Electronic payment transactions in Nigeria surged to an unprecedented high, reaching the N600 trillion mark in 2023, representing a remarkable 55 percent increase from the previous year’s figure of N387 trillion.
This significant rise was disclosed in recent data released by the Nigeria Inter-Bank Settlement System (NIBSS), underscoring the nation’s accelerating transition towards a cashless economy.
The data further revealed a substantial increase in the total value of point of sale (PoS) transactions, which amounted to N10.73 trillion in 2023 compared to N8.39 trillion recorded in 2022, indicating a notable growth rate of 27.85 percent.
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March 2023 emerged as a standout period, witnessing an unprecedented peak in e-payment transactions, with a staggering volume of 1.17 billion transactions, closely followed by December, which recorded 968 million transactions. This surge speaks of the growing reliance on electronic payment systems by Nigerians.
A detailed breakdown of the monthly analysis of electronic transaction values in 2023 sheds light on the evolving trends throughout the year. January commenced with transactions amounting to N38.8 trillion, setting a robust pace for the months ahead. Subsequent months saw fluctuations in transaction values, with March witnessing a substantial surge to N48.3 trillion, attributed largely to the prevailing scarcity of cash during that period.
The momentum continued in the following months, with April recording N41.3 trillion in transactions and May witnessing a further increase to N45.9 trillion. Notably, June saw a marginal decline to N45.3 trillion, followed by a significant leap in July to N47.4 trillion. August marked another milestone with transactions reaching N50.9 trillion, maintaining an upward trajectory through September (N51 trillion), October (N59 trillion), and November (N63.6 trillion), and culminating in the highest recorded value of N71.9 trillion in December.
Similarly, a breakdown of the monthly volume of transactions for 2023 revealed fluctuating patterns, with peaks in March (1.17 billion) and December (968.59 million). Despite some fluctuations, the overall trend indicates a consistent increase in electronic transactions throughout the year, reflecting the growing adoption of digital payment methods across the country.
Impact on Nigeria’s Cashless Policy
The surge in electronic payment transactions carries significant implications for Nigeria’s cashless policy. As the country continues to embrace digital payment solutions, there is a gradual shift away from traditional cash-based transactions, offering numerous benefits such as improved transparency, efficiency, and financial inclusion.
Although it was significantly buoyed by cash scarcity, the robust growth in PoS transactions underlines the increasing acceptance and utilization of card payments among consumers and merchants alike. The substantial fluctuations in PoS transaction values throughout the year reflect changing consumer spending patterns and economic dynamics.
However, amidst the remarkable progress, challenges remain in ensuring the security and integrity of electronic payment systems. The central bank has implemented measures to mitigate related risks, including setting limits for contactless payment transactions and enhancing cybersecurity protocols. Also, initiatives such as the eNaira demonstrate the regulatory efforts to mitigate related risks and ensure the security of electronic transactions.
However, experts’ voices have advocated the need for continuous innovation, regulatory oversight, and infrastructure development to sustain this momentum and address emerging challenges in the digital payment industry. While the impact on financial inclusion and economic growth is undeniable, they said concerted efforts are necessary to address emerging challenges and ensure the continued integrity and resilience of digital payment systems.