Following the recent naira redesign announced by Nigeria’s apex monetary authority, the Central Bank of Nigeria (CBN), total cashless transactions conducted in Nigeria increased significantly amidst an effort to drive a cashless economy in Africa’s largest economy by gross domestic product (GDP) size, according to data from Nigeria Inter-Bank Settlement System’ (NIBSS).
Confiance News gathered from Market forces on Monday.
As of January 2023, the total of cashless transactions in Nigeria rose to N39.58 trillion, representing a whooping 45.4% year-on-year increase, according to the Nigeria Inter-Bank Settlement System’s (NIBSS) reported data.
In its report, NIBSS hints that Instant Payment System (NIP), point-of-sale transactions have risen almost 41% year on year to N807.2 billion at the close of January 2023 after hitting N573.72 billion in the same period last year.
It is noted that total NIP transactions expanded by 45.5% year on year between January 2022 and January 2023 to N38.77 trillion from N26.65 trillion.
The surge comes at the hind of Nigeria’s gradual transition to a cashless economy following the Central Bank of Nigeria’s (CBN) announcement of the Naira redesign. The introduction of new naira notes and attendance issues resulted in steady growth in the value of electronic payments.
“The steady growth may have been bolstered by the current naira scarcity, limited cash withdrawal policy, rising teledensity rate, and increasing number of internet subscribers across the country,” Lagos-based investment firm Cowry Asset Management said in a note.
The total of cashless transactions in Nigeria rose to N39.58 trillion as of January 2023 and indicates a 45.4% year-on-year increase, according to the Nigeria Inter-Bank Settlement System’s (NIBSS) reported data.
The cashless policy push has become a major force that is promoting the use of electronic channels as a means of payment. From the NIBSS data, the use of electronic channels for transactions grew by 45.50% year on year, from 438.5 million times to 638 million times under the review period.
It stated that there were 955,234 deployed point of sales (PoS) electronic terminals in the country as of January 2022 while cheque payments declined.
In the report, NIBSS stated that cheque payments have fallen in popularity in recent years, down by more than 8% year on year to nearly N300 billion, while E-billing channel usage has fallen by more than 20% year on year to N175 billion.
However, transactions through the mobile scheme under the instant payment platform rose fast to N2.7 trillion, indicating an increase of more than 110% year on year.
Cowry Research stated that the transition to a cashless economy will be majorly driven by the naira redesign and cash swap initiatives of the central bank.
Analysts noted that most Nigerians will adopt the use of electronic payment channels for business and personal transactions, which may further lead to a decline in presence in the banking halls.
Confiance News recalls that the latest policy of CBN, which discouraged the use of cash has spurred many to embrace the cashless economy amid reports of network glitches.
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