Then, we had to go to the bank very early and sometimes still wait in line for long hours to deposit. But now, it is not the case.

The introduction of digital payments has made it easy to perform bank transfers from the convenience of the sender’s phone using a bank app or USSD.

This payment method has gained widespread adoption by both physical and online stores in Nigeria.

With the repeated inquiry of “Can I pay with a transfer?” businesses have recognised that this payment method is popular with customers.

Some of them now even have the “Pay with transfer” sign displayed in their stores as a prominent payment method.

Though this method of payment has been widely accepted, is it truly a game changer for merchants acquiring? Let’s investigate what merchant acquiring entails and how the Pay with Transfer Service affects them.

What is merchant Acquiring

Merchant acquiring refers to the process through which financial institutions, known as acquirers, provide services to merchants for accepting card payments. This involves setting up the necessary infrastructure for processing credit and debit transactions, including point-of-sale systems and payment gateways.

Acquirers also aggregate and separate those payments and then send them to card issuers, normally via the respective card system networks known as interchange.

Traditional merchant acquiring relied heavily on POS terminals and card payments. This method is effective, no doubt, but it incurs processing fees and delays in fund settlement. The rise of mobile wallets, QR codes, and direct transfers has challenged this system with an alternative model that promises efficiency and saves costs.

According to the Nigerian Inter-Bank Settlement System (NIBSS), the total value of instant payment transactions reached N1.07 quadrillion in 2024, a 79.6% increase from N600 trillion in 2023. That is such an incredible spike. Don’t you think?

Even with this huge growth, the Business Research Company estimates that the market size aims to scale from $25.48 billion in 2024 to $28.2 billion in 2025 at a compound annual rate of 10.9%. Well, this is currently 2025, and we cannot wait for the massive increase and the benefits that come with it.

Oh, and there is also a hint of rapid growth in the next few years. It is expected to scale up to $42.16 billion in 2029 at a compound annual growth rate (CAGR) of 10.6%.

The increasing demand for digital payment keeps propelling the growth of merchant acquisition. With the many advantages that businesses gain from it, adopting efficient payment solutions is no longer an option.

However, even with its advantages, there are still some challenges and limitations involved, which we’ll be looking into soon. For now, let’s explore the benefits of retail and online stores.

Advantages for Retail and Online Stores

Paying with transfer service in merchants acquisition benefits retail and online stores in numerous ways, including increased sales, improved cash flow, enhanced customer experiences, and better security, among others, making it a necessary aspect of modern commerce.

Let’s take a more detailed look at the advantages:

• Global Reach—With merchant acquisition, online stores can accept payments in several currencies. This method facilitates international transactions, expands their customer base, and gives them more global recognition.
• Increased Sales—This model also allows retail stores to cater to a wider customer base and potentially increase sales through the acceptance of several payment methods. You know, customers are more likely to purchase if their preferred payment method is available.
• Access to actionable Insights—Since merchant acquirers provide detailed transaction data, businesses can analyse customer behaviour and preferences. This analysis allows them to make better decisions and develop better marketing strategies.
• Enhanced Security—The vulnerability of online shopping to fraud is at an all-time high, so merchant acquiring is beneficial in this case because it provides security measures to protect both businesses and customers.
• Better Customer Experience—Your customers get to experience hassle-free shopping when they have the liberty to shop and make payments using their preferred payment method. This leads to a better customer experience, which, in turn, can ensure that the shoppers come back for more.
• Faster access to Funds—Pay with transfer service provides merchants with quicker experience and access to their money, compared to traditional payment methods, as bank transfers can be processed faster.
• Increased Cash Flow—With merchant accounts, there’s a rapid payment authorisation. This means that money reaches your accounts more quickly. Sales are usually deposited within one or two working days, as opposed to individually billing your customers and waiting up to 30 days or more to receive payments.
• Greater Control and Flexibility—Merchant acquiring allows these businesses to gain control over the entire payment processing system. This control includes handling transaction disputes and customising payment solutions to meet specific needs.

Now that we’ve outlined some of the advantages let’s move over to the challenges and limitations involved in acquiring a merchant account.

Challenges and Limitations

In as much as this model provides numerous benefits, maintaining a seamless merchant payment system comes with its share of challenges. They include:

• Compliance and Regulatory Challenge—Payment systems must comply with several global and regional regulations such as GDPR, PCI DSS, and local tax laws. For both acquirers and merchants, these requirements can be too overwhelming to handle.
• Integrating Payment Systems—Most times, merchants require payment systems that are multiple-channel supportable—online, in-store, and mobile. However, combining all these systems into one unified solution is difficult and can lead to compatibility problems.

As we can see, the challenges and limitations do not surpass the advantages and benefits, which can only mean one thing—digital payment is truly a game changer for merchant acquiring in retail and online stores. With Pay with Transfer services, customers can initiate bank transfers directly to a merchant’s account with ease.

