New Telegraph

Report: E-payment transactions dip by 7.08% to N28.7trn

Transactions through Electronic payment (e-payment) channels fell by 7.08 per cent to N28.7 trillion in January 2022, compared to the N31.07 trillion recorded in December 2021, a report by Financial Derivatives Company Limited (FDC) has said.


While FDC, which usually cites data obtained from the Nigeria Interbank Settlement System (NIBSS), did not give specific details on the volume and value of transactions recorded through the major e-payment channels such as Point of Sales (POS) terminals, NIBSS Instant Payment (NIP), Mobile Inter-scheme and NIBSS Electronic Transfer (NEFT) during the period, it said the decline “reflects the typical slow down in consumer demand post-festive season.”


The Head of Operations at a Lagos branch of a Tier 2 bank, who  did not want to be named, corroborated the FDC’s assertion.


The bank official said that her branch usually records decline in transactions in the month of January, given that many businesses do not immediately fully reopen for business after shutting down for the Christmas and New Year festivities.


She said: “January is usually a slow month business-wise for financial institutions as a lot of Nigerians would be trying to recover from all the costs they would have incurred in the name of celebrating Christmas.


“For instance, many people travelled to their villages last month and some of them did not return to Lagos until the third or fourth week of January.”


However, the drop in e-payment transactions last month does not reflect the trend in the industry as data obtained from the NIBSS shows that the value of transactions through most e- payment channels has maintained an upward trend in recent years.


For instance, the data indicates that the value of transactions through PoS terminals in the country rose to N18.10 trillion between 2017 and 2021. Specifically, the data shows that PoS transactions maintained  an upward trend in the last five years jumping by 356.27 per cent to N6.43trillion in 2021 from N1.41trillion in 2017.


Also, citing NIBSS’ data, New Telegraph recently reported that financial institutions in the country deployed a total of 456,234 Point of Sale (PoS) terminals in 2021, compared with 156, 123 in the previous year.


An analysis of the data indicates that the total number of deployed PoS terminals in the industry increased from 459, 285 at the end of December 2020 to 915, 519 at the end of December last year.


This implies that the financial institutions deployed a total of 456, 234 terminals in 2021. Further analysis of the NIBSS’ data also shows that the total number of deployed PoS terminals in the industry increased from 155.462 at the end of December 2017 to 217.283 and 303.162 at the end of December 2018 and December 2019 respectively.


Analysts attribute the surge in the number of deployed PoS terminals and surge in PoS transactions to the growing adoption of electronic payment (e-payment) channels, in the last few years, as well as the impact of COVID-19.


Indeed, in its “Instant Payments – 2020 Annual Statistics,” NIBSS stated: “COVID- 19 changed the e-payments landscape, accelerating the adoption of instant payments as more people transitioned to electronic channels for funds exchange in the wake of government imposed lockdowns.”


In addition, analysts note that the Central Bank of Nigeria (CBN)’s efforts to boost financial inclusion, which led it to introducing the Agent Banking system in 2013, under which, financial institutions and mobile money operators could appoint third parties as agents, equipped with PoS terminals, to provide financial services on their behalf to members of the public, has helped to increase the deployment of the terminals.


The banking agents, who are popularly known as PoS operators in Nigeria, have been recording a boom in their business especially since the pandemic spread to the country in February 2020.

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