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Transaction central support9/7/2023 ![]() ![]() The total volume of the Inter Bank Settlement Scheme Instant Payment Platform transactions rose by 613.1% to 5.2 billion in 2022 from 729.2 million in 2018. In 2022 the volume of transactions performed electronically in Nigeria surged to the highest in five years. According to February 2022 data only 39% of Nigerians use the formal banking system.Īs has been shown elsewhere, mobile money offerings, as well as other digital services, can extend banking to the unbanked. In 2021 Nigeria had 122.3 million active bank customers. Can you paint a picture of the banking landscape? MTN is the largest mobile network operator in Nigeria. In 2022, the Central Bank of Nigeria issued MTN the first license to operate mobile money services. The exception has been Kenya, where the launch of MPesa in 2007 led to a massive uptake in mobile financial services. As with most other countries on the continent, mobile money uptake in Nigeria has been slow. Those offering this service include MTN and Airtel Africa. A bank account is not required to use mobile money services – the only pre-requisite is a basic mobile phone. Mobile money: Financial service offered by a mobile network operator and can be independent of the traditional banking network. Digital platforms didn’t have the ability to cope with the deluge of online transactions. During the currency crisis, for example, platforms collapsed and customers were unable to transact. However, the services aren’t always reliable. Online banking offered by traditional banks: All Nigerian banks offer online services. They include Flutterwave, Piggyvest, OPay, Interswitch, Kuda and Remita. A number of companies offer these services in Nigeria. Examples are Hope and MoneyMaster.įintechs: This includes any app, software, or technology that allows people or businesses to digitally access, manage, or gain insights into their finances or make financial transactions. Payment service banks: These are technology driven companies licensed by the Central Bank to engage in banking activities. They are now ubiquitous throughout Nigeria - in supermarkets, large retail outlets as well as in small-scale businesses set up for this purpose only. Point of Sale (PoS): These devices are installed both by traditional banks as well as by payment service banks. What are the most developed forms of electronic transacting in Nigeria? Total cashless transactions also rose by 45.41% year-on-year to N39.58 trillion (US$85.96 billion) in January 2023. There was a 40.69% year-on-year increase from the N573.72 billion (US$1.24 billion) transactions that was done in January 2022 to N807.16 billion (US$1.75 billion) in January 2023. It also resulted in a surge in point of sales transactions in Nigeria. Their operations are regulated by the Central Bank. Merchants and PoS operators handle the machines. ![]() In 2017, there were around 155,000 terminals, and this number has increased to roughly 1.1 million as of April 2022. Between 20, the number of point of sale terminals in Nigeria grew significantly. ![]() One outcome was that Nigerians sought alternative ways to pay for goods and services using digital alternatives, such as point of sale machines. The ensuing scarcity of cash made life unbearably hard for Nigerians. The country was plunged into a currency crisis when all old notes were out of circulation and the new notes were hardly circulating. The Central Bank set a deadline of 31 January 2023 for all old notes to be deposited in banks in exchange for new. How did the botched currency changeover affect the way Nigerians used the banking system? The Conversation Africa’s Wale Fatade asks Iwa Salami, an expert in financial technology regulation and financial regulation in emerging economies, to explain the increase and its implications. Digital financial services are financial services which rely on digital technologies for their delivery and use by consumers. But it also led people to turn to digital financial services such as the use of point of sale (PoS) machines for payments in their transactions. The rollout of the currency change was shambolic. ![]() At the same time it also capped withdrawal of the new banknotes. At the end of 2022 the Central Bank of Nigeria launched new banknotes. ![]()
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