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 past seven months of 2022 (January-July).
NIBSS Instant Payment (NIP) transactions recorded a solid 40.9% y/y and 46.5% y/y increase in transaction value and volume to N205.5tn and 2.7bn, respectively, from January to July. For POS transactions, total transaction value and volume grew 29.3% y/y and 25.0% y/y, respectively, to N4.6tn and 679.8m 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 159.0% y/y to N9.3tn. Likewise, transaction volume was up by 122.4 y/y to 300.6m in same period.
The pandemic which accelerated the adoption 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 payment-based 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 not be elusive of significant growth.
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Notwithstanding the growth, the Nigerian e-payments industry is still scratching the surface of its potential and poised for further growth as alternative payment channels evolve. We have seen the development of the 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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CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
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