Despite the economic recession looming the country, the value of transactions through point of sales, PoS payments increased significantly by 65 per cent to N651.37 billion in 11 months.
The figure which represents transactions from January to November 2016, almost doubles the N395.05 billion recorded in the corresponding period of 2015, data gathered from the Nigeria Interbank Settlement System Plc (NIBSS) revealed.
NIBSS data showed that with N81.15 billion, November 2016 recorded the highest value of transactions. In November 2015, a total of N40.25 billion transactions were recorded.
A breakdown of the value of PoS transactions in 2016 showed that in January, activities by individuals and corporates through this form of electronic payment system was N46.65 billion, whereas January 2015 was N31.8 billion.
All the months recorded significant increases over 2015.
In February 2016, the value of transactions was N46.14 billion (N30.97 billion 2015); March 2016 was N51.96 billion (N33.54 billion 2015); April 2016 N53.28 billion (N34.63 billion in 2015). In May 2016, the value was N55.29 billion (N35.93 billion). The N55.29 billion recorded in June 2016 was also much higher than the N34.01 billion recorded in 2015.
NIBSS data also showed an upward swing to N59.4 billion, in July. It was N35.84 billion in July 2015. Transctions in August last year totalled N64.11 billion, as against the N35.84 billion in August 2015; N66.44 billion as at September 2016, compared with the N39.61 billion recorded in the comparable month in 2015; and N71.81 billion in October 2016, up from the N41.25 billion it was as at October 2015.
The Central Bank of Nigeria (CBN) had introduced the cash-less policy with a view to significantly reduce the volume of cash-based transactions, and PoS was one of the tools to achieve this objective.
The policy was introduced for a number of key reasons, including to drive development and modernisation of the payment system in line with Nigeria’s vision 2020 goal of being amongst the top 20 economies by the year 2020.
This is because an efficient and modern payment system is positively correlated with economic development, and is a key enabler for economic growth. The policy was also expected to reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach; improve the effectiveness of monetary policy in managing inflation and driving economic growth, as well as to curb some of the negative consequences associated with the high usage of physical cash in the economy.
As part of efforts to encourage Nigerians to widely make use of electronic payment systems, the Central Bank of Nigeria (CBN) had introduced an awareness campaign for electronic payment users. The scheme known as “Electronic Payment Incentive Scheme (EPIS)” was carried out by the CBN and the NIBSS. The scheme’s primary focus was to reward users of electronic payments platforms in Nigeria and to further encourage greater usage of PoS and other e-payment channels.
The scheme also permitted merchants to provide cash back services to cardholders following a purchase. This served as an incentive for merchants to earn a fee for providing a value-added service cash-out services to customers following a purchase of goods/services from their stores.