses to do the same.
50% Increase in Volume of POS Transactions
Similar to the value, the volume of PoS transactions carried out during the year was also phenomenal. NIBSS reported that the total volume of POS transactions increased to 655.7 million, a whopping 49.49% higher than the 438.6 million recorded in 2019.
Its monthly high was even more impressive, with the volume recorded being 68.8% higher than any monthly volume of the previous year.
An evaluation of the report showed that December had the highest volume and value of PoS transactions during the year. The volume of payments for the month was pegged at 77.90 million while the value stood at a record highest of N574.367 billion.
However, the year was not a smooth ride of progressive growth for POS use. In fact, the year started quite slowly with the value of transactions falling from N372.68 billion in December 2019 to N313.42 billion by the end of January 2020.
The drop came on the back of a N50 charge imposed on PoS transactions by the Federal Government.
However, this is not the first time the value and volume of POS have dropped at the beginning of a year. In January 2018 and 2019, the value of POS transaction dropped by N15.48 billion and N49 billion respectively.
This means that the drop was most probably due to the drop in spending after the end of the festive “Detty December”.
POS survives Covid-19 Lockdown
From January, the volume of PoS transactions rose gradually to top 2019 numbers in March with over 52.2 million. However, the COVID-19 lockdown in April caused a drop of more than 20%. This resulted in an all-year low of 40.85 million.
This was because most businesses that use PoS for transactions were forced to shut down their operations and close up their physical offices following the restriction of movement ordered by the government.
However, the shutdown wasn’t all bad for POS as most logistics and dispatch companies like Jumia logistics that were active during the lockdown promoted the use of contactless delivery of e-commerce goods.
As businesses return back to their regular operations in July, the volume of transactions carried out using Point of Sale (PoS) machines started to recover.
There was a slight dip the following month but the numbers rose again to fully recover in September with over 58 million transactions.
Francis, a banking industry expert believes the increase could be due to Merchants and vendors embracing more contactless methods of transaction like the POS. This was an aftermath realisation of the need post-COVID19.
Over 230,000 Registered but Undeployed POS Machines
Aside volume, the number of POS machine deployed also increased post-COVID. According to NIBSS, over 156 thousand POS machines were deployed during the year.
This is significantly higher than the 85, 879 deployed in 2019. The increase was driven by the adoption of POS payment options by merchants, especially with threat of the still spreading COVID-19 virus.
In total, over 690,000 POS machines have been registered but only 459,285 has been successfully deployed in the country. This means that more than 230,000 POS machine are registered but not deployed.
While the NIBSS didn’t give a pubic explanation for this, the increasing number of registered but not deployed machines is alarming. In the last year alone the number has increase by over 61%.
The use of POS grew incredibly in 2020 and most probably will continue in 2021. The promotion of contactless payment among other things like the increase in POS kiosks around the country will continue to fuel its growth.
However, if the country enters into another lockdown as a measure to curb the continuous spread of COVID-19 virus, there will most probably be a considerable drop in numbers like that of April 2020.
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