A Report by the Financial Derivatives Company Limited has shown that transactions through electronic payment (ePayment) channels in the country fell to N79.85 trillion in April 2024 an equivalent of 9.31 per cent from N88.04 trillion recorded in the previous month.
According to FDC’s Report, ePayment transactions data obtained from the Nigeria Interbank Settlement System (NIBSS) stated that apart from cheque transactions, which increased by 10.68 per cent to N290.36 billion in April from N262.35 billion in March, transactions through other electronic payment platforms declined last month.
An analysis of the report shows that NIBSS Instant Payment (NIP) transactions fell by 9.31 per cent to N75.32 trillion in April from N83.05 trillion in March.
The report also indicates that transactions through the Nigeria Inter-bank Settlement System Electronic Fund Transfer (NEFT) declined by 9.07 per cent to N3.42 trillion in April from N3.76 trillion in the previous month.
According to the report, the value of transactions through Point of Sale (POS) terminals, equally headed south last month as it fell by 15.35 per cent to N811.77 billion compared to N958.99 billion in March.
The report attributed the decline in transactions through the other electronic payment platforms in April to reduced consumer spending and business transactions as well as “delayed discretionary purchases” and consumers opting for lower-value transactions.
It predicted that “total value of transactions is expected to decline further in May due to the reduction in consumer spending and business activities.”
Further analysis of data obtained from NIBSS, however, shows that the decline in the value of e-payment transactions in April comes after consecutive increases in the first three months of the year.
In fact, in an earlier report, FDC stated that the total value of e-payment transactions “has been increasing steadily since July 2023.”
Analysts believe that factors driving digital payment adoption in the country, in recent years, include the Central Bank of Nigeria’s (CBN) initiatives to promote the cashless policy, the impact of the 2020 Covid-19 crisis and the apex bank’s naira redesign programme.
For instance, in its report titled, “Instant Payments – 2020 Annual Statistics”, the NIBSS stated: “The Covid-19 pandemic changed the epayments 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, implementation challenges with the CBN’s naira redesign policy led to an acute shortage of cash, which crippled economic activities across the country in the first quarter of last year, thereby forcing bank customers, who were unable to access cash at the time, to adopt e-payment channels.
Indeed, data released by the NIBSS indicates that the value of electronic payment transactions surged year-on-year (YoY) by 298 per cent to N135.52 trillion in the first quarter of 2023 from N34.04 trillion in the corresponding period of 2022.
Also, latest data published by NIBSS indicates that total electronic payment transactions hit an all-time high in 2023 as it rose by 55 per cent to N600 trillion, compared with N387 trillion in 2022.
The data further shows that the volume of transactions processed by NIBSS in 2023 jumped by 90 per cent from 5.1 billion in 2022 to 9.7 billion in 2023.
A breakdown of the data indicates that the value of instant payments increased significantly to N71.95 trillion in December 2023 from N42.02 trillion recorded in the same month of the previous year.
