Olufemi Adeyemi 

The Nigeria Inter-Bank Settlement Systems (NIBSS) has disclosed that Nigerians utilized electronic channels to spend a total of N89.5 trillion in July 2024.

The latest e-payment statistics indicate that this figure marks the highest monthly transaction value ever recorded on the NIBSS Instant Payment (NIP) platform.

This amount reflects an 89% increase compared to the N47.4 trillion reported during the same month last year.

As a result, the cumulative value of electronic transactions in Nigeria from January to July 2024 has reached N566.3 trillion. This seven-month total is nearing the N600 trillion recorded for the entire year of 2023, with five additional months of data still to be accounted for this year.

The number of NIP transactions processed by NIBSS also rose significantly, increasing from 743 million in July 2023 to 907 million in July 2024, which is a 22% year-on-year growth.

Industry experts attribute the rise in e-payment transactions to the recent cash shortages and the Central Bank of Nigeria's (CBN) cashless policy, which restricts daily cash withdrawals.

Under the updated cashless policy, effective January 9, 2023, individual cash withdrawals are capped at N500,000 per week, while corporate entities are limited to N5 million weekly.

Mr. Adewale Adeoye, a financial analyst based in Lagos, noted that the scarcity of cash in banks has driven more Nigerians to adopt cashless payment methods. He explained that those in urgent need of cash often turn to Point of Sale (PoS) operators, using their cards or transferring funds to receive cash.

He anticipates that electronic transactions will continue to rise, as banks are increasingly reluctant to dispense cash as they did previously. In addition to the CBN's withdrawal limits, customers may find that banks restrict over-the-counter cash withdrawals to as little as N5,000.

You find yourself relying on ATMs, which often lack sufficient cash. If that option is unavailable, you begin searching for point-of-sale operators or consider making mobile transfers, he stated.

The NIBSS Instant Payments (NIP) is a real-time interbank payment solution based on account numbers, established by NIBSS in 2011. It serves as the preferred platform for fund transfers within the Nigerian financial sector, ensuring immediate value delivery to recipients.

Over the years, NIBSS has enabled Nigerian banks to offer NIP through a variety of channels, including internet banking, physical bank branches, kiosks, mobile applications, Unstructured Supplementary Service Data (USSD), point-of-sale (POS) systems, and ATMs. 

The recent cash scarcity experienced in March, coupled with the Central Bank of Nigeria's revised cashless policy that restricts daily cash withdrawals, has further accelerated the growth of electronic payments. As a result, many Nigerians are increasingly adopting mobile transfers and utilizing payment methods such as POS and USSD.