May 17, 2023/FBNQuest
The latest data from the Nigeria Inter-Bank Settlement System (NIBSS) shows that the total value of electronic transactions recorded under the NIBSS Instant Payments (NIP) platform increased by 52% y/y to NGN48.3trn in Mar ‘23. On a m/m basis, the value of transactions processed through the NIP platform rose by 31% m/m. This represents the fastest monthly growth recorded on the platform. The NIP platform has gained significant adoption as one of the most popular payment methods, thanks to the continuous growth of mobile telephony and internet penetration throughout the country.
The m/m surge in the value of electronic payments may be partly attributed to the reduction in the number of failed transactions on all e-payments platforms witnessed in previous months.
On a cumulative (ytd) basis, the total value of electronic transactions recorded during Q1 ’23 amounted to NGN124trn, representing a 45% y/y growth.
The significant rise in the value of electronic transactions in the first three months of the year relative to the corresponding period of the last year, can be attributed to the CBN’s initiative to redesign the naira bills and reduce the amount of physical currency in circulation.
With respect to other payment channels, the mobile (inter-scheme) channel delivered the fastest c.209% y/y to NGN4.1trn. However, in terms of absolute value, it fell significantly behind the value of NIPs transactions.
Similarly, payments made through the Point-of-sale (PoS) channel al.so increased by c.60% y/y to NGN1.2trn in March.
In line with recent trends, the E-bills pay channel (which is primarily used for bill payments) and cheque payments recorded declines of -55% y/y and -3% y/y to NGN117bn and NGN283bn respectively.
Highlighting the growing adoption of e-payment platforms in Nigeria, the Groupe Speciale Mobile Association (GSMA) reported that mobile money accounts owned by Nigerians increased by 22% y/y in 2022. This compares with a 16% y/y growth in 2021.
The global telecommunications body attributed the growth to the CBN’s move to grant payment services bank (PSB) licenses to both MTN Nigeria and Airtel.
