e-Payment fraud and inflation saw value of PoS transactions in Nigeria drop by N49.8bn in August
e-Payment fraud and inflation saw value of PoS transactions in Nigeria drop by N49.8bn in August
Transactions at point of sale (PoS) in the country experienced a significant decline in August. It was 75.6 million in total, according to data from the Nigeria Interbank Settlement System (NIBSS), the volume of Point of Sale transactions carried out during the month. There were 81.6 million transactions in July, representing a 7.4 percent decrease from the previous month.
Despite a 3.9 percent increase in the number of registered PoS terminals, this is reportedly the lowest PoS volume in six months. In a similar vein, the total value of transactions for the month fell by an impressive 9 percent (N49.8 billion) to N504.9 billion, compared to the N554.7 billion recorded in July.
This decline, according to analysts, can be attributed to the harsh economic reality that many Nigerians are experiencing in the face of rising inflation rates. Despite the fact that annual inflation in the country has declined from a four-year high of 18.17 percent in March to its current level of 17.38 percent, consumer prices have continued to rise.
The result of this inflation has been a significant reduction in the purchasing power of Nigerians, who are struggling to reduce their spending in order to cope with the harsh economic realities of the country. As a result, POS users are paying less frequently and in smaller amounts.
Another factor is the increasing prevalence of point-of-sale fraud. Olojo Victor, President of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), told Vanguard that perpetrators of the crime are pressuring customers to discontinue the use of point-of-sale (PoS) systems.
“Another factor contributing to the decline in point-of-sale transactions is PoS fraud. There have been a number of publications on the subject of point-of-sale fraud in the agent banking industry. People have stopped using point-of-sale systems for transactions as a result of this, according to him.
In August, there is a general decline in e-payments
A decrease in overall e-payment activity in Nigeria was observed in the month of August. The volume of e-payment transactions decreased from N402.3 million in July to 397.9 million in August, representing a decrease of 1.09 percent from the previous month. Also suffering a massive N190 billion loss, the value of e-payment transactions plummeted to N23.97 trillion in August 2021 from N24.16 trillion in July, a N190 billion decline.
Additionally, the value of NIBSS Instant Payment (NIP) decreased by 1.2 percent from N22.4 trillion in July to N22.13 trillion in August, a slight 1.2 percent decline. Transactions in the National Identification Program (NIP) decreased by 0.1 percent to 293.98 million from 294.3 million in July.
However, it is not all doom and gloom for the e-payment industry, as several channels of transaction saw an increase in popularity. When it comes to the value of transactions, the Mobile Interscheme saw an increase of 8 percent in August, reaching N719.4 billion, an increase from N665.2 billion in July. In addition, the number of transactions increased by 4 percent, from 25.6 million in July to 26.6 million in August.
Cheque transactions also saw an increase, rising by 7% to N265.4 billion in August from N248.6 billion in July, a 7 percent increase from the previous month. This month's volume increased by 6 percent to reach 366,002, up from 344,621 the previous month.
In Conclusion
According to the President of AMMBAN, the general public is gradually shifting away from traditional payment methods such as credit cards to alternative payment methods such as Quick Response (QR) codes and even hard cash. This could also be a contributing factor to the decline in point-of-sale transactions.
