Electronic payment continues to gain traction in Nigeria as more people use Point of Sales (PoS) terminals
Nigerians transacted businesses valued at N2.5 trillion through Point of Sales (PoS) terminals between January and October this year, New Telegraph has learnt. This represented 38.8 per cent growth when compared with N1.8 trillion recorded in the same period last year.
Latest statistics released by the Nigeria Inter-bank Settlement Systems (NIBSS) showed that the electronic payment channel recorded steady growth in usage in the last 10 months. The data also indicated that the value of PoS transactions in the 10-month period surpassed N2.3 trillion in the entire 12 months of last year.
According to NIBSS, volume of PoS transactions within the period stood at 350.6 million. This also indicated 56 per cent growth over 224.5 million recorded in the same period in 2018.
Analysis of monthly statistics showed that transactions worth N222.9 billion were carried out over the electronic platform in January, while N193.4 billion was recorded in February. In March and April, N217.4 billion and N246 billion were recorded respectively. Nigerians spent N257.7 billion over PoS terminals in May while N245.9 billion was recorded in June.
In July, value of PoS transactions stood at N279.4 billion, while highest transaction value in the 10-month period was recorded in August as Nigerians transacted businesses worth N294 billion over the platform. Transactions value for September and October stood at N283.3 billion and N287.7 billion respectively.
Indicating increase in demand for PoS machines by merchants, the NIBSS report showed that registered terminals rose to 404,283 as at October. However, by same period, only 273,082 have been deployed. This means that a total of 131,201 registered machines are yet to be deployed.
According to analysts, the huge growth in PoS is due to a combination of factors such as increased adoption by SMEs, chain business owners etc; increased awareness as well by cardholders, who ask for the POS from business owners when making payments; and improved dispute resolution process for failed transactions.
However, stakeholders are worried that the recent introduction of stamp duties on PoS transactions may reverse the gains recorded over the years, even as they fear that the government’s cashless policy would be negatively affected. Already, filling stations, supermarkets and other merchants using PoS machines have started adding the fees to their customers’ bills after purchases. Before now, fees are paid by merchants on the aggregate PoS transactions carried out on a particular period, which was never passed to customers. However, a CBN’s directive issued September 17, 2019 compelled banks to charge N50 Stamp Duty on individual transactions, rather than merchants’ accounts.
According to Executive Director at Inlaks, an integrated payment system company, Mr Tope Dare, the policy will discourage many from using PoS and in effect slowing down the cashless policy of CBN.
“Some small merchants who know the impact such charges may have on their sales are also considering dropping the machines to collect cash. While the big merchants like filling stations and superstores may not toe that line, the customers would not want to be paying extra charges and may go for cash payment instead of using their cards,” he said.
While noting that the CBN may have good intention in introducing the charges, he said impacts of the policy must be evaluated by the regulator to see how it has fared.
“Whenever regulators issue policy, they should go out to test impact. They must be able to know whether it is working or not or whether it is having different effect from what was intended. When we just issue policies and sit down in our offices, we may have problems,” he said.
Also speaking, Mr Festus Akwaja, a financial analyst, said the implementation of the PoS charges was capable of weakening the financial inclusion drive and financial development goal as a whole. He added that the stamp duty charge was an anti-financial inclusion policy as it is capable of discouraging small businesses and the very poor from coming into the banking space.
“We suggest that CIBN should make presentation to the authorities for certain set of businesses, accounts and payment platforms such as the PoS to be exempted from the stamp duty charges,” he said.