The Rise of POS and Mobile Payments in Nigeria’s Digital Economy
Despite Nigeria’s strong reliance on cash, digital payment adoption is rapidly increasing. Data from the Nigeria Interbank Settlement System (NIBSS) reveals a significant surge in instant payment transactions, highlighting a shift towards a more digitized economy. This growth is largely fueled by the convenience and accessibility of mobile and Point of Sale (POS) systems.
NIBSS Instant Payments Driving Growth
The NIBSS Instant Payments (NIP) system, which facilitates real-time Electronic Funds Transfer (EFT) across various electronic channels like mobile banking, USSD, internet banking, POS terminals, ATMs, and web platforms, is a key driver of this digital payment boom. In the first quarter of 2021, the value of transactions processed through NIP reached a record N58.8 trillion. This represents an impressive 88.4% increase compared to the same period in the previous year, and an 11.2% rise from the last quarter of 2020. Transaction volumes also mirrored this upward trend, with 734,056 transactions recorded during the quarter, more than double the 366,904 processed in the first quarter of 2020. While the volume growth compared to the fourth quarter of 2020 was a more modest 5.7%, the overall figures demonstrate the accelerating adoption of digital payments in Nigeria, with POS and mobile channels playing a pivotal role.
In conclusion, the exponential growth in digital payments, particularly through POS and mobile channels facilitated by the NIBSS Instant Payments system, indicates a significant transformation in Nigeria’s financial landscape. While cash still holds a dominant position, the convenience and efficiency of digital alternatives are clearly gaining traction, paving the way for a more cashless future.
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