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In a notable shift towards digital financial solutions, cashless transactions in Nigeria witnessed a substantial uptick, soaring to N611.06 trillion in 2023 from N395.38 trillion in the previous year. This remarkable year-on-year growth of 54.6%, as reported by the Nigeria Inter-Bank Settlement System (NIBSS), underscores the increasing reliance on digital payment methods within the country.
Utilizing data from NIBSS, the surge in cashless transactions primarily encompasses NIBSS Instant Payment and Point of Sale (POS) transactions. NIBSS Instant Payments, introduced in 2011, serves as a real-time inter-bank payment solution based on account numbers, ensuring immediate value delivery to the intended beneficiary. The substantial increase in cashless transactions reflects a noteworthy transition towards digital payment solutions, signaling the evolving landscape of financial transactions in Nigeria.
Upon closer examination of the data, it is revealed that electronic payment channels were utilized 11.05 billion times in 2023, marking a robust 75.96% increase from the 6.28 billion times recorded in 2022. The total value of instant payments in 2023 amounted to N600.36 trillion, with POS transactions contributing N10.7 trillion to the overall figure. Analysts suggest that the Naira redesign program, causing a cash crunch in Q1 2023, may have acted as a catalyst for these impressive numbers, as the populace turned to available electronic banking platforms for transactions.
Nigeria’s digital payments industry, historically underutilized, is now on the cusp of substantial expansion in the years ahead. A combination of robust industry fundamentals, favorable demographic trends, and supportive regulatory frameworks has set the stage for the anticipated rapid growth of digital payments. This optimistic outlook has attracted significant interest from investors, leading to substantial investments as current market participants strategically position themselves for future expansion.
As the digital payments industry undergoes improvements in transaction reliability, platform security, and increased awareness of usage benefits, the trajectory for cashless transactions is expected to experience continued growth in the coming years.