Digital Payments Lag in Nigeria’s Informal Economy
Despite significant advancements in financial technology across Nigeria, a large portion of the informal economy continues to rely heavily on cash transactions. A recent report by Moniepoint, titled the 2025 Informal Economy Report, highlighted that only approximately 25% of informal businesses in Nigeria generate at least 10% of their total revenue through digital payment methods. This contrasts sharply with the country’s surging digital payment landscape.
Cash Remains King for Many MSMEs
This statistic presents a significant contrast to the rapid growth of digital payments elsewhere in Nigeria. Data from the Central Bank of Nigeria indicates a substantial 34.06% increase in internet and mobile banking transactions, reaching a staggering ₦647.05 trillion ($439.86 billion). However, this growth doesn’t reflect the reality for a large segment of the economy. For countless small business owners, from street vendors to market traders, cash continues to be the preferred and trusted method of conducting business. Micro, Small, and Medium-sized Enterprises (MSMEs) are vital to Nigeria’s economic structure, contributing nearly 65% of the GDP and providing employment for over 80% of the workforce. The report underscores that for many of these businesses, digital payments are often seen as an optional extra, rather than an essential component of their operations. The report emphasizes this point with the statement: “For most informal businesses, digital payments are an option, and typically not the full story.”
In conclusion, although Nigeria’s digital payment sector is booming, the adoption of digital payments within the informal economy is significantly lagging. The report’s findings underscore the need for targeted strategies to encourage digital payment adoption among MSMEs, which are crucial for the overall economic prosperity of Nigeria.
Keywords
Related Keywords: informal businesses, digital revenue, online payments, small business, digital adoption, revenue generation, mobile payments, ecommerce, digital transformation, business growth
