Nigeria is witnessing a major shift towards digital payments, anticipating a 32% decline in cash payments by 2030, according to the Worldpay Global Payment Report 2024. This transition reflects improved financial access through smartphones and significant growth in electronic transactions. Key statistics indicate a surge in active bank accounts, A2A payment methods, and overall e-payment volumes, positioning Nigeria as a leader in digital payment adoption within the region.
Nigeria is experiencing a significant transition towards digital payment platforms, with projections indicating a 32 percent decline in cash payments by 2030, as reported in the Worldpay Global Payment Report 2024. The expansion of smartphone access has empowered numerous individuals in remote areas to participate in the global economy by facilitating their connection to financial services.
In the Middle East and Africa, Nigeria currently holds the highest percentage of cash payments at point-of-sale (PoS) transactions, accounting for 40 percent in 2024 compared to 91 percent in 2019. This figure stands in stark contrast to countries such as Saudi Arabia, where cash transactions comprise only 22 percent, while South Africa and the UAE report 30 percent and 17 percent, respectively.
Financial inclusion has improved considerably in Nigeria, with the World Bank noting that the percentage of banked individuals rose from 30 percent in 2011 to 45 percent in 2021. Similar advancements were observed in South Africa, where the banked population increased from 54 percent to 85 percent during the same period. Notably, the Nigerian Inter-Bank Settlement System (NIBSS) documented a surge in active bank accounts, reaching 311 million by 2024, reflecting the country’s swift financial transformation.
The report also outlines that account-to-account (A2A) transfers through the NIBSS Instant Payments (NIP) have become the leading method of e-commerce payment in Nigeria. A2A payments via the Nigerian Quick Response (NQR) code rank second among payment methods at the PoS, demonstrating a robust shift towards instant payments within the country.
Recent statistics reveal that electronic payment transactions have skyrocketed to N1.07 quadrillion in 2024, marking a remarkable 79.6 percent increase from the N600 trillion recorded in 2023. The volume of electronic payments also showed significant growth, with the total number of transactions rising from 9.7 billion in 2023 to 11.2 billion in 2024, an annual growth of 15.5 percent. PoS transactions alone reached N19.4 trillion in 2024, showcasing an impressive 81 percent increase from N10.73 trillion in 2023.
Experts attribute this surge in electronic transactions to various factors, including cash shortages experienced in early 2023 and the ongoing enforcement of the Central Bank of Nigeria’s cashless policy. The Global Payment Report highlights that, within the Middle East and Africa, e-commerce transactions have evolved from accounting for 29 percent of total value in 2014 to 49 percent by 2024, bringing them close to the combined cash and card transaction value of 51 percent.
By 2030, digital payments are anticipated to dominate the e-commerce landscape, comprising 65 percent of transaction value. The report further notes that the evolution of digital payments at PoS has been striking. In 2014, digital payments merely represented 1 percent of PoS transaction value; however, this figure has surged to one-third of the market by 2024. Projections suggest that digital payments will account for 47 percent of PoS transaction value by 2030, closely rivaling traditional cash and card payments.
In conclusion, Nigeria is poised to undergo a transformative shift in its payment landscape, driven by the increasing adoption of digital payment systems. With significant reductions in cash transactions expected by 2030 and a substantial rise in electronic payment activity, the country stands to benefit from enhanced financial inclusion and participation in the global economy. The concerted efforts of financial institutions and policy implementations are critical in facilitating this transition.
Original Source: tribuneonlineng.com
