ATM: Fintech, cashless policy change consumers’ spending pattern


March 8, 2018 | 12:44 am
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Data show Nigerians are rapidly adopting financial technologies (fintech), as they adjust spending pattern based on availability of automated teller machine (ATM) points.

According to Electronic Payment Channels in the Nigeria Banking Sector report published by the National Bureau of Statistics (NBS), Nigeria’s statistical authority, in February 2018, a total volume of 461,980,541 transactions valued at N29.44 trn were recorded in the three months ending December (Q4) 2017.

Automated Teller Machine (ATM) transactions dominated the volume of transactions recorded; 239,692,229, that is, 52 percent of total volume of ATM transactions valued at N1,833 bn recorded in Q4 2017 were done on ATMs.

Consumers who have ATM points close to their residences are delaying their purchases until late in the evening as they commute home because they are confident the machines would dispense cash on demand and save them the stress of carrying cash around all day. Their expectations sometimes get sorely disappointed though. They meet ATMs without cash.

“Availability of ATM points has changed the way I spend money. It is easier and more convenient to withdraw closer home. Truth also is that I tend to spend more now because I can withdraw even during weekends” 26 years old Harriet Odunfah, junior executive at a multinational company said.

In countries such as Nigeria, the adoption of digital networks has helped address some of the risk factors inherent in typical cash-based systems by offering an alternative. Cash and card-based transactions are slowly being replaced by new payment systems.

Mobile money, for example, facilitates phone-to-phone and phone-to-ATM transactions, which is more convenient and less susceptible to the threat of theft than dealing in cash. Uzoma Dozie, MD/CEO of Diamond Bank in Nigeria, attributes their recent unprecedented level of customer acquisition – from 6 million in 22 years to the same figure in just 2 years – to such a system.

Another Fintech improving the ease of payments and consumers’ shopping experience is the Point of Sales (PoS) machines. POS transactions rose by over 85 percent in 2017.

According to the Nigerian Inter-Bank Settlement System (NIBSS), a total of 1.4 trillion PoS transactions were carried out in 2017. The report shows that there were about 155,462 active terminals. This is the highest ever growth witnessed in the PoS market, since 2012, when the Central Bank of Nigeria (CBN) introduced the cashless policy. The highest transaction valued at N167.58bn was recorded in December while the lowest payment of N91.29bn on the PoS was done in January.

In 2017, PoS transactions in Nigeria rose by 85.75 per cent from N0.758 trillion recorded in 2016. The value of electronic bills payment also rose in 2017 peaking at N550.75bn. This is a 62.3 per cent increase in the value of transactions compared with N339.42bn recorded in 2016.

The adoption of digital networks in the financial sector will continue to be a disruptive force with a far-reaching impact, particularly for the bottom of the pyramid consumers.  Disadvantaged and low-income segments of society are able to gain access to basic financial services.



March 8, 2018 | 12:44 am
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