Instant transfers have become the dominant force in Nigeria’s cashless economy, driving a remarkable surge in electronic transactions that reached N572 trillion in just the first seven months of 2024. This represents an impressive 84.37% increase compared to the previous year, according to data from the Nigeria Interbank Settlement System (NIBSS).
As of the end of 2023, cashless transactions had already grown significantly, rising from N395.38 trillion in 2022 to N611.06 trillion. Experts predict that these figures will continue to climb as more Nigerians embrace digital payment methods.
The NIBSS data highlights that instant payments alone accounted for N566.39 trillion of the total cashless transactions, marking an 86.44% increase during this period. In contrast, Point of Sale (POS) transactions—once a key player in the cashless movement—have seen a decline. POS transactions dropped by 8.19% to N6.23 trillion, reflecting a shift in consumer preferences towards instant transfers.
The Central Bank of Nigeria (CBN) initially promoted the use of POS systems and agent banking in 2013 to enhance financial inclusion and facilitate a cashless economy. Since then, the number of registered POS terminals has skyrocketed by over 800%, reaching approximately 4.06 million by July 2024. Despite this growth in infrastructure, the recent decline in POS usage suggests changing consumer habits.
Experts attribute the rise of instant transfers to several factors, including increased smartphone penetration and the emergence of mobile money operators like OPay and PalmPay. These platforms have significantly influenced how Nigerians conduct financial transactions, particularly in underserved or remote areas where traditional banking services may be limited.
The CBN’s policies, including transaction limits introduced in 2022, have also played a role in this shift. Although these limits were eventually lifted, they encouraged consumers to explore alternative banking channels such as internet banking, mobile apps, and USSD services.
The growth of mobile technology has transformed payment behaviors across Nigeria. Many businesses and individuals now prefer using mobile apps for transactions over traditional methods like ATM withdrawals or POS payments. For instance, reports indicate that even informal vendors and drivers are increasingly accepting transfers instead of cash.
The CBN aims to further enhance Nigeria’s electronic payment infrastructure through its Payments Vision 2025 initiative, which envisions a significant reduction in cash transactions by that year. This aligns with global trends toward digital payments and reflects a broader commitment to improving financial inclusion across the country.
While instant transfers are leading the charge in Nigeria’s cashless boom, POS transactions are experiencing a notable decline. As digital payment methods become more prevalent and accessible, it is clear that Nigeria is on a transformative path towards a more cashless economy.
