Despite the negativity brought into businesses across the world due to the corona virus pandemic, the first nine months of 2020 have been positive to the numerous e-payment channels we have in the country.
The latest data from a NBS series, produced in collaboration with the CBN, revealed that 2.8 billion transactions valued at N320 trillion were recorded on electronic payment channels in the quarter under review.
Online transfer transactions dominated the volume of transactions, with 1.5 billion (54% of the total) valued at N100.8 trillion recorded in the quarter.
Internet subscriptions, which are directly correlated with electronic transactions, stood at 151.1 million at end-Q3, according to the Nigerian Communications Commission (NCC). This figure translates into a penetration rate of 76 per cent of the population.
The volume of NIBSS instant payments (NIP) stood at 133 million, or 4.8 per cent of the total volume of transactions. The NIP payment platform is available across Nigerian banks via the mobile USSD channel.
The lockdowns forced Nigerians accustomed to cash transactions to use this transaction mode for specific payments and money transfers.
Analysts at FBNQuest said: “Although movement restrictions have eased, we expect NIP transactions to remain relatively high, given that the newly converted users of this platform are likely to prefer the ease associated with this transaction mode.
“In Q3 ’20, the volume of PoS transactions stood at 112.1 million, an increase of 30 per cent quarter-on-quarter. The gradual resumption of business activity probably contributed to the increase, after restrictions were lifted. Some providers of home delivery services gave their customers the choice of a PoS terminal or an online transfer”, the analysts said.
As for mobile payments, in Q3 the volume of transactions stood at 112 million, compared with 86 million transactions in Q2.
The total volume of electronic transactions categorised under direct debits increased to 849 million in the third quarter of 2020, representing a 54 per cent increase when compared to the second quarter.
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.
Financial services in developing countries are often expensive, leaving the poorest citizens without access to bank accounts. However, mobile payments’ growth has been seen as a way to increase access by allowing individuals to send and receive payments through their phones.
The extent and duration of the economic impact of COVID-19 are still largely uncertain. However, consumers, businesses, banks, payment operators and government agencies are being pushed towards a digital focus that will likely endure beyond the immediate crisis.
Demand for digital tools and technology that enables businesses and consumers to connect is also likely to continue to grow.
The current crisis has revealed that not everyone has the same level of access to new technologies and digital tools.
