Top three uses of digital payments in Nigeria
There may be little doubt that digital payment is increasingly gaining followership in Nigeria going by data from various agencies in the country.
Nigerians spent 4.4 trillion naira on electronic related payments in the first half of 2017, according to data from Financial Derivatives Company.
A breakdown of the volume transactions in July 2017 saw Point of Sales (PoS) at 13.52 per cent to 12.7 million; cheques 5.18 per cent to 955,076; NEFT 20.17 per cent to 1.68 million; instant transfers 13 per cent to N32.25 million.
At a recent masters class organised by the Lagos Business School (LBS), Jonah Adams, Chief Strategy Officer of Interswitch Group told Masters Students at the school what the top three uses of digital payments were.
Interswitch Group is one of the foremost fintech companies in Nigeria with an array of products that have redefined the way people make payments in Nigeria. Two of their popular products include QuickTeller and Verve card.
“We have grown from a billion to 40 billion in transactions. The market, consumers and fintech organisations are ready (for innovation),” Adams told the students.
There is every reason to believe Adams’ list of top three uses of digital payments. His list includes:
For one, money transfers in Nigeria have seen signification traction in the last couple of months. The two platforms used for money transfers are the NIBSS Electronic Fund Transfers (NEFT) and National Instant Payment (NIP).
NEFT is an irrevocable fund transfer instruction where a bank simply captures a customer’s funds transfer instructions electronically. It is best suited for bulk transactions like salaries and it takes a minimum of 24 hours to become effective because it has to go through clearing process.
NIP refers to the first point to point funds transfer services that guarantees instant value to the beneficiary. It takes less than two minutes to be effective and it’s made for single or individual funds transfer.
According to latest data, Nigerians carried out N6 trillion in 11.57 million transactions on NEFT while over N26.47 trillion in 150.48 million transactions went to NIP. Average daily transaction volume on NIP platform, whether on mobile applications or web-based platforms stood at 831,385 valued at N176, 044.
Airtime purchase using digital payment is also rising as collaboration between network operators and financial services grow. An August data from the Nigerian Communications Commission (NCC) set the number of active lines in Nigeria at 139.444 million while total connected lines stands at 240.769 million. As mobile subscriber base grow, the number of internet users is also growing. As at July the NCC reported that there were about 91 million internet users in the country.
The banks in contrast have not experienced the same growth. Following the Bank Verification Number (BVN) exercise, the number of Nigerians with bank accounts was at 20.8 million. Currently the total number of unique bank customers is less than 30 million.
It does make sense that collaboration has become the only way to give many more unbanked Nigerians access to banking services. With digital payments more and more people are able to make purchases using their phones and not necessarily their bank accounts.
This requires no hard thinking. Everyone pays for one bill or the other, but what is the one way to ensure that it is convenient, easy and fast?
Every single payment application has options for different bill payments as well as airtime recharge.
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