April saw a slowdown in POS and mobile payment
April saw a slowdown in POS and mobile payment, as e-transactions fell for the first time in 2021
E-payments have grown at a breakneck pace this year, with tractions reaching a record N58.8tn in Q1 alone. However, it appears as though the sector's growth has slowed due to a number of challenges.
According to the Nigerian Interbank Settlement System (NIBSS), the volume of NIBSS Instant Payments (NIP) transactions in April decreased to 265 million via channels such as point of sale (POS), USSD, Internet banking, and mobile apps.
This is a 3.6 percent decrease from March's 275 million transactions, but a whopping 147 percent increase from the 107 million transactions in April last year during the pandemic.
Similarly to the volume of NIP transactions, the value of NIP transactions decreased during the month. The 265 million NIP transactions that were recorded were valued at approximately N20.68 trillion.
This represents a 6.05 percent decrease from March's N22.02 trillion but an impressive 195 percent increase from April 2020's N7.01 trillion in transactions.
The massive increase in volume and value from April 2020 figures demonstrates just how much online commerce has recovered over the last year.
The decline between March and April, however, indicates that adoption is slowing. The following is a breakdown of several possible explanations.
ATM Cards Disruption
The decline in online transactions was widespread. The point-of-sale sector experienced one of the steepest declines, with the volume of POS transactions falling 4.1 percent to 77.6 million. Also, the value of transactions decreased by 4.42 percent to 507.8 billion last month.
The decline could have been triggered by several disruptions to some banks' ATM cards. During the month of April, Zenith and Kuda bank customers reported having difficulty using their ATM cards for ATM services such as POS.
Reduced purchasing power
As was the case with POS, the volume of transactions via the Mobile channel decreased during the month. There were 18.36 million transactions completed, approximately 13,000 fewer than the 18.3 million completed the previous month.
While the volume of mobile transactions decreased, the value of transactions increased slightly during the period. Transactions totaled N502 billion, up 4.5 percent from March's N480 million.
The increased value and decreased volume indicate an increase in the average amount of money sent per transaction. This can be translated as a decrease in the number of people with sufficient spending power to conduct transactions.
This is unsurprising given the continuous devaluation of the Naira and the country's current economic situation, which has eroded Nigerians' overall purchasing power.
Ban on SIM cards for four months
The continued expansion of digital banking and online transactions is contingent upon the country's internet population growing.
The approximately four-month-long ban on SIM card sales slowed the country's internet adoption growth.
Although the ban has been lifted, the cumulative effect of the lengthy ban on subscriber growth may have indirectly resulted in a significant April drop.
In conclusion, despite the decline in April, the overall trend of growth over the last few years indicates that adoption should rebound in May.
Similarly, many industry experts believe that e-payment adoption will continue to grow, despite the fact that it was initially fueled by COVID-19 Lockdown constraints.
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