Cash Crunch: E-bills Payment Falls by 44% Amidst Cashless Policy – NIBSS

The Nigeria Inter-Bank Settlement System recent report has indicated a fall in the value of electronic utility payments by 44.86 per cent in February despite the Central Bank of Nigeria’s naira redesign policy aimed at growing cashless transactions.

In February, the value of utility bills payment fell to N90.93bn from N164.89bn in January. This signified a two-year low for ebill payment.

Since hitting N78.38bn in February 2020, e-bills pay has consistently stayed above N100bn, rising to N161.87bn in February 2021 and N218.80bn in February 2022.

NIBSS describes e-bills as daily bill transactions that are accessible and seamless. It involves the payment of bills, fees, levies, premiums, and subscriptions through payment channels as e-bills.

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According to NIBSS, the payments are done in banking halls through Internet banking, mobile banking, USSD, and agent networks.

Many expected e-bills payment to grow when the CBN announced its naira redesign policy and withdrawal limits, in 2022, and said, “Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”

However according to the National President, Association of Mobile Money and Bank Agents in Nigeria, Victor Olojo, the policy depressed the economy and led many Point of Sales terminal operators to shut down their businesses.

He said, “We can tie this fall (in e-bills payments) to the policies of the CBN which has depressed the economy and affected all businesses.

“The policies depressed the economy and affected business activities. Many businesses were not able to run optimally. Many things were affected, and the rippling effect was well felt too. This is coupled with the fact that technology has also been affected, many of the banking apps are not working properly, which can be tied to the activity of the past few weeks.

“Also, PoS agents which are crucial to e-Bills did not open their stalls too, which impacted e-bills. Many of the agents who could have helped, did not open and were out of business, which led to this reduction.”

Olojo further explained that the since the purchasing power of many Nigerians dropped because of the policy, they couldn’t afford to pay some of their bills.

He added, “The reality is that ebills pay are disposable expenses. Nigerians will do it when they have excess cash with them. Bills pay, airtime, PayTV, all of these are done when people have extra income.”

A recent report by the Centre for the Promotion of Private Enterprise disclosed that the country’s economy has lost about N20tn since the CBN began mopping up cash from the economy.

The Director, CPPE, Dr. Muda Yusuf, said, “Millions of citizens have slipped into penury and destitution as a result of the disruptions and tribulations perpetrated by the currency redesign policy, especially the mopping up of over 70 per cent of cash in the economy.”

Experts said the naira redesign policy was meant to encourage the adoption of the electronic bills channel, but noted that the policy hammered economic activities and impacted purchasing power of Nigerians.