The value of transactions through point-of-sale (PoS) terminals in the country soared to N$18.10 trillion between 2017 and 2021, according to the latest data released by the Nigeria Interbank Settlement System Plc (NIBSS).
The New Telegraph’s analysis of NIBSS data shows that transactions have maintained an upward trend over the past five years, growing 356.27 percent from N1.41 trillion in 2017 to N6.43 trillion in 2021.
The breakdown of the data shows that the value of transactions via PoS terminals, which was N1.41 trillion in 2017, increased by 64.76 percent in 2018 to N2.32 trillion.
In 2019, the total value of PoS transactions increased by 37.97 percent to N3.21 trillion, while in 2020 it increased by 47.50 percent to N4.73 trillion.
Last year, the value of PoS transactions increased by 36.01 percent to reach N6.43 trillion. This means that between 2017 and 2021, POS transactions reached N18.10 trillion.
In a recent report, the Financial Derivatives Company Limited (FDC), which had predicted a total value of N$6.29 trillion for PoS transactions in 2021, predicted that the number would likely rise to N$7.83 trillion this year will.
Analysts attribute the rise in PoS transactions to the increased adoption of electronic payment (e-payment) channels such as PoS terminals, NIBSS Instant Payments (NIPs), Mobile Interscheme and NIBSS Electronic Transfer (NEFT), particularly in recent years.
In fact, NIBSS stated in its “Instant Payments – 2020 Annual Statistics”: “Covid-19 has transformed the landscape of e-payments and accelerated the adoption of instant payments as more and more people switched to e-channels in the wake of government-imposed measures for currency exchange have switched locks.”
The New Telegraph recently reported that as more and more Nigerians adopted e-payment, the number of POS terminals deployed in the country has skyrocketed.
For example, data from NIBSS shows that the total number of deployed POS terminals in the industry increased from 155,462 at the end of December 2017 to 217,283 and 303,162 at the end of December 2018 and December 2019, respectively.
It also shows that the total number of POS terminals deployed in the industry increased by 99.33 percent to 915,519 in December last year, up from 459,285 in December 2020.
Analysts also point out that the Central Bank of Nigeria’s (CBN) efforts to promote financial inclusion led it to introduce the Agent Banking system in 2013, which allowed financial institutions and mobile money operators to appoint third parties as agents who equipped with PoS terminals to provide financial services on their behalf to members of the public has helped increase the use of the terminals.
The bank agents, known in this country as PoS operators, have experienced a boom in their business, especially since the spread of Covid-19 in Nigeria in February 2020. To capitalize on the increasing adoption of e-payment channels, Tier 1 lenders such as First Bank of Nigeria Ltd, Zenith Bank and Access Bank have reportedly ordered a total of 100,000 PoS terminals for their agent banking businesses.
Additionally, analysts attribute the rapid deployment of PoS terminals to the Shared Agent Network Expansion Facilities (SANEF) initiative unveiled by CBN in March 2018 in partnership with Deposit Money Banks (DMBs) and licensed mobile operators.
As part of the initiative, the financial institutions planned to aggressively build out a network of 500,000 agents that would use PoS terminals to offer basic financial services, such as remote registration on BMS Infrastructure (BVN) to an estimated 50 million Nigerians.
Herbert Wigwe, Chairman, Body of Banks’ Chief Executive Officers and Managing Director/Chief Executive Officer, Access Bank Plc, said at the event: “This agreement reflects our commitment to aggressively pursue the goal of CBN 2020 Financial Inclusion in an integrated manner with minimal systemic risk to the financial system. This initiative will also create 500,000 new jobs over the next two years.”
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