Finance

Customers transfer N8.6tr via mobile platform

Customers transfer N8.6tr via mobile platform

The cashless drive of the Central Bank of Nigeria (CBN) appears to be yielding dividends as electronic or e-payment has continued to gain traction in the country as more and more Nigerians have embraced financial transactions via their mobile devices.

Last year, bank customers transferred a total of N8.06 trillion over mobile devices, representing a-164 per cent growth over N3.05 trillion recorded the year before.

During the same period, commercial banks processed a total of cheques valued at N3.2 trillion. According to Nigeria Inter-bank Settlement System (NIBSS) data, this represents a marginal decline of three per cent compared with N3.3 trillion recorded in the year before (2020).

The N3.05 trillion recorded in 2020 came as the all-time high annual figure. However, with the 2021 record, the stake has been raised higher as more Nigerians are leveraging the mobile as platform of choice for their financial transactions.

According to the NIBSS data, the volume of mobile inter-scheme transactions also rose by 113 per cent from 13.3 million recorded in 2020 to 28.4 million in 2021.

The data also showed that bank customers withdrew a total of N1.4 trillion via Automated Teller Machines (ATMs) last year compared to N656 billion recorded in 2020. This showed that there was a 113 per cent increase in cash withdrawal from ATMs last year.

However, with the rapid spread of agent banking across the country, more bank customers are patronising Point of Sales (PoS) agents for cash withdrawal than ATMs. This has led to steady growth in PoS transactions over the years.

The data showed that the financial system lost a total of N5.2 billion to fraudsters in nine months, adding that the fraudsters initiated attacks 46,126 times and were successful on 41,979 occasions, representing 91 per cent.

Analysis of the value of the transactions for the year showed that N390.5 billion was transferred via mobile in January this year. In February, transactions valued at N407.8 billion were done over the mobile, while in March N480.9 billion was recorded as mobile transfers.

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April recorded a total of N502.7 billion transfer by customers across the country while the figure rose to N526.9 billion in May. The data showed that a total of N603 billion was transferred via mobile in June.

In July, mobile transactions valued at N665 billion were recorded, while the monthly figure of transfers rose to N719 billion in August. The transfer value for September stood at N771 billion, while N840 billion was recorded in October.

In November, the figure rose to N957 billion, while the highest monthly deals were recorded in December at N1.2 trillion

Similarly, the NIBSS data revealed that the value of bills paid through e-channels rose to N2.3 trillion in 2021. Compared with N1.5 trillion recorded in 2020, this represents a 53 per cent increase.

The volume of e-bills also jumped from 132.9 million in 2020 to 284.5 million in 2021.

E-Bills Pay is an account-based, online real-time product that facilitates the payment of bills from an account. It ensures instant credit of payments and receipt of collections on behalf of 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 NIBSS data, more Nigerians are now embracing payment of bills electronically as opposed to paying with cash.

While cheque transactions have been declining consistently over the last four years, industry analysts said the decrease recorded in 2021 was marginal as a result of the one-month suspension of the paper transaction in the preceding year and the COVID-19 lockdown imposed during the same period.

In terms of the volume of cheques issued last year, there was also a decline compared with the year before. The NIBSS data showed that a total of 4.4 million cheques were issued last year compared with 4.9 million recorded in the preceding year. This represents a 10.2 per cent decline.

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A breakdown of the cheque transaction data showed that cheques valued at N248 billion were processed in January. In February, the figure rose to N277 billion, while it also rose to N377 billion in March. In April, the value stood at N243 billion, while N246 billion was recorded in May.

The data revealed that cheques valued at N263 billion were processed across the country in June. In July, the value of cheque transactions across the country stood at N248 billion, while N265 billion was recorded in August.

In September, cheques valued at N269 billion were cleared by the banks, while N257 billion was processed in October. November’s value stood at N281 billion, while the highest monthly value for the year was recorded in December at N300 billion.

On an annual basis, the value of cheque transactions has been on a steady decline to hit an all-time low of N5 trillion in 2018, from an all-time high of N17.8 trillion recorded in 2009. The decline is attributed to the growing preference for electronic payment channels, which are considered faster than cheque.

On the other hand, electronic platforms such as Point of Sales (PoS), Mobile Transfer, NIBSS Instant payment, E-Bills Payment, among others continue to record an increase in volume and value of transactions on a monthly basis.

Last year, transactions over the PoS channel rose to N6.4 trillion. Compared with N4.7 trillion recorded in 2020, the channel recorded 36 per cent growth in 2021.

The monthly breakdown shows that transactions valued at N489.2 billion were carried out over the PoS terminals across the country in January. In February, the value of PoS deals stood at N468.9 billion, while the figure rose to N531.4 billion in March.

In April, the value of PoS deals stood at N507 billion, while N503 billion was recorded in May. The PoS channel recorded transactions valued at N503 billion in June. NIBSS’ data for July, August, and September shows that N554 billion, N504 billion, and N556 billion deals were recorded in that order.

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The value of PoS deals in October stood at N552 billion, while it increased to N560 billion in November. In December, the value of transactions rose to N699.7 billion.

The volume of PoS transactions for the year also increased from 655 million in 2020 to 982 million in 2021. This represents a 50 per cent growth year-on-year.

Meanwhile, as more Nigerians embrace electronic payment, fraudsters have also upped their game in their attacks leading to a 186 per cent increase in financial frauds from 16,128 in 2019 to 46,126 in 2020. According to the fraud report recently released by NIBSS, the criminals are focusing more on the mobile payment system, hence, fraud attempts on mobile increased by 330 per cent between January and September 2020.

The shift in attention to mobile may not be unconnected to the fact that many bank customers now rely on their mobile for financial transactions. This was also evident from the NIBSS report on mobile transactions, which showed that bank customers transferred a total of N3.05 trillion through mobile in 2020. This came as an all-time, representing a whopping 268 per cent increase over N828 billion mobile deals recorded in 2019.

Aside from the mobile, NIBSS in the Q3 2020 fraud report disclosed that the fraudsters are also targeting web payment and PoS, both of which recorded a 173 per cent and 215 per cent increase in fraud attempts in the nine-month.

NIBSS said: “The growing trend of financial fraud would continue as Nigeria further grows financial inclusion and customers become increasingly dependent on electronic channels for their day-to-day transactions. It, therefore, urged financial institutions to be poised to promptly detect and block any of such fraudulent activity from negatively impacting the customer’s perception of their platforms and products while also ensuring that customers are informed and perceptive enough to identify and reject any such offers.”

Thenation

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