According to data from the Nigeria Interbank Settlement System (NIBSS), more Nigerians are going cashless as the volume of financial transactions via mobile devices more than doubled in the last 11 months (January to November).
BusinessDay analysis of NIBSS data shows their volume increased by 144.9 percent to 609.9 million in November from 249.0 million in the same period last year.
Its value also increased by 156.5 percent from N6.9 trillion in November 2021 to N17.1 trillion in the same period this year.
Aside from mobile remittances, Point of Sales (PoS) also followed the same trend as its volume rose 25.3 percent to 1.1 billion from 877.9 million in the same period last year.
In terms of value, it recorded a year-on-year increase rate of 33.3 percent from N5.7 trillion to N7.6 trillion.
A recent report from the World Bank’s 2021 Global Findex Report states that greater adoption of mobile money is driving growth in account holdings in financial institutions, particularly in sub-Saharan Africa like Nigeria.
“Mobile money has become a key enabler for financial inclusion in sub-Saharan Africa, particularly for women as drivers of account ownership and use through mobile payments, savings and loans,” it said.
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The report also said the country’s banking population rose 15.6 percentage points from 29.7 percent in 2011 to 45.3 percent in 2021, the highest level in 10 years.
“More and more consumers are using electronic banking channels for financial transactions. So digital channels are increasingly being used for transactions and mobile payments,” said Gbolahan Ologunro, senior research analyst at Cordros Securities.
The transaction volume of the Nigeria Instant Payment (NIP) platform also rose to 4.6 billion in the 11-month period, up 53.3 percent from 3.0 billion in the same period last year.
The volume of check transactions fell 9.5 percent to 3.8 billion from 4.2 billion in the same period, according to NIBSS data.
The transition from the old naira notes to the new ones that have been put into circulation is expected to boost the use of electronic banking channels before the old notes expire by January 31, 2023.
Damilola Adewale, a Lagos-based economic analyst, said people are now limiting the amount of cash they carry, which could encourage electronic transactions.
“People will most likely limit the amount of cash available by using e-channels for their transactions as the expiry date for the existing banknotes is January 2023,” he said.
A report titled “Instant Payments – 2020 Annual Statistics” by NIBSS also found that COVID-19 has changed the landscape of electronic payments and accelerated the adoption of instant payments as people switch to electronic channels for exchanging money.
In 2012, the Central Bank of Nigeria introduced the Cashless Policy, which was intended to curb excessive cash handling and restrict cash circulation.
More importantly, the policy was introduced to encourage the development and modernization of payment systems that can place Nigeria in the top 20 economies in the world.
According to NIBSS, Nigerian banks have made NIP accessible to their customers through their various channels including internet banking, bank branch, kiosks, mobile apps, USSD, PoS and ATMs.