Meet Banji A. Kayode

The writer, Banji A. Kayode, is a seasoned expert in merchant acquiring and financial technology, with a strong background in payment system infrastructure for banks and major operators. With extensive experience in digital payments, he has played a pivotal role in driving financial inclusion and fostering innovation within the fintech ecosystem.

A recognised thought leader, Banji provides insightful commentary on digital financial services, emerging payment technologies, and industry trends.

Beyond payments, he is a trusted advisor to fintech startups, offering strategic guidance on product development, go-to-market strategies, and regulatory compliance. His deep industry expertise and hands-on approach have helped startups scale and navigate the complexities of the financial landscape.

Imagine a bustling Tuesday morning in the city of Lagos and Mrs. Hadiza, a vibrant entrepreneur, is preparing her well-loved Jollof rice for the lunch crowd. As she expertly stirs the simmering pot, her mind wanders to a challenging period earlier this year when Nigeria experienced a cash crunch which followed the introduction of the new naira currencies.  

Mrs. Hadiza was unable to run her food business operations smoothly.  During this time, she was unable to make the necessary purchases for her business because she did not have sufficient cash. Her suppliers were insistent on being paid in cash; bank apps failed intermittently and payments were getting reversed so no one trusted the transfer system. 

Both the suppliers she needed to pay and the customers who needed to pay her were caught in the financial dilemma. This was not just her experience; many Nigerians found themselves unable to procure everyday items due to the lack of cash. This episode was a stark reminder of the uncertainties that can shake a cash-dependent economy, and the vulnerabilities of businesses that operate within such an ecosystem.

During these turbulent times, digital payment solutions like Pay with Transfer, although always available, came to the fore as more viable alternatives, offering resilience against such financial shocks.

This was a real-life illustration of the potential of digital payments and the transformative role they can play in enhancing economic stability. The adoption of these methods is not without its challenges, but the experiences during the crunch showed us that the benefits they offer are undeniable and far-reaching.

Reliability and speed of transactions are two of the most significant benefits that digital payments offer. In our rapidly moving world, where time is often equated with money, instant payments can make all the difference. They eliminate long queues from banking halls, ATM machines, check-out shops, and even places like Mrs. Hadiza’s bustling eatery, streamlining business operations and customer experiences.

Digital payments can enhance the efficiency of businesses by reducing transaction times and eliminating the need for physical cash handling, like it did for Mrs. Hadiza. For customers too, the convenience of paying instantly without worrying about having the exact change or the risk of carrying cash is a major advantage.

This convenience extends beyond the customer-business transaction, impacting the wider economy and making the hustle and bustle of daily life in cities like Lagos smoother and more efficient.

Safety is another crucial aspect that digital payments prioritize. As our financial transactions increasingly move online, the risk of cyber threats also rises. However, a focus on transfer as a payment option effectively eliminates the common pitfalls of cash handling, such as theft, robberies, and mismanagement of funds.

This compelling shift encourages both banks and fintech companies to devise innovative and robust measures to ensure security and prevent fraud, thereby reinforcing trust among users. Digital payment solutions like Pay with Transfer, consequently, provide the necessary safeguards, ensuring peace of mind for both businesses and individuals.

This level of security allows businesses to focus more on their core operations and less on potential financial risks, offering not only ease of use but also a sense of security and reliability that is vital in today’s digital age.

However, while these benefits are substantial, we must acknowledge the realities of a digital divide. Some businesses are well-equipped to integrate digital payments into their operations, while others may face challenges due to limited internet access, lack of digital literacy, or a preference for traditional methods.

This divide is more pronounced in developing economies like Nigeria, where a significant portion of the population still operates outside the formal banking system.

In this context, digital payment solutions like Pay with Transfer can serve as a bridge, offering a user-friendly platform that caters to a diverse user base. It can help businesses and individuals who are currently underserved by the traditional banking system to join the digital economy. While it’s not a panacea for all financial challenges, it represents a crucial step towards a more inclusive financial ecosystem. It can bring about an era of financial inclusion, where everyone, regardless of their background or location, can participate in the economic growth of the country.

I mean, just imagine a Nigeria where every buka, mama-put, vulcanizer and shoe-shiner accepted their payments via bank transfer; implying that they have a digital financial footprint and are able to access financial services like credit, in order to grow their businesses.

The future of finance in Nigeria is exciting, and digital payment solutions like Pay with Transfer are part of this journey. They are not just tools for facilitating transactions but instruments of change that can foster economic resilience and inclusivity. They have the potential to democratize access to financial services, thereby contributing to the broader economic development of the country.

The experience of the cash crunches earlier this year underscores the importance of having a variety of reliable, convenient, and secure payment options. It emphasizes the value of choice, reminding us that the best financial tool is the one that suits our unique needs and circumstances. Today, for many, Pay with Transfer is a part of that choice, representing the potential of digital payments in Nigeria.