February 10, 2023/FBNQuest Research

The latest data from the Nigeria Inter-Bank Settlement System (NIBSS) shows that the total value of transactions recorded under its NIBSS Instant Payments (NIP) platform amounted to NGN42.0trn in December ’22. This represents a growth of 39% y/y, and follows a 51% y/y growth in Nov ’22. On a year-to-date (ytd) basis, the total value of transactions processed through the NIP platform increased by 42% y/y to NGN389.1trn. The y/y growth in the value of transactions was supported by a significant 43% y/y increase in the volume of electronic transactions, to 561.3 million. We can attribute the steady growth in payments performed electronically to the rising teledensity rate and number of internet subscribers across the country.

Payments processed through the NIP channel typically account for over 90% of all electronic payment transactions due to the near-real-time delivery of transactions and ease of usage.

The data also shows the value of transactions for other payment channels, including point-of-sale (PoS), mobile (inter-scheme) transactions, E-bills pay channels, and the more conventional means of payment such as cheques.

Mobile (inter-scheme) transactions recorded under the NIP platform increased at a faster rate of c.108% y/y to NGN2.5trn in Dec ’22.

Payments made through the Point-of-sale (PoS) channel grew by 18% y/y to NGN826bn in Dec ’22. On a cumulative (ytd) basis, the value of transactions between Jan ’22 and Dec ’22 increased by 23% y/y to c.10.4trn.

On the flip side, the E-bills pay channels declined by -23% y/y to NGN177bn in Dec ’22. Over the 12M ’22 (end-Dec) period, the total value of transactions grew by 12% y/y to NGN4.8trn.

Cheque payments decreased by -7% y/y to c,NGN280bn, showing that they are becoming less popular.

We believe the CBN’s naira redesign initiative and cash swap programme will further help to drive the cashless policy, and faster adoption of e-payment channels, particularly in rural communities.