Business

POS transactions grow by 13.3% to N531.38bn

Point-of-sale (PoS) transactions in the country rose by 13.3 per cent to N531.38 billion in March 2021 from N468.91 billion in the previous month, latest figures from the Nigeria Interbank Settlement System (NIBSS) showed. New Telegraph’s analysis of the NIBSS’ data also shows that the volume of PoS transactions in March stood at 80.95 million compared with 71.62 million in the previous month. The rebound in transactions last month followed the blip in transactions in February, when the value of transactions across the country, dropped by N20.3 billion to N468.9 billion in February 2021 from N489.24 billion in the previous month. Indeed, a review of figures from NIBSS reveals that the value of PoS transactions has maintained an upward trend in the last three years.

For instance, the value of transactions at the end of March this year (N531.38 billion) was N162.53 billion higher than N368.86 billion recorded for the same period in 2020. Also, the value of transactions in February 2021(N468.91 billion) was N142.88billion above the N326.03 billion recorded in the same period of last year. Similarly, the value of transactions at the end of January 2019 and January 2018, stood at N222.92 billion and N152.099 billion respectively compared with January 2020’s N313.43 billion and January 2021’s N489.24 billion. Further analysis of the NIBSS’ data shows that the value of transactions through POS Terminals increased from N2.32 trillion in 2018 to N3.20 trillion and N4.7 trillion in 2019 and 2020 respectively.

New Telegraph gathered that the steady growth in the value and volume of transactions is a result of more Nigerians embracing digital platforms, a development, that has encouraged many lenders to step up investments in channels such as PoS terminals in the last few years. As analysts at CSL Research put it while commenting on the growth of PoS transactions in a report last year, “we note that the aggressive expansion embarked upon by key players including banks and fintech players has contributed to the growth in digital payments. Banks and regulators likewise have increased awareness of these alternate digital payments platforms particularly in rural areas as part of the financial inclusion drive. PoS terminals availability has continued to improve with PoS terminals deployed growing 37.3 per cent y/y to 306,409 terminals.”

However, another factor that has boosted usage of PoS terminals in the country is that in its bid to boost financial inclusion by increasing Nigerians’ access to financial services, the Central Bank of Nigeria (CBN), in 2013, introduced the agent banking system, under which, financial institutions and mobile money operators could appoint third parties as agents, equipped with POS terminals, to provide financial services on their behalf to members of the public. Commonly called PoS operators in these parts, the banking agents have seen their business grow rapidly, especially since COVID-19 spread to Nigeria in February last year.

With the scourge forcing lenders to adopt Nigeria Centre for Disease Control (NCDC)-ordered COVID-19 protocols such as social distancing and avoiding crowded environments, many banks saw an opportunity to boost their agent banking business. For instance, there were reports last year that three first tier lenders – First Bank of Nigeria Ltd, Zenith Bank and Access Bank – placed orders for a total of 100,000 PoS terminals for their agent banking business. First Bank, which leads the industry in terms of number of PoS terminals, reportedly ordered another 40,000 terminals, Zenith Bank ordered 50,000 and Access Bank ordered 10,000.

In fact, before the onset of COVID-19 crisis, CBN, in collaboration with banks and licensed mobile money operators, had in March 2018, unveiled an initiative known as the Shared Agent Network Expansion Facilities (SANEF). Under the initiative, the financial institutions planned an aggressive roll out of 500,000 agent network to offer basic financial services, such as cash-in, cash-out, funds transfer, bill payments, airtime purchase and government disbursements to an estimated 50 million Nigerians.

Speaking at the event at the time, the Chairman, Body of Banks’ Chief Executive Officers and Managing Director/ Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe, said: “This agreement reflects our commitment to aggressively pursue CBN’s 2020 financial inclusion target in an integrated way with minimal systemic risk to the financial system. This initiative will also generate 500,000 new jobs over the next two years.” According to the latest NIBSS’ data, the total number of POS terminals deployed in the country as at the end of March 2021 stood at 510,773 compared with 459,285 as at the end of December last year. The figures also show that a total number of 783,136 POS terminals were registered in the country as at the end of March this year as against 690,070 at the end of December 2020.

 

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