Connect with us

E-Financial

Online Transfers Dominate in Nigerian Payments Space as ATM Transactions Decline

Published

on

Kindly share this post

The growing smartphone penetration in Nigeria and a shift towards mobile applications as the preferred means of conducting transactions is driving online transfers, relegating ATM transactions to the background.

The growth in mobile phone penetration in Nigeria, coupled with initiatives led by the Central Bank, has led to a sustained shift in user behaviour towards mobile applications as the preferred means of conducting transactions, increasingly replacing traditional cash-based methods.

A new report by Zone, in partnership with TechCabal Insights, sheds light on how Nigerians have transitioned from ATMs as the primary means of conducting financial transactions to online transfers.

In 2012, at the commencement of the CBN’s Payments System Vision (PSV2020), ATM transactions in Nigeria totaled ₦1.98 trillion, while online transfer payments for the same period were valued at ₦31.57 billion. The following decade witnessed an explosion in online transfers.

As of 2022, ATM transactions were valued at ₦32 trillion, while online transfers soared to ₦783.6 trillion, marking an astounding ‪2610.15percent overall increase and a 43.78percent year-on-year growth.

Data from the report reveals that 36percent of Nigerians above 15 own a debit card, with one of the largest card payment companies, Verve, claiming to have issued around 35 million active payment cards as of 2022.

Here are five key insights from the Nigerian Payments Report 2024:

Surge in online transfers driven by digital adoption

The total transaction value for online transfers grew from ₦545.03 trillion in 2021 to ₦783.66 trillion in 2022, marking a substantial 43.78percent year-on-year increase.

The total volume of transactions similarly increased by 36.26percent, from 10.32 trillion to 14.06 trillion within the same period.

This growth indicates an improved digital payment infrastructure, enabling businesses to actively promote online payments and reflecting increased consumer trust in digital platforms for e-commerce, bill payments, and peer-to-peer transactions.

Decline in ATM transactions attributed to increasing smartphone penetration

Although the total transaction value of ATM transactions increased by 53.78percent year-on-year, from ₦21.23 trillion in 2021 to ₦32.64 trillion in 2022, there was an 8.55percent decline in volume, from 4.45 billion in 2021 to 4.07 billion in 2022.

There has been a noticeable evolution in ATM usage over the years. As of 2010, Nigeria had about 7,100 ATMs, rapidly growing to over 11,000 in 2011 due to the CBN mandating banks’ removal of offsite deployment. In the following decade, the number of ATMs doubled peaking at 22,600 in 2021, which has remained as of December 2023.

However, there’s still a demand for ATMs, with an estimated 60,000 ATMs required to meet up with its growing population. This has led to an increasing adoption of alternative banking channels.

This shift underscores a trend towards digital payments, such as POS terminals, mobile wallets, and online transfers, signalling increased smartphone and internet usage. POS transfers experienced a 17.00percent increase in total volume, rising from 982.83 million in 2021 to 1.14 billion in 2022.

Mobile app transfers, with a total volume of 831.54 billion in 2021, increased to 1.86 trillion in 2022, reflecting a 123.85percent change in transaction volume. The total transaction value for mobile app transfers increased from ₦53.20 trillion in 2021 to ₦111.12 trillion in 2022—a noteworthy 108.84percent year-on-year growth.

Smartphone penetration in Nigeria is growing and is projected to hit 60percent by 2025, with over 143 million Nigerians owning smartphones. The uptick suggests confidence in the security provided by digital payment platforms, showcasing progress toward financial inclusion.

Mobile money operators witness remarkable growth

Mobile money (MMO) transfers in Nigeria witnessed a 151.18percent increase in total volume, rising from 248.5 million in 2021 to 714.5 million in 2022. Concurrently, the total transaction value rose from ₦8.06 trillion in 2021 to ₦19.4 trillion in 2022, marking a significant 140.73percent year-on-year increase.

The convenience and accessibility offered by mobile money services, particularly in remote or unbanked areas, have been key drivers of this growth.

