The Nigeria Inter-Bank Settlement System (NIBSS) reported a significant surge in cashless transactions, reaching a record N611.06 trillion in 2023, up from N395.38 trillion in 2022, reflecting a 54.55% annual growth.
The NIBSS Instant Payments (NIP) has played a pivotal role in driving this monumental shift. Launched in 2011, NIP is an account-number-based, real-time inter-bank payment solution. It has evolved into the favored funds transfer platform within Nigeria’s financial sector, ensuring instantaneous value for the recipient.
Financial institutions in Nigeria have diligently promoted NIP across diverse channels such as internet banking, bank branches, mobile apps, Unstructured Supplementary Service Data (USSD), point of sale (POS) terminals, and automated teller machines (ATMs) to serve their customers.
An in-depth analysis revealed that electronic payment channels were utilized 11.05 billion times in 2023, marking a substantial 75.96% surge from 2022’s 6.28 billion times. The total value of instant payments in 2023 amounted to N600.36 trillion, with point of sale transactions contributing N10.7 trillion, and being relied upon for 1.38 billion transactions.
The remarkable upsurge in cashless transactions signifies a growing acceptance of digital payments among Nigerians, signaling a significant shift in consumer behavior.
Notably, December 2023 saw the highest electronic transaction value, totaling N71.9 trillion, attributed to heightened festive season spending. Similarly, March 2023 witnessed a peak in transaction volume, totaling 1.1 billion, driven by cash scarcity, compelling Nigerians to resort to electronic channels for their transactions. However, the March transaction value did not match the December peak.
Moreover, the volume of transactions processed by NIBSS surged from 5.1 billion in 2022 to 9.7 billion in 2023, marking an impressive 90% year-on-year increase.
Month-by-month analysis reveals fluctuations in electronic transaction values, with January 2023 recording N38.9 trillion, followed by N36.8 trillion in February. The scarcity of physical cash in March led to a spike, reaching N48.3 trillion. Subsequent months also witnessed substantial values, with the highest recorded in December.
The surge in cashless transactions can be partially attributed to the Central Bank of Nigeria’s naira redesign policy and withdrawal limits introduced in December 2022. Following these measures, the apex bank encouraged customers to leverage alternative channels such as internet banking, mobile apps, USSD, cards/POS, and eNaira for their banking transactions.
