Nigerians carried out N12.8 billion mobile transactions between January and September 2022, more than double what was registered in the same period of the previous year and even much more than what was registered in 2020.
This is according to Nigerian Interbank Settlement System (NIBSS) data from 2018 to 2022. According to NIBSS, registered mobile-to-scheme transactions in Nigeria grew by 153% year-on-year in the first nine months. 2022 of N5.07 trillion recorded in the comparable period of 2021. Total transactions for the current year represent an even higher margin compared to the same period of 2020 (N1.89 trillion), 2019 (N461.4 billion ), and 2018 (N216.4 billion).
Forms of mobile and electronic banking have been on the rise, particularly since the COVID-19 pandemic, which required the use of more forms of cashless payment across the country. A closer look at data tracked by NIBSS showed that mobile transaction volume increased by more than 132% in the review period.
Specifically, a total of 438.28 million mobile transactions were recorded, higher than the 284.5 million transactions recorded in 2021. Likewise, a sum of N6.05 billion was spent through POS transactions in the first nine months of the year, down slightly from the N6.4 trillion recorded in the full year of 2021, with three months to go in the year.
Banks and telcos are the biggest winners
The use of mobile devices and other forms of digital payment in Nigeria has also resulted in profits for Nigerian commercial banks and telecommunications service providers. This is because most of these transactions incur some charges for banks, even as telcos benefit from increased data usage.
A review of the finances of the country’s listed telecoms providers showed impressive growth in data revenue. MTN Nigeria generated a whopping N549.2 billion from the data for the first nine months of the year, a 50% increase from the N366.18 billion earned during the comparable period in 2021.
Similarly, Airtel earned $431 million from its data business between April and September 2022, an increase of 22.8% from $351 million in the same period last year.
Banks have also made a fortune from the fees charged for electronic banking transactions. FBN Holdings, in the first nine months of the year, recorded N39.98 billion as e-banking revenue, Access Bank (N49.39 billion) and GTBank raised N15.18 billion.
More spending expected in the fourth quarter of 2022
- Interestingly, mobile transactions in the country could increase even more in the last three months of the year, especially during Christmas characterized by festivities and increased spending.
- During this period, Nigerians in the diaspora would return home to their families, which would increase the amount of spending, most of which would be done using digital means of payment instead of traditional cash transactions.
- Meanwhile, due to the increase rate of inflation In the country, the CBN has adopted an aggressive monetary policy by increasing the cost of credit and removing liquidity from circulation. As of September 2022, the currency in circulation had risen to 3.23 trillion naira, while the money supply is almost 50 trillion naira.
why does this matter
The growing adoption of the mobile form of transactions in the country is in line with the CBN’s Financial Inclusion strategy, which aims to drastically reduce the number of unbanked and underbanked citizens by encouraging cashless forms of banking.
Also, the Central Bank launched the digital currencyeNaira in 2021 in a bid to grow digital payment in the country, which the major bank says saw 200,000 users and N4 billion worth of transactions in a year.
The CBN Governor noted that the digital currency would increase the participation of Nigerians in the digital economythus improving financial penetration in the country.
Edited by Emmanuel Abara Benson