NIBSS Instant Payment (NIP) gains traction

Transactions via the Nigeria Interbank Settlement System (NIBSS) witnessed a 47.99percent increase in total volume, rising from 3.47 billion in 2021 to 5.14 billion in 2022. The total transaction value surged from ₦271.95 trillion in 2021 to ₦387.07 trillion in 2022, representing a 42.33percent year-on-year increase.

Regulatory initiatives driving payment system evolution

An emphasis on the role of regulatory initiatives in driving the evolution of Nigeria’s payment system plays prominently. The CBN’s PSV2020 and PSV2025 have been instrumental in promoting digital payments and financial inclusion.

Through NIBSS, the CBN provides the framework for Real-Time Gross Settlement (RTGS). The growth of payment methods and channels, such as online transfers, NEFT transfers, and NIP transfers, is a testament to the effectiveness of these initiatives.


Kindly share this post

Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

Continue Reading
Advertisement
Comments

E-Financial

NDIC, EFCC Begin Investigation of Directors, Staff of Heritage Bank

Published

on

Kindly share this post

Nigeria Deposit Insurance Corporation (NDIC) has said it will, in conjunction with law enforcement agencies, commence investigation of directors, managers and staff of the defunct Heritage Bank following its liquidation over a month ago.

NDIC, EFCC Begin Investigation of Directors, Staff of Heritage Bank

Mr Bello Hassan, managing director of NDIC, stated this at the 2024 capacity building workshop for law enforcement agencies on ‘Inter-Agency Collaboration in the Fight Against Financial Malpractices in Banks and Other Financial Institutions in Nigeria’ in Lagos yesterday.

Stating that, those behind the collar of the bank will be brought to book, Hassan, who was represented by Mr Bello Hassan, NDIC’s director, Corporate Communications,  noted that, through its collaboration with law enforcement agencies, 14 prosecution cases are ongoing at various courts, 18 ongoing investigation with FMIU, 8 with EFCC and 9:concluded investigations with Federal Ministry of Justice for advice and prosecution.

“The Central Bank of Nigeria recently revoked the banking licence of Heritage Bank PLC which may require you to be called upon to investigate some of the Directors, Managers and officers of this failed insured Institution with a view to bring to book those found culpable in the collapse of this institution.

“The Corporation as a key participant in the financial safety-net, has over the years taken the fight against insider abuses and financial malpractices in banks very seriously. As you all know, a safe and sound banking environment is an essential ingredient of financial system stability which of course is the bedrock for economic development of every nation.

“We are not unaware of the challenges of investigating and prosecuting financial malpractices and bank fraud cases but wish to urge you not to relent in your efforts and be rest assured of our unflinching support at all times,” he pointed out.

Hassan noted that, the theme of the workshop ‘Effective Collaboration as a strategy in the fight against insider abuses and financial malpractices in Banks and Other Financial Institutions in Nigeria’ was to re-echo its resolve to unite with law enforcement agencies in the “fight occasioned by the menace of insider abuses and financial malpractices which is a major cause of bank failure, and if not tackled is  capable of eroding public confidence in our banking system.

“Consequently, and in line with Article 12 of the Core Principles of Effective Deposit Insurance which provides for every Deposit Insurer to put in place the necessary mechanism of bringing to book parties found culpable in the failure of their bank or financial Institution.

“It is for this reason that the NDIC has been consistent since 2012 in organising this workshop to sharpen the skills of law Enforcement operatives and Officers from Regulatory Agencies that are involved in the investigation and prosecution of bank Directors, Managers and staff of banks involved in malpractices and insider abuses that might have led to the collapse of their banks or financial Institutions.

 

“Change is the only constant thing in life. Most changes in human endeavours come through developments in sciences, technology or innovation. As the banking system is rapidly evolving with new innovations, it is clear that a new phase of financial technology driven economy is currently reshaping the global financial services space.

“With this development, the criminally minded users of the banking system including the notorious ‘’cyber criminals’’ are busy perfecting their misplaced skills and that is why workshops like this are necessary to enable law enforcement officers to understand, accept and adapt to the dynamic operating environment.”

