Electronic payment transactions in December were N71 trillion, raising the total amount of transactions for the year to N600 trillion, despite a number of teething problems facing the digital realm.
The N71 trillion was a record monthly amount on the Nigeria Inter-Bank Settlement System (NIBSS) Instant Payment (NIP), according to information that were made public yesterday. The increase may be explained by the growing use of electronic payments and celebratory occasions.
The data on electronic payments demonstrated a consistent rise in 2023, despite a number of obstacles, such as the severe cash shortage experienced in the first quarter of the year after the Central Bank of Nigeria’s (CBN) naira redesign strategy, which was unsuccessfully executed under the governor at the time, Godwin Emefiele.
According to the monthly data, Nigerians spent N38.9 trillion on electronic platforms in January 2023, compared to N36.8 trillion in February for e-payments.
Due to the lack of currency at the time, electronic transaction values surged to N48.3 trillion in March 2023. The entire amount spent on electronic channels by April was N41.3 trillion, and in May, the number of transactions was N45.9 trillion.
The value of NIP transactions in June 2023 was N45.3 trillion, a little less than what was recorded in May. E-payment transactions reached N47.4 trillion in July. The value of NIP transactions increased to N50.9 trillion in August and N51 trillion in September, respectively.
The greatest transaction value, N71.9 trillion, was recorded in December, with transaction values of N59 trillion and N63.6 trillion, respectively, by October and November.
The NIBSS previously provided The Guardian with a document that focused on transactions completed by Nigerians in December of last year and showed a failure rate of 0.35 to 0.95 percent with an average processing time of 0.62.
Subsequent investigation revealed that the amount increased by 55% from N387 trillion recorded in 2022 to N600 trillion by the end of 2023, marking a record high for the nation.
According to NIBSS data, the number of electronic payments reached an unprecedented 1.1 billion in March 2023, during the height of the cash scarcity that forced Nigerians to conduct business via electronic means.
The figure for the month was lower than the one that was noted in December of the same year, though.
Additionally, the number of transactions processed by NIBSS increased from 5.1 billion in 2022 to 9.7 billion in 2023 during the course of the year. This signifies a ninety percent rise annually.
NIBSS developed the account-number-based, online real-time Inter-Bank payment technology known as NIBSS Instant Payments (NIP) in 2011. The platform of choice for the Nigerian financial industry, it ensures immediate benefit to the recipient.
Over time, Nigerian banks have reportedly exposed NIP to their clients through a variety of channels, including ATMs, bank branches, mobile apps, Internet banking, unstructured supplementary service data (USSD), POS systems, and kiosks.
In the meantime, experts have demanded better digital platforms in order to strengthen Nigeria’s push toward a cashless economy.
Telecommunications specialist Kehinde Aluko stated in an interview with The Guardian that unsuccessful transactions pose a serious risk to electronic transactions and that more Nigerians continue to experience similar issues.
He did, however, add that banks hiring reliable personnel for the IT department and advancing technology might help overcome these obstacles.
He claims that an increasing number of people have accepted and would continue to accept the accessible payment options.
“We’ll get bigger with stability,” he said.
The Director of Operations and head of PPC’s ICT Division, Patrick Ede, noted in a statement made available to journalists during the height of the cash crunch crisis that many failed and unsuccessful transactions were caused by the e-payment channels’ inability to withstand the flood of transactions orchestrated by the surge in the use of such channels for payment.
The ICT specialist urged banks to put policies in place that will guarantee prompt, efficient, and simultaneous processing of all electronic payment channels.
“The growing demand on the digital channels of banks necessitates increased investment in dependable payment systems that expedite transaction delivery,” stated Ede.
“Banks should examine payment channels to find gaps and flaws in the system for phased resolution in order to reduce congestion on the channels. This initial step will ensure that banks improve the quality of client experiences and keep customers at the center of their business models.”
The N200 billion that deposit money banks (DMBs) owe telecoms carriers is still outstanding, according to a telco insider who talked with The Guardian yesterday: “Though, there have serious interventions at the highest levels of both sides, but we await concrete resolution that would lead to quick payment, at least part, if not all.”
The official stated that the USSD platform is making a significant contribution to the nation’s e-payments growth and that platform service providers ought to be given fair treatment. Contracts ought to be honored when they’re due.
