Electronic Payments Rise to N48 Trillion Over Naira Crisis, as CBN Bars Banks From Operating PoS
The use of Point of Sale (PoS) terminals meant for merchants for cash-in and cash-out transactions by agents has been prohibited by the Central Bank of Nigeria (CBN), according to a circular announcing the Exposure Draft of the Regulatory Framework for Agent Banking in Nigeria.
The CBN stated that the agent banking initiative has led to a significant rise in financial transactions being conducted through agents across Nigeria, making it necessary to review agent banking regulations to streamline activities and ensure that stakeholders take appropriate risk mitigation measures.
As per Section 8.3 of the guidelines, which outlines prohibited activities for agents, the agents are not permitted to accept deposits or allow withdrawals beyond a prescribed amount by the bank. Furthermore, agents are not allowed to use the purchase option of PoS terminals for cash-in and cash-out transactions.
Cashless transactions skyrocketed in March
In March 2023, there was a significant surge in e-transactions within the Nigerian payment ecosystem. This rise was a result of the notable increase in failed transactions experienced in February and March of the same year. According to reports, Nigerians made use of Point of Sale (PoS) terminals and other channels, totaling 1.35 trillion transactions in March.
There was also a significant increase in cash transactions, which rose by 31.35% from N37.67 trillion in February to N49.48 trillion in March.
This boost in electronic payments followed a decline of 4.83% in January, as e-payments dropped from N39.58 trillion due to a surge in failed transactions in February.
In other news, the House has passed a historic $2 trillion stimulus package, despite some last-minute objections.
Cashless Transactions in Nigeria Hit Record High in March 2023, with Glitches Reported
New data from the Nigeria Inter-Bank Settlement System (NIBSS) shows a surge in cashless transactions in March 2023, reaching an unprecedented volume of 1.35 billion transactions through electronic channels. This is a staggering 448.54 million times higher than the previous month’s record of 901.46 million transactions in February 2023. The NIBSS report, which includes data from Nigeria Instant Payment System (NIPS) and Point of Sale (PoS) terminals, indicates that instant payments accounted for N48.33 trillion, while PoS transactions recorded about N1.15 trillion in one month.
The report also highlights a significant increase in mobile device usage for financial transactions, which rose by 106.93% month-on-month. This increase facilitated a 61.99% increase in transaction value from N2.56 trillion in February 2023.
However, the CBN’s cashless policy was disrupted by transaction glitches across all channels, according to NIBBS data. Despite this setback, cashless transactions grew by 44.84% to N126.73 trillion in the first quarter of 2023 from N87.49 trillion in the same period in 2022.
In another report, bank customers are said to have spent approximately N92.2 billion using Point of Sales terminals in the first seven months of 2022, according to the NIBSS. This amount was accrued from transactions totaling N4.61 trillion, with fees charged on withdrawals or transactions between N1,000 to N5,000 on PoS.