Improvement in cash disbursements by banks to customers and the latter’s resistance to high charges across the country dealt a huge blow on operations of Point of Sale (PoS) terminals last month as transactions through the channel dropped by 17 per cent to N4.33 trillion.
This is just as the value of transactions through electronic payment (e-payment) channels in the country rose by 4.32 per cent, or N4.69 trillion, to N113.3 trillion during the period from N108.61 trillion in the preceding month, according to e-payment transactions data obtained from the Nigeria Interbank Settlement System (NIBSS).
Reviewing the data, analysts at Financial Derivatives Company Limited (FDC) said that while the value of transactions increased across all payment systems in May, there was a 17 per cent drop, monthon-month, in the value of Point of Sales (PoS) transactions.
It attributed the decline in the value of PoS transactions to customers’ resistance to “increased charges by PoS operators” as well as to the fact, according to the report, that banks now appear “more aggressive” in making cash available to their customers.
An analysis of the report indicates that the value of Nigeria Interbank Settlement System Electronic Fund Transfer (NEFT) transactions rose by 3.78per cent to N4.94 trillion in May from N4.76 trillion in the preceding month. The report also shows that that NIBSS Instant Payment (NIP) transactions increased by 5.49 per cent to N103. 72 trillion from N98.32 trillion in April.
The value of cheque transactions equally headed north last month as it rose to N298 billion from N287 billion from N273 billion in the preceding month. However, as earlier indicated, the value of PoS transactions dropped by 17.37 per cent to N4.33 trillion in May, from N5.24 trillion in April.
Analysts note that there has been increased adoption of e-payment in the country in recent years, as latest data released by the NIBSS shows that the value of electronic payment transactions in the country hit a record N1.07 quadrillion in 2024 compared with N6003.36 trillion in the previous year.
Industry watchers attribute this development to 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.
Indeed, in its report titled, “Instant Payments – 2020 Annual Statistics,” for instance, the NIBSS stated: “Covid-19 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 2023, thereby forcing bank customers, who were unable to access cash at the time, to adopt e-payment channels.
In fact, although the apex bank later jettisoned the naira redesign policy, analysts, who trace the lingering cash scarcity in the banking system to the fallout of that policy, point out that the challenges members of the public faced in trying to withdraw cash from banks, are primarily responsible for the recent increase in the number of people opting to become banking agents or PoS merchants.
