Mobile banking, PoS transactions drive digital payment




Point of Sale (PoS) machines deployment has increased in recent months to serve new entrants into the digital banking space. Many cardholders, especially at the grassroots, previously cautious about digital banking and safety of their funds, have embraced the scheme as reduced cash demand and usage. Also, more bank customers have embraced the use of phones for financial transactions with N3.05 trillion transferred through the platform in the last one year. But there are challenges. COLLINS NWEZE writes that these two channels are taking the lead in digital .

Digital banking is the new route that financial service providers and regulators are travelling to offer seamless services to the banked, and encourage the unbanked and underbanked to join the financial services net.

Two channels have for long dominated the digital banking space – banking and Point of Sale (PoS) services.

In the banking space, the e-Bills Pay was a major contributor to the N3.05 trillion achieved in the last one year. An account-based, online real-time product that facilitates the of bills from an account, it ensures instant credit of payments and receipt of collections for billers/merchant recruited on the platform.

Currently, the platform is used for payments such as utility bills, cable TV subscriptions, hotel and airline bookings, school fees, and airtime top-up. According to the Nigeria Interbank Settlement System (NIBSS) data, more Nigerians are embracing of bills electronically as opposed to paying with cash.

Last year, the value of Point of Sales (PoS) deals hit an all-time high of N4.7 trillion.

This shows a 46 per cent increase of over the N3.2 trillion value recorded the previous year. A breakdown of the monthly value of PoS transactions shows that in January, last year, N313.43 billion worth of transactions were carried out over the PoS, an amount that is 41 per cent higher than the N222.92 billion recorded in January 2019.

In February, last year, the value grew by 69 per cent from N193.43 billion in 2019 to N326.03 billion. Last March, N368.86 billion worth of transactions were conducted, an amount which is 70 per cent higher than the N217.46 billion recorded in the same month of 2019.

By April, last year, the value of transactions declined slightly to N272 billion. This was, however, higher than the N246 billion recorded in April 2019 by 11 per cent. In May, transactions valued at N358 billion were recorded, a 39 per cent growth over the N257.7 billion recorded in the same period of 2019. The value of PoS transactions in June stood at N364.7 billion, which was 48 per cent higher than the N245.9 billion recorded in June 2019.

Last July, the value jumped to N416.7 billion, a 49 per cent growth over N279.5 billion recorded in the same period of the preceding year.

August transactions value stood at N386.4 billion, which was 31 per cent higher than N294 billion recorded in August 2019. In September, transaction value rose to N404.9 billion, an increase of 42.8 per cent over N283.4 billion recorded in the previous year. By October, the figure rose to N460.9 billion, a 60 per cent growth over N287.8 billion recorded in the same month of 2019.

The is because the reality demands that real-time payments and banking capabilities should be available when and where they are needed by customers.

Besides, there has been rise in PoS, Automated Teller Machine (ATM), mobile and internet banking activation and usage across various segments of the , including among the unbanked at the base of the society, but there are still challenges facing the sector.

The NIBSS data showed there are about 307,000 Pos machines in Nigeria, 30,000 ATMs, and over 6,000 bank branches. However, the majority of the PoS machines, which are fast being accepted by cardholders are not active. Only 167,000 of the PoS are active and the majority malfunction at the point of trial. Many merchants have continued to collect legal fees from cardholders who want to use their cards on PoS.

Also, the value of e-payment transactions rose year-on-year (YoY) by N9.7 trillion or 80 percent to N21.9 trillion in 2020 from N12.2 trillion in 2019.

Similarly, the volume of e-payment transactions rose YoY by 178.2 million or 98 percent to 359.58 million in 2020 from 181.4 million in 2019.

The NIBSS e-payment data shows that the highest volume of transactions of 264 million was recorded in NIBSS Instant Payment (NIP) channel last year.

These e-channels include cheque truncations, ACH/NIBSS Automated Payment Services (NAPS)/PMS, ATM, PoS, Internet (Web), Mobile Money, NIBSS Instant Transfer (NIP), m-Cash, E-Bills Pay, Central Pay, and Inter-Bank transactions.

The volume of cheque transactions, however, rose by 29 percent to 652,412 in 2020 from 504,728 in 2019 while its value fell by 10 percent to N325 billion last year from N391.6 billion in 2019.

Many customers have shared their frustrations with the platforms. Stevens Odutola, an Abuja-based entrepreneur, said he stopped using PoS after the merchants asked him to pay N300 for its services.

“I have decided to either make transfers or pay with cash for goods and services because of charges that come with using PoS. I was told by one merchant to add N300 to the cost of goods I bought to cover bank charges. It was not a good experience for me,” he said.

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