With a few days left to the end of 2024, available reports indicate that the total value of Point of Sales (PoS) transactions has so far risen by 38.27 per cent, or N4.11 trillion, to N14.86 trillion this year, from N10.74 trillion in 2023.
The increase was attributed to the rapid adoption of digital payment systems with PoS emerging as the most widely deployed in recent times.
Analysing the report from the Nigeria Interbank Settlement System (NIBSS), experts at Financial Derivatives Company Limited (FDC), which usually cites e-payment transactions data obtained from the NIBSS, noted that digital payment systems such as NIBSS Instant Payment (NIP), the NIBSS Electronic Fund Transfer (NEFT) and PoS, had experienced “significant growth” over the past five years, “as cheques become a less attractive payment method.”
New Telegraph’s analysis of data released by the NIBSS indicates that the monthly value of PoS transactions generally headed north for the most part of 2024.
For instance, the data shows that the value of PoS transactions stood at N850.09 billion in January 2024; N805.05 billion in February; N958.99 billion in March; N811.77 billion in April; N868.66 billion in May; N930.76 billion in June; N1.05 trillion in July; N1.198 trillion in August; N1.231 trillion in September and N1.84 trillion in October.
In an earlier report, FDC attributed the sharp increase in the value of e-payment transactions in recent times to the rapid adoption of PoS terminals by merchants as well as the growing use of PoS terminals for withdrawals.
Indeed, latest available data from NIBSS shows that total electronic payment transactions hit an all-time high in 2023 as it rose by 55 per cent to N600 trillion, compared with N387 trillion in 2022.
The data further indicates that the total value of PoS transactions for 2023 was N10.73 trillion compared with N8.39 trillion recorded in 2022, indicating a 27.85 per cent increase.
Also, the data shows that PoS terminals deployed across the country increased by 32.34 per cent or 744,533 to a record 3.05 million in July 2024, compared with 2.30 million in the corresponding period of last year.
Similarly, the data indicates that the total number of deployed PoS terminals in the industry increased from 2.45 million at the end of December 2023 to 3.05 million at the end of July this year. This implies that financial institutions deployed a total of 598,120 PoS terminals in the first seven months of this year.
Further analysis of the data shows a steady increase in the number of deployed PoS terminal between January and July this year.
Thus, the number of deployed PoS terminals stood at 2.48 million in January; 2.58 million in February; 2.69 million in March; 2.80 million in April; 2.85 million in May; 2.94 million in June and 3.05 million in July.
Analysts cite factors such as, the Central Bank of Nigeria’s (CBN) initiatives to promote the cashless policy, the impact of the 2020 Covid-19 crisis and the naira redesign programme introduced by the apex bank in late 2022 as the key drivers of increased adoption of e-payment in the country. Specifically, in its report titled, “Instant Payments – 2020 Annual Statistics”, the NIBSS stated:
“The Covid-19 pandemic changed the e-payments landscape, accelerating the adoption of instant payments as more people transitioned to electronic channels for funds exchange in the wake of government-imposed lockdowns.”
New Telegraph reports that implementation challenges with the CBN’s naira redesign policy led to an acute shortage of cash, which crippled economic activities across the country in the first quarter of last year, thereby forcing bank customers, who were unable to access cash at the time, to adopt e-payment channels.
Anecdotal evidence also suggest that the lingering cash scarcity in the banking system was responsible for the surge in the value of PoS transactions in October as more people became banking agents or PoS merchants to meet increased demand for cash from bank customers who were frustrated by their inability to withdraw cash from ATMs or banking halls.
Commenting on the lingering cash scarcity in the keynote address that he delivered at the Chartered Institute of Bankers of Nigeria’s (CIBN) 59th Annual Bankers’ Dinner, in Lagos, on November 29, CBN Governor, Olayemi Cardoso, said the apex bank was concerned about the situation and would sanction financial institutions found failing to ensure that their Automated Teller Machines (ATMs) are constantly loaded with cash.
Also in line with its efforts to tackle cash scarcity, the apex bank, on December 17, issued a circular on “cash-out limits for agent banking transactions,” which saw it restricting PoS agents to a daily transaction limit of N1.2 million and also introducing a daily transaction limit of N100,000 per customer for cash-out transactions conducted by the agents.