 

 

 

 


Kindly share this post
Continue Reading

E-Financial

PalmPay Makes Payment Easier with Zero Bank Transfer Fees on All Transactions on the Fintech App

Published

on

Kindly share this post

In its continued drive to financial inclusion across Nigeria, leading fintech company PalmPay, continues to give its users unlimited free transfers to all banks. This feature which was introduced earlier in the year has been allowing users to make transfers to all banks within the country without incurring any bank fees.

Chika Nwosu, PalmPay’s Managing Director, stated: “We are committed to ensuring smooth and easy transactions with our free transfer feature. This shows our dedication to providing accessible and affordable financial services to our over 30 million users and every Nigerian. We believe everyone should have access to affordable financial services.”

PalmPay is dedicated to driving economic empowerment in Nigeria by offering top-tier products such as money transfers, bill payments, credit services, and savings through its app and mobile money agents. Users can send and receive money seamlessly, pay bills effortlessly, shop with ease, and earn discounts and cashback while performing these transactions.

By eliminating transfer fees to all banks on its app, PalmPay has empowered its millions of customers to enjoy endless fund transfers to family and friends, pay their bills seamlessly, and manage their finances more effectively.

PalmPay is a leading Africa-focused fintech platform committed to driving economic empowerment in Africa. Through its secure, user-friendly, and inclusive suite of financial services, PalmPay brings top-tier products into the pockets of everyday Nigerians. With this, we are able to drive financial inclusion.

PalmPay offers money transfers, bill payments, credit services, and savings on its app and via its mobile money agents. Since launching in Nigeria in 2019 under a Mobile Money Operator license, the platform has grown to over 30 million app users as part of its cashless payment ecosystem.


Kindly share this post
Continue Reading

E-Financial

eTranzact Powers Military Pensions Board’s New Digital Verification System

Published

on

Kindly share this post

eTranzact, innovative financial technology solutions company, has announced its role as the technology solution provider for the Military Pensions Board’s new digital verification system for military pensioners, officially launched on July 1, 2024.

eTranzact Powers Military Pensions Board’s New Digital Verification System

In a press statement, the company said that the initiative marks a significant milestone in leveraging technology to streamline pension verification processes and enhance the welfare of military retirees across Nigeria.

It also stated that, with Federal Government approval, the Military Pensions Board is transitioning from traditional physical verification methods to an advanced electronic system developed and deployed by eTranzact.

“This transition aims to minimise travel risks, reduce transportation costs, and accommodate the advanced age of many pensioners.”

According to the statement, Air Vice Marshal Paul Irumheson, chairman of the Pension Board, said the necessity of this transition to electronic verification is crucial for the safety and convenience of military pensioners.

“This innovative solution will ensure that retirees can verify their status from anywhere in the world, significantly reducing the burden of travel and associated risks.

“The successful pilot exercise conducted between February 15 and March 1, 2024, demonstrated the efficiency and reliability of the new system. In addition to developing the verification system, eTranzact has managed salary payments for other government agencies.

“The implementation of this electronic verification system is a critical step towards ensuring foolproof and seamless payment processes within the Military Pensions Board.

“The Minister of State for Defence, Dr Bello Matawalle, and the Chief of Defence Staff, General Christopher Musa, have endorsed the electronic verification exercise, recognising its potential to revolutionise the military pensions system.”

The statement further explained that the “key benefits of the digital verification system include enhanced security by reducing the risk of identity fraud and impersonation, convenience by allowing pensioners to complete verification from their homes, cost efficiency by eliminating the need for travel, and accessibility by accommodating pensioners residing both within and outside Nigeria.

On his part, Niyi Toluwalope, chief executive officer of eTranzact, expressed enthusiasm concerning the partnership for digitalized pension processes.

“We are honoured to collaborate with the Military Pensions Board on this transformative project. At eTranzact, we are committed to harnessing the power of technology to solve critical challenges and improve the quality of life for Nigerians. This digital verification system affirms our dedication to innovation and excellence,” the statement reaffirmed.


Kindly share this post
Continue Reading

Trending