September 4, 2018/FBNQuest Research
The latest data from a series from the NBS, produced in collaboration with the CBN, reveal that 510 million transactions valued at N33trn were recorded on electronic payment channels in Q2 2018. As expected, ATM transactions dominated with a volume of 217 million. Internet subscriptions directly correlated with electronic transactions stood at 103 million as at end-June, according to the Nigerian Communications Commission. This translates into a penetration of 56%.
Based on data from the Nigeria Inter-Bank Settlement System (NIBSS), total active bank accounts as at June 2018 stood at 73 million, pointing to 39% potential exposure (of the population) to electronic payment transactions. There is still vast room for improvement with regards to financial inclusion.
The volume of point-of-sale (PoS) transactions indicates the impact of the CBN’s cashless policy on the economy. The NBS data show that 67 million PoS transactions were recorded in Q2 2018, representing increases of 26% q/q and 105% y/y.
Meanwhile, mobile payments recorded 21 million transactions valued at N411bn (US$1.3bn) in Q2. The volume of transactions grew significantly by 79% y/y but accounted for only 4.1% of total electronic transactions (see chart below).
Volume of electronic payment transactions (%), Q2 2018
Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research
Broadening access to finance through digital means can unlock productivity and investments, reduce poverty, and help build stronger institutions with less corruption. However, better synergy between telecommunication operators and banks needs to be achieved for mobile banking (and e-payment transactions) to grow strongly in Nigeria.