First bank confirms Alebiosu as MD, Ebong as DMD – Nigerian CommunicationWeek

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

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

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

As of 2022, ATM transactions were valued at ₦32 trillion, while online fund transfers rose to ₦783.6 trillion, marking an astonishing overall increase of 2,610.15 percent and a 43.78 percent year-on-year growth rate.

Data from the report shows that 36 percent of Nigerians over the age of 15 own a debit card, with one of the largest card payment companies, Verve, claiming to have issued about 35 million active payment cards by 2022.

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

Increase in online transfers, driven by digital adoption

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

Total transaction volume increased by 36.26 percent over the same period, from 10.32 trillion to 14.06 trillion.

This growth signals an improved digital payments infrastructure, allowing businesses to actively promote online payments and reflects increased consumer confidence in digital platforms for e-commerce, bill payments and peer-to-peer transactions.

Decline in ATM transactions attributed to increasing smartphone penetration

While the total transaction value of ATM transactions increased by 53.78 percent year-on-year, from ₦21.23 trillion in 2021 to ₦32.64 trillion in 2022, there was a volume decline of 8.55 percent, from 4 .45 billion in 2021 to 4.07 billion in 2022. .

There has been a noticeable evolution in the use of ATMs over the years. In 2010, Nigeria had about 7,100 ATMs, and this quickly grew to over 11,000 in 2011 as the CBN required banks to remove off-site deployments. Over the next decade, the number of ATMs doubled, peaking at 22,600 in 2021 and remaining that way in December 2023.

However, there is still demand for ATMs: an estimated 60,000 ATMs are needed to meet the growing population. This has led to an increasing adoption of alternative banking channels.

This shift underlines a trend towards digital payments, such as POS terminals, mobile wallets and online transfers, indicating increasing smartphone and internet use. The total volume of POS transfers increased by 17.00 percent, from 982.83 million in 2021 to 1.14 billion in 2022.

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

Smartphone penetration in Nigeria is growing and is expected to reach 60 percent by 2025, with over 143 million Nigerians owning smartphones. The uptick signals confidence in the security that digital payment platforms provide, demonstrating progress toward financial inclusion.

Mobile money operators are witnessing remarkable growth

Mobile money transfers (MMO) in Nigeria saw a 151.18 percent increase in total volume, from 248.5 million in 2021 to 714.5 million in 2022. At the same time, the total transaction value increased from ₦8.06 trillion in 2021 to ₦19.4 trillion in 2022. a significant increase of 140.73 percent year-on-year.

The convenience and accessibility that mobile money services provide, especially in remote or unbanked areas, have been key drivers of this growth.

NIBSS Instant Payment (NIP) is gaining ground

Transactions through the Nigeria Interbank Settlement System (NIBSS) witnessed a 47.99 percent increase in total volume, from 3.47 billion in 2021 to 5.14 billion in 2022. Total transaction value increased from ₦271.95 trillion in 2021 to ₦387.07 trillion in 2022. an increase of 42.33 percent year-on-year.

Regulatory initiatives drive the evolution of the payment system

The emphasis on the role of regulatory initiatives in driving the evolution of the Nigerian payment system plays a prominent role. The CBN’s PSV2020 and PSV2025 have played an important role 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.