…as e-payment gains traction
Value of cheque transactions across the country stood at N1.9 trillion in the last five months, New Telegraph has learnt.
This, however, showed a decline in the paper-based deals compared to the same period last year when N2.2 trillion was recorded.
According to data released by Nigeria Inter-bank Settlement System (NIBSS), the value was derived from a total of 3.3 million separate deals between January and May, which again was a decline from the volume recorded in the same period of last year at 4 million.
On annual basis, value of cheque transactions has been on 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 increase in volume and value of transactions on monthly basis.
From the NIBSS statistics, value of PoS transactions alone hit N1.1 trillion between January and May. This showed 26 per cent increase when compared to N836.5 billion recorded in same period last year.
Nigerians are also doing more in terms of bills payment through electronic channels. Value of E-Bills Payment in the five months stood at N238.8 billion, which is 10.2 per cent higher than N214.4 billion recorded in the same period last year.
Analysis of cheque statistics from January to May this year revealed that the paper transaction, which has been declining over the years, plunged further each month. In January, the value of cheque transaction was N403 billion, a 3.7 per cent decline from N418 billion recorded in December 2018. In February, it dropped further to N372 billion, a 7.6 per cent drop from previous month. It, however, rose to N377 billion in March, but still 14 per cent lower than N440.7 billion recorded in same month of previous year.
In April, transactions valued at N379.8 billion were recorded, a 12.6 per cent decline from N435 billion achieved in same period last year. By May, the cheque value stood at N401.7 billion, which is 10 per cent lower than N446.4 billion recorded same period 2018.
NIBSS-Interbank Payments (NIP), an account-number based online-real-time Inter-Bank payment solution, developed in 2011 by NIBSS, is becoming Nigeria’s financial industry’s preferred funds transfer platform.
Nigerian banks have also made the service available to customers through various channels like internet banking, bank branch, Kiosks, mobile apps, Unstructured Supplementary Service Data (USSD), Point of Sales (POS) and Automated Teller Machine (ATM).
In a recent review of the payment system in the country, NIBSS noted that the decline in cheque transactions has become a global phenomenon. “Globally, as the market share of cheques decline in the wake of increased adoption of contactless and real-time payments, a duopoly may likely develop in the non-cash market with cards and credit transfer (instant payments) dominating across most geographies.
“For instance, in the Asian-Pacific (APAC), China, South Korea and Australia recorded a 20 per cent drop in cheque usage although India recorded a 10.1 per cent increase in usage due majorly to her government’s demonetization policy,” it said.
NIBSS added that in the U.S., cheque usage remains a government-backed phenomenon as it contributed a whopping 73.5 per cent of global cheque volume. “In Nigeria, cheque transactions have continued on a downward spiral from its peak volume of 15.3 million in 2014 to 9 million in 2018. This is a -10% CAGR over the five-year period; with a growth rate of -17 per cent when compared to 2017. Although, the volume of cheque transaction is decreasing, it is fair to say that its use is still relevant, especially amongst larger value transactions, Bill Payments, and Payroll transactions,” NIBSS said in the review.
Since the introduction of the cashless policy by the Central Bank of Nigeria (CBN) in 2011, electronic payment has continued to gain traction in the country, thus reducing the usage of cheque.
According to analysts, the huge growth in e-payment is due to a combination of factors such as increased adoption by SMEs, chain business owners etc.; increased awareness as well by cardholders, who ask for the PoS from business owners when making payments; and improved dispute resolution process for failed transactions.
Sports2 years ago
Highest goal scorers in world football history
News1 year ago
A mysterious discovery at Onitsha mansion
Perspectives1 year ago
Looters’ list: ‘You be thief, I no be thief…’
Sunday Extra10 months ago
Lagos residents lose sleep as ‘One Million Boys’ returns
Metro and Crime1 year ago
‘Cult day’ celebration, Kwara police reacts
News11 months ago
Lawal Daura: Discovery of N21 billion, guns, PVCs, has exposed Buhari’s hypocrisy – PDP
Show Biz11 months ago
Nomoreloss’ death sparked something that led me to Christ –Weird MC
Body & Soul1 year ago
Biggest actresses of the 90s who hardly appear in recent movies