Cashless Transactions in Nigeria Jump to N318.66trn in 11 Months

By Adedapo Adesanya

New data from the Nigeria Inter-Bank Settlement System (NIBSS) has shown that cashless transactions in Nigeria rose by 41.8 per cent to N318.66 trillion in the first 11 months of 2022.

The N318.66tn amounted to the total amount processed on the Nigeria Instant Payment (NIP) System and Point of Sales (PoS) terminals, which is how cashless transactions are monitored on the NIBSS.

In the corresponding period of 2021, the figure was N224.79 trillion.

Giving a breakdown, the total NIP transactions for the period was N311.81 trillion, and PoS transactions amounted to N6.85 trillion. This indicated a strong uptake in digital payments in the nation, which has sustained growth in electronic payment since the COVID-19 pandemic spurred the embrace of digital payment channels in 2020.

This has been projected to continue to increase as the Central Bank of Nigeria (CBN) recently placed fresh limitations on cash withdrawals at over-the-counter (OTC), PoS, and Automated Teller Machines (ATMs) in the country.

OTC cash withdrawals were restricted to N100,000 for individuals and N500,000 for corporations, with a processing fee required of up to 10 per cent to access more.

When the policy takes effect on January 9, ATMs will no longer dispense Nigeria’s high denominations of N500 and N1,000, but N200 as the highest, while withdrawals from ATMs and point-of-sale terminals also will be limited to N20,000 daily and N100,000 weekly.

According to the statement signed by Mr Haruna Mustafa, cash withdrawals may be permitted in “compelling circumstances, not exceeding once a month, and this would require a plethora of steps.

Policymakers say the withdrawal limits and recent monetary initiatives from the central bank would bring more people into the banking system and curb currency hoarding, illicit flows, and inflation.

However, other analysts worry that the initiative could hurt daily transactions that people and businesses make, given the unreliability of digital payments in Nigeria as well as the 37 million Nigerians not unbanked who prefer cash.