The growth of e-payment this year has been impressive with tractions hitting a record N58.8tn in Q1 alone. However, it appears that some challenges in the sector have caused its growth to slow down.
According to Nigeria Interbank Settlement System (NIBSS), the volume of NIBSS Instant Payments (NIP) transactions which includes channels like point of sale (POS), USSD, Internet banking and mobile apps dropped to 265 million in April.
This represents a 3.6% reduction from 275 million recorded in March but a whopping 147% increase from the 107 million that was transacted in April last year during the pandemic.
The drop in online transaction in April is the first drop since the beginning of the year
Similar to the volume, the value of NIP transactions also dropped during the month. The 265 million NIP transaction recorded was worth about N20.68 trillion.
This represents a 6.05% drop from the N22.02 trillion in March but an impressive 195% growth from the N7.01 trillion transacted in April 2020.
The huge increase in volume and value from April 2020 numbers show just how much online transaction has rebounded over the last 12 months.
However, the drop between March and April also shows that the adoption is slowing down. Below is a breakdown of some possible reasons.
Disruption of ATM Cards
The drop in online transaction cut across all channels. POS had one of the highest dips as the volume of POS transactions fell 4.1% to 77.6 million. The value of transactions also fell by 4.42% to 507.8 billion during the month.
The drop could have been caused by several disruptions to the ATM card of some banks. During the month of April, customers of Zenith and Kuda bank were among those who reported difficulties using their ATM cards for ATM services like POS.
Drop in spending power
Like POS, the volume of the transaction using the Mobile channel dropped during the month. A total of 18.36 million transactions were performed, about 13,000 less than the 18.3 million done in the previous month.
While the volume of mobile transactions fell, the value of transactions that took place within the period increased slightly. A total of N502 billion was exchanged in transactions, up 4.5% from the N480 million recorded in March.
The increased value and reduced volume show that the average money sent per transaction increased. This can be translated to the fact that the number of people that have high spending power to make transactions have reduced.
This is unsurprising as the continuous devaluation of the Naira and the current economic situation in the country has been reducing the general spending power of Nigerians.
4 months SIM ban
The continuous growth of digital banking and online transaction is dependent on the growth of the country’s internet population.
The ban of SIM card sale that lasted about 4 months slowed down the growth of internet adoption in the country.
Although the ban has been lifted, the cumulative effect of the long ban on subscriber growth could have indirectly had a significant caused drop in April.
In summary
Despite the drop in April, the overall trend of growth across years show that adoption should bounce back in May.
While the reason for the drop in some channels still exists, some major ones like the SIM Ban have been addressed
Similarly, many industry experts believe that the adoption of e-payment will still persist further, even though it was initially fueled by the constraints of COVID-19 Lockdown.
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