In a landmark achievement, Nigeria’s electronic payment (e-payment) transactions have reached an unprecedented N1.07 quadrillion in 2024, marking a 79.6% increase from the N600 trillion recorded in 2023. This significant growth underscores the nation’s rapid shift towards a cashless economy and highlights the increasing adoption of digital payment solutions among Nigerians.
Quarterly and Monthly Growth Trends
The Nigeria Inter-Bank Settlement System (NIBSS) reported that in the first quarter of 2024, e-payment transactions totaled N234.4 trillion, an 89% increase from N123.9 trillion in the same period of 2023. This upward trajectory continued throughout the year, with July 2024 witnessing the highest monthly transaction value of N89.5 trillion, compared to N47.4 trillion in July 2023.
Factors Driving the Surge
Several key factors have contributed to this remarkable growth:
1. Digital Breakdown of E-Payment Channels: The surge in e-payment transactions spans various channels, each contributing significantly to the overall growth
2. Instant Payments (NIP): Dominating the e-payment landscape, NIP transactions saw substantial increases, reflecting the preference for real-time payments among Nigerians.
3. Point of Sale (PoS) Transactions: There was a notable rise in PoS transactions, indicating greater acceptance of card payments by merchants and consumers alike.
4. Mobile Transfers: Mobile banking applications and USSD codes have made it easier for individuals to perform transactions on the go, contributing to the overall increase.
Impact on the Economy
The exponential growth in e-payment transactions has several positive implications for Nigeria’s economy:
- Financial Inclusion: Digital payments have brought financial services to previously unbanked populations, fostering greater economic participation.
- Transaction Efficiency: Electronic payments reduce the time and cost associated with cash handling, enhancing business operations and customer experiences.
- Revenue Generation: The formalization of transactions through electronic channels aids in better revenue tracking and tax collection for the government.
Challenges and the Road Ahead
Despite the impressive growth, challenges remain:
- Infrastructure Development: Continuous investment in digital infrastructure is essential to support the increasing volume of transactions and ensure system reliability.
- Cybersecurity: As e-payment usage grows, so does the risk of cyber threats. Strengthening security measures is crucial to protect users and maintain trust in the system.
- Consumer Education: Ongoing efforts to educate consumers on the benefits and safe practices of e-payments will further drive adoption and mitigate fraud risks.
In conclusion, Nigeria’s achievement of N1.07 quadrillion in e-payment transactions in 2024 marks a significant milestone in its journey towards a cashless economy. Sustaining this momentum will require collaborative efforts from stakeholders across the financial ecosystem to address challenges and harness the full potential of digital payments.
