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The payments industry in Nigeria continues to demonstrate its promising growth with the recent data from the Nigeria Inter-Bank Settlement System (NIBSS) showing solid growth across the various e-payments channels in the first 9 months of 2020. NIBSS Instant Payment (NIP) transactions recorded a healthy 39.4% y/y and 66.8% y/y growth in transaction value and volume to N105.3tn and 1.3bn respectively.
For POS transactions, total transaction value and volume grew 185.7% y/y and 42.7% y/y respectively to N6.4tn and 440.9m respectively. The most impressive growth was recorded in the Mobile Interscheme transfers category where transaction value and volume grew 311.1% y/y and 341.0% y/y toN1.9tn and 88.2m respectively.
The sustained growth in e-payments transaction volume and value in Nigeria evidence increased adoption of technology in payments and cash transfers by the Nigerian populace. This is driven by increasing internet & mobile penetration as well as investment by banks and other payment-based fintechs in payment technology infrastructure.
The remarkable rise in Mobile inter scheme transfers has been supported by the pandemic which has made many Nigerians resort to banking apps and USSD transfer channels to transfer funds. Furthermore, we note that recent lifting of covid-19 restrictions has led to recovery in NIP transactions and POS transactions.
Going forward, we expect the e-payments industry to continue to record significant growth even beyond the pandemic. In our view, the payments industry and the Fintech ecosystem as a whole represent the next growth frontier for Nigeria (See CSL_Nigeria’s Fintech Industry 2020; Growth Frontier of the New Decade).
This is already being seen with foreign capital flowing into the sector for example Stripe’s recent US$200m acquisition of Nigerian-based payment company, Paystack.
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