The value of point of sales transactions made in Nigeria jumped to N3.01 trillion in the first half of 2021, with a total volume of 462.11 million transactions in the same period.
This is according to the report released by the Nigeria Inter-Bank Settlement System (NIBSS) for the month of June 2021.
This represents a 50% increase compared to N2 trillion recorded in the corresponding period of 2020 and a 10.3% increase against N2.72 trillion recorded in the second half of 2020. The increase in the value of POS transactions in Nigeria shows the spending patterns of Nigerians and payment preferences as compared to cash payments.
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- Value of POS transactions increased by 10.3% in H1 2021 from N2.72 trillion recorded in H2 2020 to N3.01 trillion in the review period.
- However, the value of transactions has been on a steady decline since March 2021, when it hit its peak. In the month of June 2021, POS transactions declined marginally by 0.01% from N503.96 billion to N503.91 billion.
- The volume of POS transactions stood at 462.11 million in the review period, representing a 66% year-on-year increase compared to 278.28 million transacted in H1 2021.
- It is worth noting that on a month-on-month comparison, transactions through POS terminals rose from 79.07 million in May 2021 to 81.97 million in June 2021. It also reflects a massive surge when compared to 49.42 million transactions recorded in the corresponding period of 2020.
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A cursory look at the data revealed that the current value of POS transactions in Nigeria represents the highest on record since 2017. In the same vein, another electronic payment channel, NIBSS Instant Payment (NIP) systems also rose to its highest on record in H1 2021, from N97.29 trillion in H2 2020 to N123.38 trillion in the current review period.
What is driving growth?
The Nigerian e-payment sector continues to demonstrate significant growth resolve, as Nigerians are steadily increasing their preference for cashless payments as against holding and transacting in cash.
- Insecurity in Nigeria is a major cause for choosing to go with the former rather than the latter. It is easier and safer to make payments through your ATM or virtual cards in Nigeria, especially with the increased cases of robbery, bag snatching, kidnapping amongst others.
- The rigour of waiting in line to be serviced in the bank just to make withdrawals has made POS businesses grow significantly since the heat of the covid-19 pandemic. Recall that during the lockdown, when most Nigerians were forced to stay home and banks were only partially operating, POS terminals became a viable option in making withdrawals and transferring funds.
- While interviewing Miss Esther Oyewole, a POS agent in Lagos State, she mentioned how the business had blossomed since the lockdown and how many Nigerians were moving into the sector.
- She explained that she made an average of N15,000 as profit daily, summing up to about N450,000 in a month, from which she had been able to employ other young people and set up branches in various strategic places.
- According to Miss Esther, “POS businesses have recorded significant growth, and are poised to continue growing, as Nigerians still do not feel safe going around with cash when they could travel light and still complete their transactions anywhere in the country.”
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According to NIBSS, the number of registered POS terminals in the country rose to 976,898 in June 2021, just a little under 1 million, compared to 523,488 registered as of the same period in 2020. Meanwhile, deployed POS machines as of June 2021, stood at 638,983.
Why this matters
The increase in e-payment transactions in Nigeria is a reflection of Nigerians growing adoption of cashless transactions. The growth in the number of POS businesses in the country has also formed a major source of employment for Nigerians, especially youths.
No doubt about it. Nigeria banking sector is doing well and steadily growing rapidly especially fintech. I am hoping to see significant change in agrictech