Nigeria’s bid to embrace cashless policy has received a boost as data from the Nigeria Inter-Bank Settlement System (NIBSS) revealed that the value of transactions done across Point of Sale (PoS) channels in the country witnessed an increase from N1.14 trillion recorded between January and May 2019 to N1.64 trillion within the same period in 2020.
This is even as the total volume of PoS transactions also increased from 152.6 million to 228.86 million within the period under review. This indicates that the volume increased by 76.26 million, or 49.9%.
Based on this data, Nigerians spent more using PoS, which reflects spending patterns of Nigerians via merchant outlets such as restaurants, supermarkets, retail markets and shops, shopping malls, etc than they did since 2017 (January – May alone).
The increasing trend persisted between January and May 2020, except for April when it dropped to N272 billion. As the effect of the COVID 19 pandemic bites harder, the total volume of payment transactions across Nigerian payment channels fell by a whopping 26% in April compared to the preceding months.
However, there are indications that Nigerians’ spending patterns increased within five months. The latest report released by the National Bureau of Statistics (NBS), which measures Nigeria’s spending pattern in both food and non-food items, revealed that of the total, 56.65% of the household expenditure was spent on food, with the balance of about 43.35 spent on non-food items. These and others are the items Nigerians purchase using PoS.
According to the definition, Household consumption refers to the amount spent personally by all Nigerians to acquire goods and services within the country, especially food consumed outside the home. The data is based on household consumption only and excludes consumptions from the private sector, government, and exports.
An analysis of the NIBSS data shows that in January 2020, N313.43 billion worth transactions were carried out through the channel, it increased to N326.03 billion in February. While the value also rose to N368.86 in March (highest so far in 2020), it fell to N272.05 billion in April (reason stated above). But it later rose to N358.10 billion in May.
The use of interbank instant payments on USSD platforms by bank customers received a significant boost, as transactions through NIBSS Instant Payment (NIP) rose to N48.65 trillion, up from N41.48 trillion within the same period. This means transactions through NIP rose by 17.28% (N7.17 trillion) in five months.
The highest value of transactions recorded through NIP was recorded in March (N10.9 trillion) while the lowest was recorded in April (N7.01 trillion).
On the other hand, further analysis shows that transactions done through mobile transfers (Mobile Inter-scheme Transactions) increased to N853.5 billion (higher than the N828 billion recorded in 2019) from N183.68 billion recorded within same period in 2019.
According to the NIBSS data, mobile transfers done between January and May 2020 recorded a 364.6% rise. The biggest mobile transfer recorded was done in May (N230.23 billion), compared to N133.21 billion in January 2020.
