July 5, 2022/CSL Research
The latest data from the Nigeria Inter-Bank Settlement System (NIBSS) showed that the growth recorded across the various e-payment channels remained strong in the first four months of 2022 (January-April). Specifically, NIBSS Instant Payment (NIP) transactions recorded a solid 44.3% y/y and 50.0% y/y increase in transaction value and volume to N114.8tn and 1.5bn, respectively, in the first four months of the year. For POS transactions, total transaction value and volume grew 26.7% y/y and 25.2% y/y, respectively, to N2.5tn and 376.9m in the same review period.
The highest growth was recorded in the mobile transactions category where transaction value was more than twice as tall, beating that of the equivalent period in 2021 by 173.0% y/y to N4.9tn. Likewise, transaction volume was up by 128.3 y/y to 128.3m in the first four months.
The pandemic which allowed for the blossoming of digital payments has paved the way for the continued growth in e-payments transaction volume and value in Nigeria, reflecting the enduring shift away from cash. The growth in e-payments has also been driven by the increasing internet & mobile penetration and investment by banks and other paymentbased fintech companies in payment technology infrastructure. Furthermore, the growth in POS transactions shows the increase in agency banking services. Also, we believe the newly launched e-Naira, though still at the nascent stage, if fully integrated into the e-payment channels, will spur growth.
Notwithstanding the growth, the Nigerian e-payments industry is still poised for further growth as alternative payment channels evolve. We have seen the development of Nigeria Quick Response (NQR) code by the NIBSS and, more players are keying into facilitating contactless payments. The country’s favourable demographics and regulatory support continue to inform our expectation of accelerated growth of the Fintech industry in Nigeria.
This expectation has received much attention from investors, which has led to significant investments as existing players look to position for future growth.
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