According to data from the Nigeria Inter-Bank Settlement Systems (NIBSS), Nigerians spent N89.5 trillion using electronic channels in July 2024.
The July record set the all-time high monthly transaction value on the NIBSS Instant Payment (NIP) platform, according to the most recent e-payment data.
This indicates an 89% annual rise compared to the N47.4 trillion registered during the same period last year.
According to the July record, the value of all electronic transactions in Nigeria from January to July 2024 was N566.3 trillion. With five more months of data to contribute for 2024, the seven-month total is now very nearly the N600 trillion recorded for 2023.
In July of this year, 907 million NIP transactions were completed by NIBSS, a significant increase from 743 million in July 2023. This indicates a yearly rise of 22%.
CBN cashless policy’s effects
Industry observers surmise that the current cash constraint and the Central Bank of Nigeria’s (CBN) cashless policy, which caps the daily amount of cash that may be withdrawn, are responsible for the spike in e-payment transactions.
The updated cashless policy was enacted on January 9, 2023, and states that an individual can only take N500,000 in cash every week, while corporate entities can withdraw up to N5 million.
According to financial analyst Mr. Adewale Adeoye, more Nigerians are using cashless payment methods because cash is less readily available in banks than it once was.
He claims that those who are desperate for cash these days turn to PoS providers, who allow them to deposit money into accounts or use their cards.
“It is expected that electronic transactions will continue to go up since banks are not willing to release cash like before. Aside from the CBN withdrawal restriction, if you walk into a bank today to withdraw cash, they may inform you that you can’t get more than N5,000 over the counter.”
“So, you are forced to use ATMs, which in most cases are also short of cash. If all that fails, you start looking for PoS operators or you resort to doing mobile transfers,” he said.
What To Note
NIBSS developed the account-number-based, online, real-time Inter-Bank payment technology known as NIBSS Instant Payments (NIP) 2011. The platform of choice for the Nigerian financial industry ensures immediate benefit to the recipient.
According to NIBSS, over the years, Nigerian banks have exposed NIP to their clients through various channels, such as Internet banking, bank branches, Kiosks, mobile apps, Unstructured Supplementary Service Data (USSD), POS, ATM, etc.
Along with the cash shortage in March of last year, the CBN’s updated cashless policy, which further restricts the amount of cash that may be taken out of banks daily, has contributed to the expansion of e-payments.
Many Nigerians are now accustomed to using USSD and PoS, among other mobile payment methods, for their transactions.
