Cashless Transactions Grow 54.6% to N611.06trn in 2023

By CSL Research

Using data sourced from the Nigeria Inter-Bank Settlement System (NIBSS), cashless transactions, encompassing NIBSS Instant Payment and Point of Sale (POS) transactions, witnessed a substantial increase in Nigeria, reaching N611.06 trillion in 2023 compared to N395.38 trillion in the preceding year, denoting a remarkable year-on-year growth of 54.6%.

Introduced in 2011 by NIBSS, NIBSS Instant Payments is a real-time inter-bank payment solution based on account numbers. It stands as the preferred funds transfer platform within the Nigerian financial industry, ensuring immediate value delivery to the intended beneficiary.

This surge in cashless transactions signifies a significant shift towards digital payment solutions, reflecting the evolving landscape of financial transactions in Nigeria.

Further analysis of the data showed that electronic payment channels were used 11.05bn times in 2023, a 75.96% rise from the 6.28bn times they were used in 2022 while the total value of instant payment in 2023 was N600.36trn and POS transactions was N10.7trn.

In our view, the Naira redesign program which led to a cash crunch in Q1 2023 may have been a catalyst to the numbers as the populace had to rely on the available electronic banking platforms to carry out transactions.

Nigeria’s digital payments industry, which has been notably underutilized, is on the brink of substantial expansion in the upcoming years.

A convergence of factors, including robust industry fundamentals, favorable demographic trends, and supportive regulatory frameworks, have laid the foundation for the anticipated rapid growth of digital payments in Nigeria.

This outlook has captured considerable interest from investors, resulting in substantial investments as current market participants strategically position themselves for future expansion.

As the industry experiences a marked decrease in transaction failures, enhanced platform security, and increased awareness of usage benefits, the trajectory for cashless transactions is expected to grow in the coming years.