Nigerians conducted N12.8 trillion in mobile transactions between January and September 2022, more than doubling the amount recorded in the same period last year and far exceeding what was recorded in 2020.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) for the years 2018 to 2022 support this. The NIBSS reports that in the first nine months of 2022, recorded mobile inter-scheme transactions in Nigeria increased by a startling 153% year over year from the N5.07 trillion recorded in the corresponding period of 2021. When compared to the same period in 2020 (N1.89 trillion), 2019 (N461.4 billion), and 2018, the total number of transactions for the current year represents an even greater margin (N216.4 billion).
Since the COVID-19 pandemic, which forced the use of more cashless forms of payment nationwide, mobile and electronic banking have become more popular. A closer examination of the data collected by the NIBSS revealed that during the review period, the volume of mobile transactions increased by more than 132%.
Particularly, more than twice as many mobile transactions (438.28 million) as those recorded in 2021 (284.5 million) were recorded. The amount spent through POS transactions in the first nine months of the year was N6.05 trillion, which is slightly less than the N6.4 trillion recorded in the entire year of 2021 with three months remaining in the year.
The biggest winners are banks and telcos
Commercial banks and telecom service providers in Nigeria have benefited from the use of mobile and other digital payment methods. This is so that banks can be charged for the majority of these transactions, while telcos benefit from increased data consumption.
The country’s listed telecommunications providers’ financial statements revealed impressive growth in data revenue. A massive N549.2 billion was generated by data for MTN Nigeria in the first nine months of the year, representing a 50% increase over the N366.18 billion made during the same period in 2021.
Similar to this, Airtel reported $431 million in revenue from their data business between April and September 2022, an increase of 22.8% from the $351 million realized during the same period the previous year.
Additionally, banks have made a fortune from commissions levied on online banking transactions. FBN Holdings reported N39.98 billion in e-banking revenue in the first nine months of the year, followed by Access Bank (N49.39 billion) and GTBank (N15.18 billion).
In Q4 2022, more spending is anticipated
It’s interesting to note that mobile transactions in the nation may increase even more in the final three months of the year, particularly during the Yuletide, which is marked by celebrations and higher spending.
As Nigerians in the diaspora visited their families during this time, spending increased. Most purchases were made using digital payment methods rather than the more conventional cash system.
In the meantime, the CBN has implemented a hawkish monetary policy by raising the cost of credit and removing liquidity from circulation in response to the country’s rising inflation rate. The amount of money in circulation as of September 2022 was N3.23 trillion, and the total amount of money in existence is almost N50 trillion.
Why it’s important
The CBN’s Financial Inclusion strategy, which aims to drastically reduce the number of unbanked and underbanked citizens by promoting cash-less forms of banking, is in line with the country’s growing use of mobile technology for transactions.
Additionally, in an effort to expand digital payment in the nation, the Central Bank introduced the digital currency, eNaira, in 2021. According to the apex bank, this currency saw 200,000 users and N4 billion worth of transactions in just one year.
The CBN governor noted that the adoption of the digital currency would increase Nigerians’ participation in the digital economy and boost financial inclusion there.
