e-Payment fraud and inflation saw value of PoS transactions in Nigeria drop by N49.8bn in August
Point of Sale (PoS) transactions in the country suffered a huge decline in August. According to data from the Nigeria Interbank Settlement System (NIBSS), the volume of PoS transactions carried out during the month was 75.6 million. This is a 7.4% decrease from the 81.6 million transacted in July.
This is reportedly the lowest PoS volume in six months despite a 3.9% rise in registered PoS terminals. Similarly, the value of transactions for the month fell by an outstanding 9% (N49.8bn) to N504.9 billion, down from N554.7 billion recorded in July.
Analysts attributed this decline to the harsh economic reality faced by many Nigerians amid rising inflation rates. Prices of consumer goods have continued to increase although annual inflation in the country fell from a four-year high of 18.17% in March to its current 17.38%.
The effect of this inflation is that it has essentially reduced the purchasing power of Nigerians as they struggle to cut spending to cope with the harsh economic realities. As such, POS users are paying less more frequently.
Another reason is the increasing spread of PoS fraud. The President of the Association of Mobile Money and Bank Agent in Nigeria (AMMBAN) Olojo Victor, told Vanguard that perpetrators of the crime are forcing customers to withdraw from using PoS services.
“Another reason (for the decline in PoS transactions) is PoS fraud. There have been several publications on issues of PoS fraud in agent banking. This has made people withdraw from the use of PoS for transactions,” he said.
e-Payment suffer general decline in August
Overall, e-payment in Nigeria witnessed a decline in the month of August. The volume of e-payment transactions fell from N402.3 million in July to 397.9 million in August, representing a fall of 1.09%. The value of e-payment transactions also suffered a colossal N190 billion loss, falling to N23.97 trillion in August 2021 from N24.16 trillion in July.
The value of NIBSS Instant Payment (NIP) also suffered a slight 1.2% dip from N22.4 trillion in July to N22.13 trillion in August. The volume of NIP transactions fell by 0.1% to 293.98 million from 294.3 million in July.
It isn’t all gloom for the e-payment space though as several channels of transactions enjoyed some appreciation. Mobile Interscheme for instance enjoyed an increase in the value of transactions, rising by 8% to hit N719.4 billion in August, up from N665.2 billion in July. The volume of transactions also increased by 4% to 26.6 million from 25.6 million in July.
Cheque transactions also witnessed an increase, rising by 7% to clock N265.4 billion in August, up from N248.6 billion in July. Its volume also surged by 6% to hit 366,002, up from 344,621 in July.
The President AMMBAN also noted that members of the public are gradually migrating to alternative channels of payment such as Quick Response (QR) code and even hard cash. This might also be a reason for the decline in PoS transactions.
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