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Financial Services

Transaction volume for Direct debits jumps by 54% as more Nigerians adopt usage

A recent Banking Sector Report by the NBS has disclosed that direct debits increased by 54% in Q3 2020.

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Transactions on e-Payment Platforms in Nigeria increases to ₦138.67 trillion

The total volume of electronic transactions categorized under direct debits increased to 849 million in the third quarter of 2020, representing a 54% increase when compared to the second quarter.

This is contained in the latest Banking Sector Report by the National Bureau of Statistics.

Direct debits involve standing instructions between a bank and customers approving transfers of money to third parties at a scheduled date during the money. Direct debits are a feature in most developed economies and are relied upon to pay for utility bills and other forms of third party credit related commitments.

Apart from the total volume of transactions, the value of transfers under direct debits was N633.5 billion down from N792.7 billion in the second quarter of the year, when most Nigerians were still on lockdown. According to NIBSS about N320.9 billion in direct debit transactions occurred in 2017

The rise in transaction volume for direct debits suggests more Nigerians are adopting direct debit as a form of payment. For example, most microfinance banks rely on it for payment of unsecured loan transactions and could be the major factor for the increased adoption rate in Nigeria.

Other banking sector data

Meanwhile, the total value of electronic payment channel transactions in the country rose to N319.9 trillion in the third quarter of 2020. Total transaction volume for the same period was 2,781,526,188 transactions.

  • Mobile Money Operators also clocked in an astonishing N5.4 trillion in the third quarter of 2020, as Nigerians adapt swiftly to the rise of Mobile Money.
  • POS – The value of transactions done across Point of Sales (POS) channels in Nigeria increased from N994.91 billion as of Q2 2020 to N1.2 trillion in Q3 2020, indicating an increase of 21.42% Quarter-on-Quarter.
  • The use of Cheque received a significant boost, as transactions through this route increased to N3.83 trillion in Q3 2020, up from N2.5 trillion recording in the preceding quarter, indicating an increase of 51.17% Q-o-Q.
  • On the other hand, ATM transactions recorded a boost, as transactions increased from N3.741 trillion to N5.05 trillion within the period under review, indicating a gain of 35.09% Q-o-Q. The highest value of transactions via ATM was in March (N1.75 billion), while the lowest was in April with N991.97 billion.

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Chidi Emenike is a graduate of economics, a Young African Leadership Initiative Fellow and an Investment Foundations certificate holder. He worked as a graduate Teaching Assistant in the Federal College of Education Kano and is also a trained National Peer Group Educator on Financial Inclusion

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Financial Services

CBN freezes 194 bank accounts of Bureaux De Change firm, others

This was disclosed by the apex bank, as it published the three court orders on its website.

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parallel market, Covid-19: N3.5 trillion disbursed as stimulus package for the Nigerian economy, CBN Vs NESG: Waving the white flag for the benefit of Nigerians, Exchange Rate Unification: CBN devalues official rate to N380/$1, Nigerian banks have written off N1.9 trillion impaired loans in past 4 years, CBN sandbox operations, Stirling Trust Company Limited, Key highlights of the October 2020 Business Expectations Survey Report, A Total of N3.5 trillion was disbursed in the wake of the COVID-19 pandemic, in addition to several other interventions to reflate the economy - CBN, BOFIA 2020: Steps forward or backwards for Nigerian banks, Total credit to the economy rose to N19.54trillion – CBN Governor

The Central Bank of Nigeria (CBN) has received orders from the Federal High Court, Abuja, to freeze 194 bank accounts owned by Bureaux de Change firms and other organisation to conduct investigations into suspicious activities.

This was disclosed by the apex bank, as it published the three court orders on its website.

The document, which was signed by the Presiding Judge, A.R. Mohammed, empowered the CBN to direct the banks to freeze all the bank accounts for a period of 45 days only, pending the outcome of the investigation.

READ: CBN freezes 11 bank accounts of companies, individual

It stated, “The order may be extended upon good reasons shown. Any person aggrieved by this order could apply to the court to have the order set aside, discharged or have the order reviewed for good reasons without waiting for the 45 days to lapse.”

Some of the firms affected are Seasons Bureau De Change Limited, Sethwealth Ventures Limited, Sani Polo Global Investment Limited, Romvic Ventures Limited and Blue Beam Capital Limited among others.

READ: Why Nigerian Crypto community is angry with CBN 

See the court orders:

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Sethwealth Ventures

Sani Polo

Blue Beam

What you should know

  • The CBN on Wednesday had got an order to freeze 11 bank accounts to enable it to conduct investigations into suspicious activities, according to Nairametrics.
  • The order follows an exparte motion, dated March 12 and filed on March 16, seeking the mandatory order of the court to direct First City Monument Bank (FCMB) Limited to freeze all transactions on the listed accounts and all other bank accounts of the defendants for 180 days pending the outcome of investigation and inquiry currently being conducted by the CBN.

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Business News

This decade will be bullish for Nigeria’s tech space – DLM Capital Group

DLM Capital Group has announced its plans to expand into Nigeria’s million-dollar fintech sector.

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Leading developmental investment bank, DLM Capital Group has announced its plans to expand into Nigeria’s million-dollar fintech sector, following its acquisition of Links Microfinance Bank.

The license will give DLM Capital Group the mandate to operate small-scale banking services in Nigeria. This will also allow the launch of its star digital lending brand, Sofri, in the second quarter of this year. The acquisition, combined with the bank’s many fintech efforts already underway, will position it to deliver even more value for corporates and consumers.

DLM Capital Group’s acquisition of Links MFB represents both an entry into new businesses and complementary enhancements to the institution’s existing subsidiaries.

READ: Debt Service: Projects that we finance must generate revenue – DMO

First, this prospect opens new market opportunities for the bank on the African continent.

Second, the acquisition will enable the institution to exit its ‘legacy bank’ visibility and work more closely with the fintech community to build a ‘challenger bank’ brand that proffers innovative technological solutions for the Nigerian market.

What they are saying

The Corporate Communications Manager at DLM Capital Group, Chinwendu Ohakpougwu stated:

“We are particularly excited about our acquisition of Links MFB and how it enhances the growth trajectory of our business. This highly strategic acquisition represents another significant milestone for us on our journey as a resilient and well-capitalized financial institution with advanced scale and capacity to deliver sustainable and best-in-class financial services within the Nigerian market.

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We are confident that this decade will be bullish for Nigeria’s tech space and are ready to work with the fintech community in strengthening the solutions necessary to meet consumer needs.”

READ: Which of these contender groups will produce Nigeria’s biggest bank?

What you should know

DLM Capital Group prides itself as a foremost developmental investment bank in Africa and functions as a sole arranger to more than 80% of structured finance transactions in Nigeria, with 100% of all securitization transactions in the market currently.

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