Nigerian payments digitisation has continued to gather momentum as the value of transactions through POS channels across the country increased significantly by 65% to N651.37 billion ($2.07 billion) between January and November 2016.
Nigerian payments digitisation continues as POS transactions hit $2bn
This is compared with the N395.05 billion recorded in the corresponding period of 2015, data gathered from the Nigeria Interbank Settlement System (NIBSS) has revealed.
The data showed that with N81.15 billion, November 2016 recorded the highest value of transactions. In November 2015, a total of N40.25 billion transactions were recorded.
A breakdown of the value of POS transactions in 2016 showed that in January, activities by individuals and corporates through this form of electronic payment system was N46.65 billion, whereas January 2015 was N31.8 billion.
Also, while in February 2016, the value of transactions was N46.14 billion (N30.97 billion as at February 2015); March 2016 was N51.96 billion (N33.54 billion as at March 2015); April 2016 was also N53.28 billion (N34.63 billion as at April 2015); May 2016 was also N55.29 billion (N35.93 billion as at May 2015); and N55.29 billion was recorded in June 2016 (N34.01 billion as at June 2015).
The Central Bank of Nigeria (CBN) had introduced the cash-less policy with a view to significantly reduce the volume of cash-based transactions, and POS was one of the tools to achieve this objective.
The policy was introduced for a number of key reasons, including to drive development and modernisation of the payment system in line with Nigeria’s vision 2020 goal of being amongst the top 20 economies by the year 2020.
This is because an efficient and modern payment system is positively correlated with economic development, and is a key enabler for economic growth. The policy was also expected to reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach; improve the effectiveness of monetary policy in managing inflation and driving economic growth, as well as to curb some of the negative consequences associated with the high usage of physical cash in the economy.
As part of efforts to encourage Nigerians to widely make use of electronic payment systems, the Central Bank of Nigeria (CBN) had introduced an awareness campaign for electronic payment users.
The scheme known as “Electronic Payment Incentive Scheme (EPIS)” was carried out by the CBN and the NIBSS. The scheme’s primary focus was to reward users of electronic payments platforms in Nigeria and to further encourage greater usage of PoS and other e-payment channels.
The scheme also permitted merchants to provide cash back services to cardholders following a purchase. This served as an incentive for merchants to earn a fee for providing a value-added service cash-out services to customers following a purchase of goods/services from their stores.
The chief executive officer of NIBSS, Ade Shonubi, had said the reward scheme was introduced to encourage people to use their cards at places other than the ATMs.
“The scheme was put in place to encourage people to use their cards at merchants. People are more used to using their cards at ATMs and we need to encourage them to use it in places other than ATMs. There are two ways to drive it, either the merchants are tracked or the card users themselves want to use it,” he explained.
NIBSS data revealed that the value of POS transactions continued its upswing in July last year, when it climbed further to:
- N59.4 billion, as against the N35.84 billion recorded in the comparable month of 2015
- POS transactions increased further in August last year to N64.11 billion, as against the N35.84 billion it attained in August 2015
- N66.44 billion as at September 2016, compared with the N39.61 billion recorded in the comparable month in 2015
- N71.81 billion in October 2016, up from the N41.25 billion it was as at October 2015.
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