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ANALYSIS: POS, Mobile Adoption Drive e-Payment Boom In Q1 2021



e-Payment transactions in Nigeria continue to flourish even as the impact of the COVID-19 pandemic continues to ease across the nation.

The above statement is evident in the latest report made available by the  Nigeria Interbank Settlement System (NIBSS).

According to NIBSS, the value of transactions made via instant payment grew to a record high of N58.8 trillion during the first quarter (Q1) of 2021.

In comparison, the amount is slightly above one-third (1/3) of the total amount recorded for the year 2020 which was pegged at N158.1 trillion.

Also, the amount is approximately 88.4% more than the value recorded for the corresponding quarter – Q1 in 2020 which  is pegged at N31 trillion.

While the value of NIBSS Instant Payment (NIP) grew exponentially, the volume of transactions that took place within the period under review also increased significantly.

A total transactional volume of 734,056 was recorded in the Q1 of 2021, compared to about 366,904 TV recorded in the corresponding quarter, 2020, accounting for slightly above 50% Quarter-on-Quarter growth.

Also, compared to the previous Q4, 2020, there was only a slight QoQ growth put at an approximate 5.7%.

However, the overall boost in both transactions volume and value suggests a rapid growth in the adoption of digital payment solutions.

While the reason for the massive growth in both channels can greatly be attributed to the incessant adoption of e-Payment influenced by the nationwide lockdown as a result of COVID-19 pandemic, there has also been a significant increase in terms of internet population in Nigeria.

For instance, internet subscription in Nigeria stood at 136.06 million by the end of Q1 2020; in comparison, the number of internet subscribers as of March 2021 is pegged at around 150 million.

Although the growth in internet subscription recently slowed down as a result of the ban on new SIM registration, it is expected to go up moving forward considering that the ban has been lifted.

POS and mobile growth remain major drivers of e-transactions in Q1 2021

The growth in electronic transactions during the period under review can be attributed to a lot of factors with Point of Sales (POS) and mobile inter-scheme transactions positioned right at the top.

During the first quarter of the year, the volume and value of e-transactions made via POS channel surged drastically, almost doubling the volume and value that was recorded during the corresponding quarter in 2020.

ALSO READ: NIBSS: Nigeria’s USSD Transactions Grow By 80% During 2020

The total volume of POS transactions in Q1 2021 grew to 223.44 million compared to 139 million recorded during the corresponding quarter in 2020, accounting for about 62.5% QoQ growth.

ANALYSIS: POS, Mobile Adoption, Drives drives e-Payment Boom In Q1 2021 |

Source: NIBSS

Similarly, the value of POS transactions also witnessed a surge, recording the highest quarterly transaction value yet pegged at N1,489 trillion.

In comparison, POS transactions value for the corresponding quarter (Q1, 2020) stood at N1,008 trillion, hence indicating a QoQ growth of approximately 48%.

ANALYSIS: POS, Mobile Adoption, Drives drives e-Payment Boom In Q1 2021 |

Source: NIBSS

If compared to the last quarter of 2020, ending December, the growth difference between the latest quarter isn’t so profound.

The percentage growth QoQ between Q4 2020 and Q1 2021 for POS transactions volume and value stood at about 5% and -1.8% respectively.

Clearly, there was a slight dip in POS transactions value between Q4 2020, and Q1 2021 despite the increase in transaction volume; however, this can be attributed to consumers’ spending power which obviously reduced.

Value of Mobile Inter-scheme transactions increased significantly

While the POS transactions channel had a record surge compared to other channels, especially when comparing corresponding Quarter-on-Quarter growth, Mobile Inter-scheme transactions also witnessed a significant boost.

According to the breakdown provided by NIBSS, the volume of Mobile Inter-scheme transactions increased significantly from 24.415 million in Q1 2020, to 48.635 million in Q1 2021, indicating almost 100% QoQ increase.

ANALYSIS: POS, Mobile Adoption, Drives drives e-Payment Boom In Q1 2021 |

Source: NIBSS

In comparison, the growth difference between the transaction volume recorded in the previous quarter (Q4, 2020) and Q1 2021 is not as pronounced, standing at 44.731 million and 48.635 million respectively, further indicating only about 8.72% growth.

ANALYSIS: POS, Mobile Adoption, Drives drives e-Payment Boom In Q1 2021 |

Source: NIBSS

Similarly, the value of Mobile Inter-scheme transactions increased by more than double of what was recorded for the corresponding quarter in 2020.

ALSO READ: POS Transactions Hits $13 Billion During 2020

A total e-transaction value of N1,279 trillion was recorded during Q1 2021, compared to about 450.36 billion recorded in the corresponding quarter for 2020.

In comparison, the total e-transaction value increased by a whopping 184% between Q1 2020, and Q1 2021.

Also, the latest value outperformed that of the previous quarter ending December 2020 which recorded about N1,153 trillion in its own case, indicating only about 11% QoQ growth in Q1 2021.

The surge in e-transaction reflects the increasing adoption of digital payments

One major take out from this report is the growing adoption of digital payment solutions.

However, it remains unclear whether Nigerians are embracing the the use of digital payment for its unique function or perhaps to aid the use of cash.

Currently, many industry experts believe that the ongoing trend – continuous surge in e-transactions –  will still persist further, even though it was initially fueled by the constraints brought about by COVID-19 pandemic.

It is also expected that with the consistent growth in terms of mobile and internet subscriptions nationwide, more Nigerians will sooner than later adopt the active use of e-transactions.

Oyinloye Bosun is a writer at Techuncode. Although not a gadget freak, he has a keen interest in familiarizing himself with every technology product - software or hardware. He also loves to arm himself with the knowledge of tech activities/events taking place both on the Local and International scenes. The provision of the above has pushed him to choose writing as a profession. Wondering if he has a hubby? Yes! He loves streaming tech-related podcasts in his spare time.