The Nigeria Inter-Bank Settlement Systems (NIBSS) has said that in September 2022, e-payment transactions through the NIBSS Instant Payment platform (NIP) hit ₦32.8 trillion which represents a 1.2% decline from the ₦33.2 trillion recorded in August.
However, experts believe that the worsening economic downturn in the country contributed to the decline.
It said the value of e-payment transactions is responsible for the rise in the volume of deals within the month. The NIP volume rose to 438 million in September 2022, which represents a 48% increase over 296 million recorded in the same period last year.
Earlier this year, the NIBSS reported that e-payment transactions grew by 40% to ₦205.4trn in H1 2022 — a 40% increase from the ₦145.8 trillion recorded in the same period last year.
More Nigerians go cashless
In 2012, the Central Bank of Nigeria (CBN) kicked off the cashless policy to reduce the amount of physical cash in circulation in the country. The apex bank had sought to encourage the use of electronic platforms for settlement or payment for goods and services.
The CBN in September 2019 released circular directing deposit money banks to implement the cashless policy. The move, interestingly, attracted a lawsuit which was eventually struck out by the court in April this year.
A look at the NIBSS figures shows exponential growth in the use of electronic platforms by Nigerians. There is no gainsaying that the CBN cashless policy has gained traction over the years. The apex bank recently disclosed that the value of electronic transactions in Nigeria rose by 50 per cent year-on-year to ₦330 trillion in December 2021 from ₦198.61 trillion at the end of December 2020.
No wonder experts said the surge in the volume of e-payment transactions means that more Nigerians are going cashless. And the number of e-payment transactions is projected to grow in the coming years, thanks to the rise of e-payment platforms and fintech companies.
In its 2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the Budget Office of the Federation projects that the Federal Government will generate ₦484bn from e-payment channels.
A look at e-payment transactions by months
- In January, transactions worth ₦26.6 trillion were recorded in January. Year on year, this showed a 43.7% increase compared with ₦18.5 trillion recorded in the same month of last year.
- In February, deals worth ₦27.2 trillion were sealed over the electronic platform. Compared with February 2021, when ₦18.3 trillion was recorded, this represented 48.6% growth.
- In March, NIP recorded ₦31.8 trillion in transactions, a 44.5% increase over the ₦22 trillion recorded in the same month last year.
- In April, the value of transactions on the NIP platform stood at ₦29.2 trillion. This also shows a 41.6% increase over the ₦20.6 trillion recorded in April 2021.
- In May, the value of e-payment transactions stood at ₦29.6 trillion, a 43% increase compared with ₦20.7 trillion recorded in the same period last year.
- The NIP transactions rose to ₦31.7 trillion in June 2022, a 37% growth over ₦23.1 trillion posted in 2021.
- In July, provided data reflected a 31% increase from ₦22.4 trillion in 2021 to ₦29.3 trillion this year.
- In August, the value of e-payments in Nigeria rose to a monthly all-time high of N33.2 trillion, representing a 50% increase when compared to N22.1 trillion recorded in the same period last year.
Related article: Is NIBSS NQR really the solution to Nigeria’s e-payments puzzle?
But, e-payment is under threat
As more Nigerian businesses and individuals embrace e-payment platforms, there has been an upsurge in the number of internet fraud cases, leaving users at risk of becoming victims. The Nigerian Communications Commission (NCC), recently identified e-fraud as the greatest threat to digital finance in the country.
According to a 2021 fraud report from the NIBSS, the recorded overall fraud attempts in Nigeria increased by 187% between 2019 to 2020. This alarming situation, of course, calls for concern as it affects the reliability of e-payment platforms.
A university don recently advised the CBN to review the regulation of e-banking services and mandate banks to deploy advanced tools and technology, which could adequately protect customers against falling prey to fraudsters. We hope the apex bank listens to her.
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