Long way to the cashless society

Data from an e-payment channels report in a series from the NBS, produced in collaboration with the CBN, reveal that 457 million transactions valued at N32trn were recorded on the channels in Q1 2018. ATM transactions dominated with a volume of 212 million. Electronic transactions are directly linked to internet subscriptions, which stood at 101 million as at end-Q1 according to the Nigerian Communications Commission (the regulator). This translates into a penetration rate of 55%.


  • Point-of-sale (PoS) transactions assist with checking the impact of the cashless policy on the economy. The NBS data show that 54 million PoS transactions were recorded in Q1 2018, representing increases of 13% q/q and 101% y/y. The recorded growth is commendable, but such transactions accounted for only 12% of total electronic payments during the quarter under review.
  • Mobile payments recorded 15 million transactions valued at N329bn (US$1.07bn) in Q1. The value of transactions grew by just 21% y/y and accounted for only 3.3% of total electronic transactions.
  • Meanwhile, there was increased patronage of m-cash (a mobile payments solution designed specifically for merchants). Transactions rose sharply by 225% q/q and over 1,000% on a y/y basis. We stress that this payment system accounts for less than 1% of electronic payments. Perhaps the authorities could explore incentives that would encourage increased m-cash usage by traders, especially in the rural economy.

Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research
  • Based on official data, the financial exclusion rate for Nigeria is 42%. Therefore, only about 100 million Nigerians are within the inclusion net. However, if we consider only those individuals within the formal banking system, this figure slips significantly.
  • One solution would be to create a tailored version of Kenya’s M-Pesa. service. However, this would require better synergy between telecommunications operators and banks.

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