As Digital Payments Rise, Cheque Transactions Shrink By 20%
The volume of cheques cleared by Nigerian banks keeps shrinking as bank customers continue to embrace electronic payments for their financial transactions. In January this year, the volume of cheques dropped by 20% to 712,191 compared with 885,166 recorded in the industry in January 2018, the latest data from the Nigerian Interbank settlement scheme has shown.
In addition, the value of cash withdrawals with cheques also suffered a decline by 23 per cent from N763.07bn in January 2018 to N591.35bn in the same month this year.
Experts attribute the trend to the growing dominance of Financial Technology and the adoption of innovation in digital payments by traditional banks.
Meanwhile, NIBBS statistics indicated that the use of digital financial transaction platforms continued to rise as the volume of Point of Sales, unstructured supplementary service data, instant transfer and electronic bills payment continue to record double digit growth.
Analyses of NIBSS data indicated that the volume of electronic payment of utility bills, airtime top-up, cable TV, hotels and airlines, among others, grew by 55 per cent to reach 134,656 in January this year from 87,076 in the corresponding month in 2017.
In addition, industry statistics showed that the volume of transactions on PoS rose to 28.16 million from 16.1 million in January 2017, representing a 75 per cent growth.
On the NIBSS Instant Payment platform, 76 per cent growth was recorded as the volume of transactions rose to 72.29 million in January this year from 41.02 million in January 2018.
Financial transactions via mobile inter-scheme also grew by 54 per cent to reach 724,803 as of January 2019, exceeding the January 2018 figures by 254,361.
The Managing Director, Upperlink Limited, Mr Segun Akano, noted that banking operations had gone beyond brick mortar with customers preferring online transactions.
According to him, banks have been able to reduce investment in establishing branches and have started spending more on technology that will facilitate online transactions.
“Banking operations are going beyond the physical structures to online; and to offer efficient services online, they need to invest in software that will make it easy for customers to use,” Akano said.
The Managing Director, Global Accelerex, Mr Kayode Ariyo, recently attributed the increased deployment of PoS to the high level of acceptance of electronic payment in the country.
He said there was a new trend where merchants were now requesting PoS terminals contrary to what was obtained when the terminals were newly introduced and retailers had not discovered its value.
He said, “The major factor that has contributed to that is the acceptance. People are getting more comfortable with the card payment. The adoption of electronic payment is on the increase by consumers.
“Retailers and merchants have come to terms with it. In the past, we had to appeal to merchants to use the PoS channel. But now, we have a trend where merchants are the ones calling and asking for PoS terminals.”
According to him, the payment cards used in Nigeria are better secured than those in other climes due to the absence of a magnetic strip on them.
