The value of electronic transactions in Nigeria surged by 79% in 2024 compared to the previous year, reaching a record-breaking N1.08 quadrillion, according to the latest data from the Nigeria Inter-Bank Settlement System (NIBSS) on NIBSS Instant Payments (NIP).

NIBSS Instant Payments is an account-number-based, real-time interbank payment solution developed in 2011 by NIBSS. It ensures instant value for beneficiaries, making it a cornerstone of Nigeria’s digital payment ecosystem.

Steady Growth in 2024

An analysis of the data shows consistent growth in electronic transactions throughout 2024. In January, the value stood at N72.11 trillion, the lowest monthly figure of the year. By the last quarter, transactions peaked, reaching N103.21 trillion in October, N109.53 trillion in November, and N115.12 trillion in December.

Notably, even January’s transaction value surpassed any month from the previous year, highlighting the increasing adoption of digital payment methods.

On the volume side, electronic transactions rose by 13.69%, increasing from 11.69 billion in 2023 to 13.92 billion in 2024. The highest volume was recorded in May, with 1.02 billion transactions, while June had the lowest at 871.66 million.

CBN’s Cashless Policy and Financial Inclusion

Effective January 9, 2023, the Central Bank of Nigeria (CBN) revised its cash withdrawal policy, imposing stricter limits across all payment channels. The policy aims to reduce the circulation of physical cash, encourage digital transactions, and enhance financial inclusion.

According to the CBN, the cashless policy is designed to:

• Reduce banking service costs, including credit costs.
• Expand financial inclusion by offering efficient transaction options.
• Strengthen monetary policy for inflation control and economic growth.
• Enhance consumer convenience with more digital payment options.
• Mitigate cash-related crimes such as banditry, ransom-taking, and terrorism financing.
• Improve access to banking services and credit opportunities.

The 2023 EFInA Access to Finance Survey indicated an increase in financial inclusion, with 74% of Nigerians now within the formal banking system, up from 68% in 2020. However, 26% of Nigerians remain financially excluded.

Industry Experts Weigh In

The National President of the Association of Mobile Money and Bank Agents in Nigeria, Sarafadeen Fasasi, highlighted the role of banking agents in driving digital adoption.

He told The PUNCH, “Financial inclusion is meant to bring the unbanked into the banking space and make people transact digitally without cash. Over the years, the number of agents has increased, reaching remote areas and helping the unbanked embrace digital transactions.”

He further explained how petty traders now rely on agents for digital payments instead of physically transporting cash. “They meet with an agent, provide the wholesaler’s account number, and receive instant payment confirmation,” he said.

An economist and sustainability expert, Marcel Okeke, described the surge in electronic transactions as a positive development for Nigeria’s cashless economy.

“That is a good thing. It indicates progress with the cashless policy. However, the rapid increase might also be due to the failed naira redesign initiative, which forced people to explore digital transactions. Regardless, this is a positive trend, as carrying cash has significant risks,” Okeke noted.

However, he warned about cyber threats, emphasizing the need for strong cybersecurity measures. “No human system is error-proof. Authorities must enhance cybersecurity to prevent fraud and transaction failures.”

Economic and financial analyst Rotimi Fakayejo also praised Nigeria’s digital payment system.

“Nigeria has one of the most effective e-payment systems globally. Even in the US, digital payments are not as widely accepted or frequent. The scarcity of naira in 2023 made people trust electronic payments more, reducing risks associated with cash transactions,” he stated.

With electronic transactions reaching unprecedented levels in Nigeria, the country is making significant strides toward a fully digital economy. The steady growth reflects increasing consumer confidence in digital payments, improved financial inclusion, and the success of CBN’s cashless policy. However, as the digital landscape expands, ensuring robust cybersecurity remains crucial for sustaining this progress.